Crypto staking is the process of locking up your cryptocurrency to help secure a blockchain network and earn rewards in return. It is the proof-of-stake (PoS) equivalent of Bitcoin mining: instead of using computing power (hardware and electricity) to validate transactions, stakers use their token holdings as collateral to participate in network consensus.
When you stake your tokens, you are essentially voting with your money that you trust the network and are willing to help secure it. In return, the network rewards you with newly minted tokens and transaction fees. The annual yield varies by cryptocurrency and network conditions but typically ranges from 3% to 20% APY in 2026.
Staking has grown enormously since Ethereum's transition from proof of work to proof of stake (known as "The Merge") in September 2022. As of 2026, over $200 billion worth of cryptocurrency is actively staked across various networks, and staking has become one of the primary ways crypto holders earn passive income on their holdings.
Staking is NOT risk-free yield. Your staked assets are exposed to price volatility (the token price can fall), slashing risk (penalties for validator misbehavior), and lock-up periods (you may not be able to withdraw immediately). Think of staking rewards as compensation for taking on these risks and for providing a service to the network, not as "free money."
To understand staking, you need to understand the proof-of-stake consensus mechanism. In a proof-of-stake blockchain, validators (the PoS equivalent of miners) are selected to propose and validate new blocks based on the amount of tokens they have staked as collateral.
Compared to proof of work (used by Bitcoin), proof of stake offers several advantages:
| Cryptocurrency | Staking APY | Min. Stake | Lock-Up Period | Risk Level |
|---|---|---|---|---|
| Ethereum (ETH) | 3.5-4.5% | 32 ETH (solo) / Any (pool) | Variable (withdrawals enabled) | Low |
| Solana (SOL) | 6-8% | No minimum (delegated) | ~2-3 day unstaking | Medium |
| Cardano (ADA) | 3-4% | No minimum | None (liquid) | Low |
| Polkadot (DOT) | 10-14% | No minimum (pool) | 28-day unbonding | Medium |
| Cosmos (ATOM) | 14-20% | No minimum | 21-day unbonding | Medium-High |
| Avalanche (AVAX) | 7-9% | 25 AVAX (delegated) | 2-week minimum | Medium |
| Tezos (XTZ) | 5-6% | No minimum (delegated) | None (liquid) | Low |
| Near Protocol (NEAR) | 9-11% | No minimum (delegated) | 36-48 hour unstaking | Medium |
Ethereum is the most valuable proof-of-stake network by market capitalization and the most popular staking choice. Since enabling withdrawals in April 2023, the Ethereum staking landscape has matured significantly. Over 30 million ETH is staked in 2026. Solo staking requires 32 ETH (a significant capital commitment), but liquid staking protocols like Lido (stETH) and Rocket Pool (rETH) allow you to stake any amount. The APY is relatively modest (3.5-4.5%) but this is compensated by ETH's strong price appreciation potential and its status as the most established smart contract platform.
Solana offers attractive staking yields of 6-8% with a low barrier to entry. You can delegate any amount of SOL to a validator through the Phantom wallet or Solflare. Solana's high transaction throughput and growing DeFi ecosystem make it an active network where validators earn meaningful transaction fee revenue in addition to inflation rewards. The risk is that Solana has experienced network outages in the past, though reliability has improved significantly.
Cosmos consistently offers some of the highest staking yields among major cryptocurrencies (14-20% APY). The tradeoff is a 21-day unbonding period during which your tokens cannot be sold, transferred, or restaked. Cosmos's Inter-Blockchain Communication (IBC) protocol has created a thriving ecosystem of interconnected blockchains, and ATOM stakers receive airdrops from new IBC chains launching in the ecosystem.
Running your own validator node gives you the highest rewards (no fees to intermediaries) and maximum control. However, it requires significant technical knowledge, dedicated hardware (for most networks), a large minimum stake (32 ETH for Ethereum), and 24/7 uptime. Downtime or errors can result in slashing penalties. Solo staking is best for technically proficient users with substantial holdings.
Delegated staking allows you to stake any amount by delegating your tokens to a professional validator who handles the technical operations. You earn rewards proportional to your delegation, minus a commission fee (typically 5-15%) charged by the validator. This is the most popular method for individual stakers because it combines decent yields with minimal technical requirements. On Solana, Cardano, and Cosmos, delegated staking is built into the protocol itself.
Major exchanges (Coinbase, Kraken, Binance) offer one-click staking where the exchange handles everything. This is the easiest method but comes with tradeoffs: higher fees (exchanges typically take 15-25% of rewards), custodial risk (the exchange holds your keys), and you may not have full control over which validators receive your delegation.
Liquid staking protocols (covered in detail in the next section) issue you a token representing your staked position. This allows you to earn staking rewards while still being able to use your capital in DeFi protocols. Lido (stETH for Ethereum), Marinade (mSOL for Solana), and Jito (jitoSOL for Solana) are the leading liquid staking providers.
| Method | Technical Skill | Min. Investment | Fees | Custody |
|---|---|---|---|---|
| Solo | High | High (32 ETH for Ethereum) | None | Self-custody |
| Delegated/Pool | Low | Any amount | 5-15% commission | Self-custody |
| Exchange | None | Any amount | 15-25% commission | Exchange-custody |
| Liquid Staking | Low-Medium | Any amount | 5-10% commission | Smart contract |
Liquid staking has become the dominant form of staking in 2026, solving the fundamental tradeoff between earning staking rewards and maintaining liquidity. When you stake through a liquid staking protocol, you deposit your tokens and receive a "liquid staking token" (LST) that represents your staked position plus accumulated rewards.
Staking yields are not fixed interest rates. They fluctuate based on multiple factors, and understanding these dynamics helps you make informed staking decisions.
The advertised staking APY is the nominal yield. The real yield accounts for token inflation. If a network offers 15% staking APY but has 12% annual inflation, your real yield is approximately 3%. This is why comparing staking yields across different cryptocurrencies requires looking at both the nominal APY and the inflation rate. Ethereum, with its low inflation (and sometimes deflation due to EIP-1559 fee burning), offers one of the best real yields despite its modest nominal APY.
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Claim Free SPUNK NowStaking is often marketed as "passive income" but it carries real risks that you must understand before committing your capital.
The biggest risk in staking is that the price of the staked token can fall faster than your staking rewards accumulate. A 5% annual staking yield does not help if the token price drops 50%. Staking does not protect against bear markets. Only stake tokens you are willing to hold long-term regardless of short-term price movements.
If your validator (or the validator you delegate to) behaves maliciously or has technical failures, a portion of the staked tokens can be "slashed" (confiscated by the protocol). On Ethereum, slashing can range from small penalties for brief downtime to the full 32 ETH for serious offenses like double-signing. Choose validators with strong track records and uptime history to minimize this risk.
Many PoS networks require an unbonding period when you want to unstake your tokens. Cosmos has a 21-day unbonding period, Polkadot has 28 days, and Ethereum's withdrawal queue can vary. During this period, your tokens are not earning rewards and cannot be sold. In a rapidly falling market, being unable to sell for weeks can result in significant losses.
Liquid staking protocols are smart contracts that could have bugs or vulnerabilities. If a liquid staking contract is exploited, you could lose your deposited tokens. Stick with audited, battle-tested protocols (Lido, Rocket Pool, Jito) and diversify across multiple protocols rather than concentrating everything in one.
The regulatory status of staking rewards remains unclear in many jurisdictions. Some regulators have argued that staking-as-a-service offerings may constitute securities. This has led some exchanges (like Kraken in the US) to cease staking services in certain jurisdictions. Changes in regulation could affect your ability to stake or the tax treatment of your rewards.
Here are step-by-step guides for the most popular staking methods:
Install MetaMask, Rabby, or another Ethereum-compatible browser extension wallet. Make sure you have ETH in your wallet for the staking deposit and gas fees.
Go to stake.lido.fi (verify the URL carefully to avoid phishing sites). Connect your wallet by clicking "Connect Wallet."
Enter the amount of ETH you want to stake. Review the transaction details and current APR. Click "Submit" and confirm the transaction in your wallet. You will pay a gas fee for the transaction.
You will receive stETH tokens in your wallet equal to the amount of ETH you staked. These tokens automatically earn staking rewards (the stETH balance increases over time). You can use stETH in DeFi or hold it in your wallet.
If you do not have Phantom, install it from phantom.app. Create or import a wallet and deposit SOL.
In the Phantom app, tap your SOL balance, then tap "Start earning SOL." You will see a list of validators to delegate to.
Select a validator with high uptime (99%+), a reasonable commission (5-10%), and no history of slashing. Phantom shows validator performance metrics to help you decide.
Enter the amount of SOL to stake, confirm the transaction, and you are done. Rewards start accruing after the next epoch (approximately 2-3 days). Keep a small amount of SOL unstaked for transaction fees.
Strictly speaking, no. Bitcoin uses proof of work, not proof of stake, so it does not have native staking. Bitcoin's security model relies on miners expending computational energy, not on token holders locking up their coins. This is a fundamental design choice by Satoshi Nakamoto and is unlikely to change.
However, there are ways to earn yield on your Bitcoin holdings:
Be extremely cautious of any platform claiming to offer "Bitcoin staking" with high APY. Since Bitcoin does not have native staking, these are typically lending schemes (where your BTC is lent to risky borrowers), Ponzi schemes (paying old investors with new deposits), or outright scams. Several high-profile "Bitcoin yield" platforms (Celsius, BlockFi, Voyager) collapsed in 2022, losing billions in customer funds.
| Method | Typical APY | Risk Level | Lock-Up | Complexity |
|---|---|---|---|---|
| PoS Staking | 3-20% | Medium | Variable | Low-Medium |
| DeFi Lending | 2-10% | Medium-High | None (usually) | Medium |
| Liquidity Provision | 5-50%+ | High | None | High |
| Bitcoin Mining | Varies | High | Hardware investment | High |
| Free Faucets/Gaming | N/A (free tokens) | None | None | None |
Each passive income method has its own risk-reward profile. Staking offers a good middle ground: lower risk than liquidity provision or lending (which carry smart contract and impermanent loss risks), higher yields than simply holding, and lower complexity than running a mining operation. For Bitcoin holders who cannot stake their BTC, earning free tokens through platforms like SPUNK.BET provides a risk-free supplementary income stream.
Staking through reputable validators on established networks (Ethereum, Solana, Cardano) is relatively safe, but it is not risk-free. The main risks are price volatility (the token's value can fall), slashing (penalties for validator errors), smart contract bugs (for liquid staking), and regulatory changes. Diversify your staking across multiple validators and protocols, and only stake tokens you are comfortable holding long-term.
Yields vary by network. Ethereum staking earns approximately 3.5-4.5% APY in 2026. Solana offers 6-8%. Cosmos and Polkadot offer 10-20%. These are nominal rates before accounting for inflation, taxes, and potential price changes. On a $10,000 SOL stake at 7% APY, you would earn approximately $700 worth of SOL per year (at current prices, subject to price changes).
Yes. If the token's price drops more than your staking yield, you will have a net loss in fiat terms. You can also lose tokens through slashing penalties (if your validator misbehaves) or smart contract exploits (if using liquid staking). You will not lose tokens from normal staking operations on a reputable validator, but the fiat value of your holdings is never guaranteed.
In most jurisdictions (including the US), staking rewards are taxable as ordinary income at the fair market value on the date you receive them. When you later sell the staked tokens, any price change from the date of receipt is treated as a capital gain or loss. Keep detailed records and consider using crypto tax software. Consult a tax professional for advice specific to your jurisdiction.
For delegated staking on most networks (Solana, Cardano, Cosmos), there is no minimum — you can stake any amount. Ethereum solo staking requires 32 ETH, but liquid staking protocols (Lido, Rocket Pool) allow staking any amount. Exchange staking (Coinbase, Kraken) also has no minimum for most coins. You can start staking with as little as a few dollars.
Bitcoin does not support native staking because it uses proof of work. However, you can earn free Bitcoin-based tokens through platforms like SPUNK.BET, which distributes 10,000 SPUNK*BET Runes tokens daily. You can also earn BTC through Lightning Network routing, wrapped Bitcoin DeFi, or Bitcoin rewards credit cards. Be cautious of any platform promising high "Bitcoin staking" yields — these are typically lending schemes with significant risk.