What Is Staking? Meaning & Example
Definition
Staking means locking crypto in a proof-of-stake network to help validate transactions in exchange for rewards. Rewards are not guaranteed and staked coins may be locked for a period.
Related terms
Proof of stake is a consensus method where validators lock up coins as collateral to help secure a blockchain. Misbehaving validators can lose part of their stake.
APY (Annual Percentage Yield)APY is the yearly return on savings including the effect of compounding. It is useful for comparing savings accounts and CDs.
DeFi (Decentralized Finance)DeFi refers to financial services such as lending, borrowing and trading built on blockchains using smart contracts. It aims to work without traditional intermediaries but carries technical and platform risks.
What is Staking?
Staking means locking crypto in a proof-of-stake network to help validate transactions in exchange for rewards. Rewards are not guaranteed and staked coins may be locked for a period.
Can you give an example of Staking?
Staking 100 coins at a 4% reward rate might earn about 4 extra coins over a year, while the coin's price can still fall.