Staking allows you to earn rewards by participating in blockchain network validation. This guide explains how staking works and how to get started.
How Staking Works: When you stake cryptocurrency, you're helping validate transactions on the blockchain. In return, you receive rewards, effectively creating passive income on your holdings.
Proof of Stake vs. Proof of Work: Unlike mining (Proof of Work), staking is energy-efficient and doesn't require expensive hardware. Ethereum switched to staking in 2022.
Staking Rewards: Annual percentage yields (APY) vary by cryptocurrency and protocol. Ethereum currently offers around 3-4% APY, but some newer projects offer higher rates.
Staking Methods:
Solo Staking: Run a full node and stake directly. Requires technical knowledge and 32 ETH minimum for Ethereum.
Staking Pools: Join other investors in staking pools. Lower minimum requirements and shared validator setup.
Exchange Staking: Stake directly through exchanges like CryptoBlik. Most convenient but less secure than self-custody.
Risks to Consider: - Price volatility - Slashing penalties for validator misbehavior - Network risks and upgrades - Liquidity - your funds are locked during staking
Getting Started: - Research the specific cryptocurrency you want to stake - Understand the minimum requirements - Evaluate the APY and risks - Choose a reliable staking provider