What is crypto staking?

The primary benefit of staking is that you earn more crypto, and interest rates can be very generous. In some cases, you can earn more than 10% or 20% per year. It’s potentially a very profitable way to invest your money . And, the only thing you need is crypto that uses the proof-of-stake model.7 Mar 2022

Even those who don’t have enough to become a validator themselves can pledge their coins with a validator and earn rewards . So those with just a few coins can earn staking rewards if they work with a crypto exchange or another crypto platform to do so. Rewards can be deposited into your account as they are earned.

That’s what staking is—investors who actively hold onto, or lock up their crypto holdings in their crypto wallet are participating in these networks’ consensus-taking processes . Stakers are, in essence, approving and verifying transactions on the blockchain. For doing so, the networks reward those investors.

1. Falling cryptocurrency prices. One of the biggest risks with cryptocurrency staking is the volatility and that prices could plunge . For example, if you’re earning 20% in rewards for staking an asset but it drops 50% in value throughout the year, you will still make a loss.