Staking is locking up cryptocurrency to support a proof-of-stake blockchain's security in exchange for rewards — analogous to earning interest on a savings account. Major staking cryptos: Ethereum (ETH — 32 ETH minimum to run a validator, or fractional via staking services), Solana, Cardano, Polkadot. Annual percentage yields: typically 3-7% for major stakable cryptos. Risks: slashing (lose stake for misbehavior), illiquidity during unbond periods, smart contract risk for liquid staking (Lido stETH), token price volatility eating into yields. Liquid staking tokens (stETH) maintain liquidity while staking. The IRS taxes staking rewards as ordinary income when received.
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August 22, 2026 · Aditya Gupta
Investing
Related terms
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An airdrop is a distribution of free cryptocurrency tokens to users meeting specific criteria — often early protocol…
Bitcoin
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