What is staking in crypto?

What Is Staking in Crypto?

Staking means locking your crypto in a protocol or with a validator to help secure the network. In proof-of-stake chains, validators are chosen (often by stake size) to propose and validate blocks. In return, they earn rewards, which are shared with stakers. You can stake directly or through an exchange or pool.

How to Stake

If you hold a stakable coin (e.g. ETH, SOL), you can lock it in the official protocol or with a validator. Some exchanges offer "staking" where they stake on your behalf and pass you a share of rewards. Lock-up periods and minimum amounts vary. Unstaking can take time.

Risks and Tax

Staked assets can be slashed (partially lost) if the validator misbehaves. Exchange staking means you trust the exchange. In India, staking rewards are generally taxable. Understand lock-ups and penalties before staking large amounts.