If you’re new to cryptocurrency, you may have heard the word staking. But what is it, and how does it work?
In this beginner’s guide, we’ll explain what staking is, how it works, and why people do it — all in simple language. We’ll also show you how to get started with staking safely.
Contents
What Is Staking?
Staking is a way to earn rewards with your crypto by holding certain coins in your wallet.
Instead of trading or selling your crypto, you lock it up — or “stake” it — to help support a blockchain network. In return, you earn more crypto as a reward.
You can think of staking like earning interest at a bank, but with cryptocurrencies.
How Does Staking Work?
Staking only works with certain types of cryptocurrencies — the ones that use a system called Proof of Stake (PoS).
Here’s a step-by-step look at how it works:
Step 1: You Buy a Staking Coin
First, you need to buy a cryptocurrency that supports staking. Some popular staking coins are:
Ethereum (ETH)
Cardano (ADA)
Solana (SOL)
Polkadot (DOT)
Tezos (XTZ)
Step 2: You Choose a Wallet or Platform
Next, you need a wallet or app that supports staking. Some wallets let you stake directly, while others require you to use an exchange.
Popular places to stake include:
Wallets like Trust Wallet, MetaMask, or Exodus
Hardware wallets like Ledger (for advanced users)
Step 3: You Stake Your Coins
Once you have your coins and a wallet or platform, you can choose how much to stake.
When you stake, your coins are locked — meaning you can’t use or sell them right away. They stay in your wallet, helping the network.
Step 4: You Earn Rewards
While your coins are staked, you earn rewards. These rewards are paid in the same cryptocurrency.
For example:
If you stake ETH, you earn more ETH.
If you stake SOL, you earn SOL.
The rewards are usually paid daily, weekly, or monthly.
Why Do People Stake?
People stake crypto for several reasons:
✅ Earn passive income – You make money just by holding coins.
✅ Support the network – Staking helps keep the blockchain secure.
✅ Hold long-term – Many people hold crypto anyway, so staking gives extra benefits.
Is Staking Safe?
Staking is generally safe, but there are some things to know:
🔒 Your coins are locked for a period of time (called an unstaking period)
📉 If the price of the coin drops, the value of your reward may also drop
💻 You must choose a trusted platform — some may have fees or security risks
Tip: Always read the rules and use a trusted wallet or exchange before staking.
How Much Can You Earn from Staking?
The amount you earn depends on:
The coin you stake
The amount you stake
The platform you use
Here are some examples (2025 estimates):
Ethereum (ETH): 3–5% per year
Cardano (ADA): 4–6% per year
Solana (SOL): 6–8% per year
Note: Rates change over time and may vary.
Popular Coins to Stake in 2025
Here are some beginner-friendly coins for staking:
| Coin | Est. Annual Reward | Notes |
|---|---|---|
| ETH | 3–5% | Big network, widely used |
| ADA | 4–6% | Long-term project |
| SOL | 6–8% | Fast and popular |
| DOT | 10–12% | High rewards, active devs |
| XTZ | 5–7% | Easy to stake |
Final Thoughts
Now you know the answer to what is staking, what is it used for, and how does staking work. It’s a great way for beginners to earn passive income and get more involved in the world of crypto.
To start:
Buy a staking coin like ETH or SOL
Choose a safe wallet or exchange
Stake your coins and enjoy the rewards
As always, do your own research and only invest what you can afford to lock up.
Happy staking!
