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What Is Crypto Staking? How Locking Coins Earns Rewards and Risks
Staking is committing coins to a proof-of-stake network, usually by locking them in a validator or delegating them to one, so they help secure the chain and earn protocol rewards while exposed to penalties.
Key takeaways
- Staked coins back a validator's honesty and earn rewards for doing the job.
- You can run a validator yourself, delegate or use a staking service.
- Rewards are variable and not guaranteed, and coins may be locked or take time to withdraw.
- Slashing, software faults and the staking provider are all sources of risk.
What it is
In a proof-of-stake network, staking is how the system is secured and how participants earn. By locking coins as stake, a validator signals commitment and is eligible to be chosen to propose and vote on blocks. ethereum.org's staking overview describes it as depositing ETH to activate validator software, which stores data, processes transactions and adds blocks, in return for rewards.
Ways to stake
Running your own validator on Ethereum needs 32 ETH and technical upkeep. If you hold less, or do not want to run software, you can use a staking pool or service that combines funds, or delegate where a chain supports it. Each route trades control and effort against fees and trust: pooled options add a provider's risk and charge a share of rewards.
Where rewards come from
Rewards are paid by the protocol, in new coins and fees, to validators who participate correctly. The rate changes with how much is staked in total and with network activity, so it is variable. Projected percentages are estimates, not promises.
Risks
Staked coins can be locked for a period or require an exit queue before they can be withdrawn. Validators who go offline lose a little, and those who misbehave can be slashed, with part of the stake destroyed. Software bugs, operator mistakes and the failure of a staking provider are additional risks. The coin price can fall while your coins are locked, and you may not be able to sell during that time. Only stake what you can leave untouched, and understand who holds your coins during the process.
Example
You stake 32 ETH by running a validator. The protocol pays small rewards for proposing and attesting. If your validator is offline, you lose a small amount, and if it signs conflicting blocks you could be slashed.
Put it into practice
Treat advertised yields as estimates
Rewards change with the network. Scrypt Wallet's Earn section lists opportunities with their sources; read the terms and the risks before you commit funds.
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Last reviewed 2026-10-02 by the Scrypt Wallet team. The factual claims on this page, and where each comes from:
- Staking ETH activates validator software that stores data, processes transactions and adds blocks, in return for rewards. [1]
- Slashing can destroy some or all of a validator's staked ETH. [2]
- Running a validator on Ethereum requires 32 ETH. [2]
Sources
- Stake ETH · ethereum.org · secondary source
- Proof-of-stake · ethereum.org · secondary source
Primary sources are protocol papers, specifications, source code or a project's own documentation; secondary sources are wikis and explainers. We checked each claim against the source text on the review date. Found an error? Tell us and we will correct it.
Frequently asked questions
Is staking the same as mining?
No. Mining spends computing power on proof of work. Staking locks coins as collateral in proof of stake.
Are staking rewards guaranteed?
No. They vary with network conditions and are not guaranteed, and the coin price can fall.
Can I lose my staked coins?
Yes, through slashing, provider failure or software problems, depending on how you stake.
Written by the Scrypt Wallet team · Updated 2026-10-02. General education, not financial, tax or legal advice.