Staking explained: earning passively with crypto (and the risks)

Leaving your crypto in place and still earning a return on it — that is the promise of staking. It sounds attractive, and it can be, but there are catches. We explain how staking works, what you can earn and which risks you need to know.

What is staking?

Many crypto networks (such as Ethereum, Solana and Cardano) use a system called proof-of-stake. Instead of energy-guzzling mining, transactions are validated by people who ‘lock up’ their coins as collateral. If you take part, you help secure the network and receive a reward for it. That reward is essentially a kind of interest on your crypto.

How much can you earn?

The return is expressed as APY (annual percentage yield). It varies greatly per coin and per platform — roughly from a few percent to sometimes double digits. Note: a high percentage usually also means higher risk. And the reward is in crypto, so if the price falls, your euro value can still plummet.

The risks

• Price risk: you earn coins, but their value can fall.
• Lock-up: sometimes your crypto is locked for a period and you cannot access it immediately.
• Platform risk: if you stake via an exchange, you rely on that platform. Choose a regulated party for that reason.
• Slashing: with some networks you can lose part of your stake if something goes wrong with validation.

Via an exchange or yourself?

For most people, staking via a reliable exchange is the simplest: a few clicks and you're done. You give up some control for convenience. Advanced users can stake themselves (more control, but more technical). For beginners, the exchange route is almost always the wisest way to start.

How to start safely

Choose a regulated platform that offers staking — see our comparison and current bonuses. New to crypto? First read our beginner's guide so you have the basics down before you start staking.