Digital assets
Staking
Locking up tokens to help validate a network, in exchange for a reward.
How it works
Staking rewards are often quoted as a yield, which invites comparison with interest. The comparison is misleading: rewards are paid in the same token, so the real return depends on that token’s price.
Staked tokens are typically locked for a period and can be forfeited if the validator misbehaves or goes offline.
Where it misleads people
A 6% staking yield on an asset that falls 60% is not income. Quoting it alongside a deposit rate compares two unrelated things.
Related terms
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