What is crypto staking?

Crypto staking is the act of locking up coins so they can be used to help confirm transactions on a blockchain. In return, the network pays a reward, usually in the same coin. Staking exists only on blockchains that use a system called proof of stake.

How does staking work?

A proof-of-stake network has no miners. It relies on validators, which are computers that propose and check new blocks of transactions. To become one, an operator must put up a deposit of the network's coin, known as a stake.

The deposit works like a bond for good behavior. Validators that do the job earn newly created coins and a share of transaction fees. Validators that go offline or try to cheat can lose part of the deposit, a penalty called slashing.

Bitcoin cannot be staked, because it uses mining. Ether, Solana's SOL and Cardano's ada are among the coins that can.

Staking yourself or through an exchange

There are three common routes:

• Running a validator. The holder operates the software and keeps the full reward. This takes technical skill, constant uptime and sometimes a large deposit. Ethereum staking requires 32 ether per validator.
• Delegating or pooling. The holder assigns coins to a validator or pool run by someone else, who takes a commission.
• Staking through an exchange. Platforms including Coinbase and Robinhood offer staking from the account screen, though as of October 2026 Robinhood's support pages say it is not available in every US state. The company does the technical work, keeps a share of the reward and holds the coins, which makes it a custodial arrangement.

What are the risks?

• Price. Rewards are paid in the coin. If its price falls by more than the reward, the holder ends up with less in dollar terms.
• Lockups. Some networks impose a waiting period before staked coins can be withdrawn and sold.
• Slashing. A validator's mistakes can cost part of the stake, and people who delegated to it may share the loss.
• Platform failure. An exchange or staking service can be hacked or go bankrupt.

Reward rates move with the number of people staking. They are not fixed, and staked coins are not bank deposits.

Is staking taxed and regulated?

In the United States, the IRS says staking rewards are ordinary income, valued when the holder gains control of them. It set that out in Revenue Ruling 2023-14. More detail is in how crypto is taxed in the United States.

On securities law, staff at the Securities and Exchange Commission said in May 2025 that certain staking activities are not securities transactions. That is a staff view and not a formal rule. Rules differ by country and state and change over time, so the official source or a qualified professional is the place to check a specific case.