Key Takeaways
- Concept: Staking is like a savings account for crypto. You lock up coins to secure the network and earn rewards.
- Yields: Typically 3-7% for major assets like Ethereum (ETH) or Solana (SOL).
- Risks: Slashing (penalties), Lock-up periods, and Platform risk.
Introduction
If you own Ethereum and it is just sitting in your wallet, you are missing out.
In the traditional world, bonds pay yield. In the crypto world, Staking pays yield.
Deep Dive: Dividends for the Digital Age
Proof of Stake (PoS)
Bitcoin uses "Proof of Work" (Energy). Ethereum uses "Proof of Stake" (Capital).
By locking your ETH, you become a "Validator." You check transactions. If you do it right, the network prints new ETH and gives it to you.
How to Stake
- The Easy Way (CEX): Coinbase, Kraken, Binance. You click "Stake." They take a 10-25% cut of your rewards. Easy, but you don't control the keys.
- The Liquid Way (LSD): Lido or Rocket Pool. You give them ETH, they give you "stETH" (a token representing your staked ETH). You earn rewards, but you can still trade/sell the stETH.
- The Hard Way (Solo): Run your own node. Requires 32 ETH (~$80k) and technical skills.
The Risks
- Lock-ups: When you stake, you often can't sell for days or weeks. If the market crashes, you are stuck watching.
- Smart Contract Risk: If Lido gets hacked, your ETH is gone.
Summary
Staking is the "risk-free rate" of crypto (which is still risky). If you are long-term on ETH, you should be staking.
