Staking is how many modern blockchains - those using a system called proof-of-stake - verify transactions and add new blocks. Instead of miners competing with computing power (as in proof-of-work), proof-of-stake networks select validators based on how many tokens they have locked up, or "staked," as collateral.

In practice, staking means committing some of your tokens to help secure the network. You can typically do this by running your own validator node (which usually requires a minimum amount of the network's token and some technical setup), or by delegating your tokens to an existing validator run by someone else, often through an exchange or a staking service. In exchange for helping validate transactions and keep the network honest, stakers earn rewards, usually paid in the same token they staked.

The core difference from mining is what backs the security of the network. Proof-of-work relies on the cost of electricity and hardware to make cheating expensive. Proof-of-stake relies on the value of the staked tokens themselves - a validator that misbehaves risks losing part or all of its stake, a penalty known as "slashing."

Staking is not risk-free. Slashing can reduce your balance if a validator you're staked with goes offline or acts maliciously. Many networks also impose a lock-up or "unbonding" period, meaning your tokens may be inaccessible for days or weeks if you want to withdraw. And if you delegate through an exchange or third-party service rather than staking directly, you take on counterparty risk - you're trusting that service to handle your funds honestly and securely.

Advertised staking yields vary a lot from network to network and change over time depending on factors like total tokens staked, network inflation, and demand. A high headline yield does not automatically mean a good return once you account for token price movements, fees and lock-up risk.

This article is educational and not financial advice. Staking rewards and risks vary by network and provider, and you should do your own research - or speak with a qualified professional - before staking any amount you are not prepared to see fluctuate or become temporarily inaccessible.