Staking: The New Way to Earn Interest
In the world of cryptocurrency, staking is the equivalent of a high-yield savings account, but with higher potential rewards (and risks).
Proof of Stake (PoS)
Blockchains like Ethereum and Solana use Proof of Stake to secure the network. By locking up ("staking") your coins, you help validate transactions. In return, the network pays you rewards in the form of more coins.
Staking vs. Mining
- Requires expensive hardware
- High electricity cost
- Technical setup required
- No hardware needed (if delegating)
- Passive income
- Risk of "Slashing" (very rare)
What is APY?
Annual Percentage Yield (APY) includes the effect of compound interest. If you reinvest your staking rewards (restake), you earn interest on your interest, accelerating your portfolio growth over time.