Staking is how proof-of-stake networks such as Ethereum, Solana, Cardano and the Cosmos Hub decide who adds the next block: holders put coins up as a security deposit and are paid for honest work. The rewards are real, but they come largely as newly created coins, they float with network conditions, and exits can take weeks. Staked coins are as volatile as any others and can lose most or all of their value. The crypto hub covers the other ways to hold crypto.
What is crypto staking?
Crypto staking is committing coins to a proof-of-stake network's validators, which use them as collateral while proposing and checking blocks, in exchange for rewards. The right to add blocks is handed out in proportion to coins at stake rather than computing power, so the stake is what a cheater stands to lose. How blockchain works covers consensus in general, and what is Ethereum covers the network behind most of the examples here.
Staked ether totaled about 44.3 million ETH, or 36% of all ether, across 815,282 active validators (validatorqueue.com, as of Nov 2, 2026). Bitcoin runs on mining, so there is nothing to stake on its own network; products that pay a yield on bitcoin generally lend or pledge the coins elsewhere, a different risk covered in crypto lending risks.
Where do staking rewards come from?
From two sources: new coins the protocol creates for validators, and a share of the fees people pay to get their transactions included. SEC staff described rewards in exactly those terms in May 2025.
On Ethereum, new ether is paid every 6.4-minute epoch from a base reward that grows with a validator's effective balance and shrinks with the square root of all ether staked, so more total stake means a lower rate for each staker. The reward is split among five duties weighted out of 64: 26 for a target vote, 14 each for source and head votes, 8 for proposing a block and 2 for sync committee work. Proposers also keep priority fees and MEV, the extra value from how transactions are ordered, which were small in late 2026: Etherscan showed gas at 0.032 gwei on November 2. That day, validatorqueue.com put the network-wide reward rate at 2.45% a year and ethereum.org showed 2.5%, both before any provider's cut.
Other networks turn different dials: the Cosmos Hub mints new ATOM at 7% to 10% a year depending on how much of the supply is bonded, and Solana's declining issuance schedule is covered in what is Solana. Either way, a reward rate measures how fast a coin count grows, not how fast wealth grows.
How much does staking really earn after inflation?
Less than the headline rate: at November 2026 levels, a 2.45% reward grows a staker's share of all ether by only about 1.6% a year. New coins paid to stakers also enlarge the total supply, so what counts is how much faster a holding grows than the network. Ethereum burns part of every fee, so use net supply growth: Etherscan's daily series shows 121,185,991 ETH on November 1, 2025 and 122,187,707 ETH a year later, up 0.83%.
Worked example: One year of staking 32 ETH, netted for supply growth
Inputs: a 2.45% reward rate (validatorqueue.com, November 2, 2026) and 0.83% supply growth (Etherscan, year to November 1, 2026), with ether's price held flat.
- Own validator, no cut: 32 × 2.45% = 0.784 ETH. Network share: 1.0245 ÷ 1.0083 − 1 ≈ +1.61%.
- Liquid staking pool keeping 10%: 0.784 × 0.90 = 0.706 ETH. Network share ≈ +1.36%.
- Exchange keeping an assumed 25%: 0.784 × 0.75 = 0.588 ETH. Network share ≈ +1.00%.
- Not staking: still 32 ETH, but 1 ÷ 1.0083 − 1 ≈ −0.82% of the network.
- Pool staker after an assumed 22% income tax, paid by selling ether: 0.550 ETH kept, about +0.88% in network share.
Staking instead of sitting out is worth about 1.8 to 2.4 points of network share a year here. A 10% fall in ether's price would erase that several times over: the solo staker's 32.784 ETH would then be worth what 29.51 ETH was at the start, a 7.8% loss in dollars.
The faster a network mints coins, the higher the rate it must pay just to keep stakers level; the Cosmos Hub's inflation sat at its 10% ceiling in October 2026.
What are the main ways to stake crypto?
Four main routes exist: run a validator, delegate while keeping your coins, use a liquid staking pool, or let an exchange stake for you. Each step down the table asks less of you and puts more parties between you and the network.
| Route | Who controls the coins | Minimum | Provider's cut | How you get out | Extra risk |
|---|---|---|---|---|---|
| Your own validator | You hold the keys | 32 ETH on Ethereum | None, but you pay for hardware and uptime | The network's exit process | Penalties for your own downtime or errors |
| Delegating to a validator | You keep the coins; the validator gets their voting weight | None on Cardano; varies by network | The validator's commission, at least 5% on the Cosmos Hub | Network unbonding: none on Cardano, 21 days on the Cosmos Hub | The validator's slashing reaches you on networks that slash |
| Liquid staking pool | A smart contract and its node operators; you hold a receipt token | As little as 0.01 ETH at some pools | 10% of rewards at the largest Ethereum protocol | Redeem through the pool's queue or sell the token | Contract bugs; the token can trade below its coins |
| Exchange or custodian | The platform | Usually any amount | Set by the platform | Platform terms, on top of network queues | Platform failure, frozen withdrawals, changing terms |
A validator of your own needs a machine running day and night, and since the Pectra upgrade in May 2025 one Ethereum validator can hold up to 2,048 ETH. Delegation is native on networks such as Cardano, where ada stays spendable and first rewards arrive after roughly 15 to 20 days.
Liquid staking hands back what SEC staff call a staking receipt token, which either adds units as rewards arrive or keeps a fixed count and rises in value against the coin. Lido, the largest such protocol, had about 9.70 million ETH staked on November 2, 2026, roughly 22% of all staked ether. Receipt tokens can serve as collateral in the apps described in what is DeFi, and each extra layer adds failure points.
Exchange staking is the simplest route and the least in your control. SEC staff's description of custodial staking assumes the coins are not lent, pledged or rehypothecated and are shielded from claims by third parties, so look for those promises in the terms. Whether crypto is safe on an exchange covers what happens in a failure, and custodial vs non-custodial wallets covers the trade-off. Funds that stake are a fifth route, compared in Ethereum ETFs explained.
How long does it take to unstake crypto?
It depends on the network: Ethereum queues exits, then adds about 27 hours and a withdrawal sweep; the Cosmos Hub takes 21 days; Cardano has no lockup. Solana releases stake at epoch boundaries, and no more than 9% of all effective stake can cool down in one epoch.
Joining Ethereum is queued too: on November 2, 2026, 1,124,818 ETH was waiting about 20 days to start earning. Leaving takes three stages:
- Exit queue. At most 256 ETH can leave per 6.4-minute epoch, or 57,600 ETH a day. A validator keeps working and earning until its turn.
- Withdrawability delay. A fixed 256 epochs, about 27.3 hours, with no rewards.
- Withdrawal sweep. Proposers pay out up to 16 withdrawals per block, cycling through every validator; validatorqueue.com estimated the sweep at 7.1 days on November 2, 2026.
That day the exit queue held just 709 ETH. After a large infrastructure provider pulled all its validators as a precaution on September 9, 2025, about 2.5 million ETH lined up to leave, and CoinDesk reported a record wait of more than 46 days.
Worked example: Exiting 32 ETH behind a 2.5 million ETH queue
- Queue: 2,500,000 ÷ 57,600 per day ≈ 43.4 days, earning about 32 × 0.0245 × 43.4 ÷ 365 ≈ 0.093 ETH if the validator stays online.
- Withdrawability delay: 256 epochs × 6.4 minutes ≈ 27.3 hours, or 1.1 days.
- Sweep: between 0 and about 7.1 days at the November 2026 estimate.
- Total: about 44.5 to 51.6 days from exit request to ether in the withdrawal address, with no way to sell the staked coins in between.
A liquid staking holder could sell the receipt token on day one instead, at whatever price the market offered.
What is slashing, and how much can you lose?
Slashing destroys part of a validator's stake for provable cheating, such as signing two conflicting blocks; on Ethereum an isolated case costs well under 1%. Being offline is not slashing: it costs roughly what the validator would have earned, unless the chain stops finalizing for more than four epochs and an inactivity leak sets in.
A slashed Ethereum validator loses 1/4,096 of its effective balance at once, is forced out and stays locked for 8,192 epochs, about 36 days, paying for missed votes throughout. At the midpoint comes a correlation penalty: its balance times three times the share of all staked ether slashed in the 36-day window around it, capped at the full balance. The design punishes coordinated attacks and shared failures far more than one-off mistakes.
Worked example: What slashing costs a 32 ETH validator
With 44.3 million ETH staked, a 32 ETH validator's full reward is about 0.0000097 ETH per epoch.
- Immediate penalty: 32 ÷ 4,096 = 0.0078 ETH.
- Missed source and target votes for 8,192 epochs, at 40/64 of that reward: about 0.050 ETH.
- Correlation penalty if slashed alone: 32 × 3 × 32 ÷ 44.3 million ≈ 0.00007 ETH, for a total of about 0.058 ETH, or 0.18% of the stake.
- If 1% of all stake, 443,000 ETH, were slashed in the same window: 0.96 ETH more, about 1.02 ETH in all, or 3.2%.
- If a third or more of all stake were slashed together: the whole 32 ETH.
Slashing is rare. On September 10, 2025, 39 validators were slashed together after a staking provider's maintenance error left the same keys running in two places, one of the largest correlated cases since Ethereum moved to proof of stake; CoinDesk counted fewer than 500 validators slashed since 2020. Other networks differ: the Cosmos Hub burns 5% of a validator's stake, delegators' coins included, for double-signing and 0.01% for long downtime, Cardano does not slash, and Solana logs violations on chain without changing stakes. In a liquid staking pool, SEC staff note, slashing losses come out of the deposited coins, so receipt-token holders bear them.
What did the SEC say about staking in 2025 and 2026?
SEC staff said in May and August 2025 that protocol staking and liquid staking are not securities offerings, and the Commission adopted that view in March 2026. In February 2023, by contrast, one large US exchange paid $30 million to settle SEC charges that its staking program, which advertised returns of up to 21%, was an unregistered securities offering, and it shut the program for US customers.
The May 29, 2025 staff statement covered staking your own coins, delegating to a node operator while keeping your keys, and custodial staking. Its conditions matter: a custodian may not choose whether, when or how much to stake, and no provider may guarantee or fix the reward beyond deducting a fee. An August 5, 2025 statement extended the view to liquid staking receipt tokens issued one for one. On March 17, 2026, the Commission, joined by the CFTC, adopted an interpretation, effective March 23, that all four forms, as described, do not involve offers or sales of securities. It does not address restaking.
Staff statements have no legal force, and interpretations can be revised. The CLARITY Act, a market-structure bill, passed the House 294 to 134 on July 17, 2025, but a Senate cloture vote to take it up failed 49 to 50 on September 15, 2026; it had not become law as of November 2, 2026. None of this makes staking safer or changes how rewards are taxed; US crypto regulation tracks the wider rules.
What are the risks of crypto staking?
The biggest is price: staked coins are as volatile as any others and can lose most or all of their value, with lockups, penalties and platform risk on top.
- Price. A year of rewards is a few percent; the ether price page shows larger moves, and crypto market cycles covers past drawdowns.
- Liquidity. Queues can stretch for weeks, and staked coins cannot be sold while they wait.
- Platform failure. With custodial staking, the platform's solvency and terms decide what comes back.
- Receipt-token discounts. In June 2022, before Ethereum allowed withdrawals, the leading staked-ether token traded at a discount that CoinDesk, citing Dune data, put at a record 8%, as large holders sold to meet withdrawals and margin calls.
- Code and concentration. Pools, receipt tokens and restaking each add code that can fail, and ethereum.org warns that large custodial pools create a single point of failure.
- Taxes and rules. Rewards are taxed as income when received, even if the price later falls, as how staking rewards are taxed explains, and regulatory positions can change.
Questions to answer before staking
- Who holds the keys, and can the provider use the coins for anything else?
- What cut of rewards does the provider keep, and can it change?
- How long does getting out take, including any delay the provider adds?
- Does the network slash, and who absorbs a slashing loss?
- If you receive a receipt token, how deep is its market, and what did it trade at in past sell-offs?
- Can you pay the tax on rewards as they arrive?
Staking changes how a coin is held, not how much of a portfolio belongs in crypto; that question has its own guide, how much crypto to hold.