What is cryptocurrency staking and how does it work?

Key takeaways

Staking is when you lock up a cryptocurrency to support the security and functionality of a blockchain, earning rewards in return.

Popular among cryptocurrency holders, staking allows investors to support their favorite blockchains while increasing their assets over time.

Staking is only available on certain blockchains that use the Proof of Stake consensus mechanism. Examples include Ethereum, Solana, Cardano, Avalanche, Polkadot, Cosmos, and many others.

Although staking can increase your cryptocurrency assets, it is important to consider potential risks, including loss of funds due to volatility, slashing, or technical failures