What Is Crypto Staking? Earn Passive Income with Your Holdings

Staking lets you put your crypto to work — earning rewards while you hold. Here's how it works.

The Simple Explanation

Staking is the process of locking up your cryptocurrency to help validate transactions on a proof-of-stake blockchain — and earning rewards in return. It's similar to earning interest in a savings account, except the rewards come from the blockchain network itself rather than a bank.

When you stake, your coins help keep the network secure and operational. In exchange, the protocol distributes newly created coins to stakers as a reward — typically expressed as an annual percentage yield (APY).

How Proof-of-Stake Works

Most modern blockchains — including Ethereum and Solana — use proof-of-stake (PoS) to agree on which transactions are valid. Here's the basic idea:

Participants "stake" (lock up) a certain amount of cryptocurrency as collateral
The network randomly selects validators from those who have staked — higher stakes get more chances
Selected validators confirm batches of transactions and add them to the blockchain
Validators earn staking rewards for honest participation
Validators who act dishonestly can have their stake "slashed" (partially or fully taken)

This is more energy-efficient than Bitcoin's proof-of-work (mining), and it gives ordinary holders a way to participate in network security.

Popular Coins to Stake

Coin	Typical APY	Notes
Ethereum (ETH)	3–5%	Largest proof-of-stake network; very liquid
Solana (SOL)	5–8%	High speed, low fees; popular for staking
Polkadot (DOT)	10–15%	Higher yield; requires minimum stake amounts
Cardano (ADA)	3–5%	No minimum; liquid staking available
Cosmos (ATOM)	8–15%	Active ecosystem; rewards paid in ATOM

APY rates fluctuate with network conditions. Rates shown are approximate 2026 averages.

Two Ways to Stake: Exchange vs Self-Custody

Staking on an Exchange (Easiest)

Exchanges like Kraken handle all the technical complexity for you. You deposit your coins, opt in to staking, and rewards accumulate automatically.

No minimum amounts required
No technical setup
Rewards paid weekly or monthly
Best for beginners

Self-Custody Staking (Advanced)

Run your own validator node or delegate directly from a hardware wallet. More control, no counterparty risk — but requires technical knowledge and sometimes minimum stake amounts (e.g., 32 ETH to solo-stake Ethereum).

Full control of your keys
Can require large minimums
Technical setup required
Best for advanced users

Risks to Understand Before Staking

Lock-up periods: Some networks require you to lock your coins for days or weeks before you can unstake. During this time, you can't sell if the price drops.
Price risk: Staking rewards don't protect against a drop in coin price. Earning 10% APY in SOL is meaningless if SOL falls 50%.
Exchange risk: Staking via an exchange means trusting that exchange with your coins. Use well-established, regulated platforms.
Smart contract risk: DeFi staking protocols can contain bugs or be exploited. Stick to audited, established protocols.

How to Start Staking on Kraken

Create or log into your Kraken account
Deposit or buy ETH, SOL, DOT, ADA, or another supported staking asset
Navigate to Earn in the Kraken dashboard
Select the asset you want to stake and confirm
Rewards begin accruing — usually paid out weekly

For a deeper dive into DeFi staking protocols, check out our DeFi Staking Guide.

Start Earning Staking Rewards on Kraken

Kraken supports staking for ETH, SOL, DOT, ADA, and more — with no minimum amounts and weekly reward payouts. Trusted since 2011.

Open a Kraken Account →