What is Crypto Staking? Earn Passive Income from Crypto Staking

Crypto staking is a way for cryptocurrency holders to earn rewards by locking up their tokens to support a blockchain network. In proof-of-stake (PoS) systems, validators lock their coins as collateral to verify transactions. According to Britannica, “crypto staking is the practice of locking your digital tokens to a blockchain network in order to earn rewards – usually a percentage of the tokens staked” britannica.com. In other words, instead of selling your crypto, you stake it to help secure the network and receive extra coins in return. As Kraken’s Learn team explains, “crypto staking allows holders of specific cryptocurrencies to earn rewards for helping to validate blocks of transaction data” kraken.com.

Staking can be thought of like earning interest on a bank deposit. When you stake coins such as Ethereum, Cardano, or Polkadot, you earn periodic rewards (often paid in the same cryptocurrency) for keeping your tokens locked. For example, CoinLedger reports real reward rates of around 4–7% for major coins: Binance Coin (BNB) ≈7.43%, Cosmos (ATOM) ≈6.95%, Polkadot (DOT) ≈6.11%, Crypto.com Coin (CRO) ≈5.24%, Algorand (ALGO) ≈4.50%, and Ethereum (ETH) ≈4.11% coinledger.io. These rewards are generated from newly minted coins and transaction fees. The key is that staking turns idle crypto into passive income while also helping to secure the blockchain.

Staking is like leasing your crypto to the network: you still own it, but it works for you. Rather than mining with power-hungry hardware, staking only requires you to own PoS coins and lock them up money.com. This means anyone can participate. As Money.com notes, “you lock your crypto to support the network, and in return, you get compensated for helping it run smoothly”. You earn rewards as passive income without actively trading, similar to earning interest on savings. The longer and larger your stake, the more rewards you can earn money.com.

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Crypto Staking vs Mining

Mining (Proof-of-Work) vs Staking (Proof-of-Stake): In traditional Proof-of-Work (PoW) blockchains like Bitcoin, network security comes from computing power. Miners solve complex puzzles using energy-intensive hardware. By contrast, PoS networks (used by Ethereum 2.0, Cardano, Solana, etc.) secure the chain through staked tokens. Validators post (lock) coins as collateral and are randomly chosen to validate blocks. This approach requires far less energy. Grayscale research notes that Ethereum’s switch from PoW to PoS (in 2022) cut its energy use by over 99% dacfp.com. In short, staking uses locked crypto tokens rather than electricity to secure the network dacfp.com.

Accessibility & Effort: Mining demands specialized rigs and technical know-how. Staking, on the other hand, only requires that you hold a supported cryptocurrency in a compatible wallet or platform. As Money.com explains, “staking only requires that you hold a compatible cryptocurrency and choose how to participate,” whereas trading or mining need much more active effort money.com. In this way, staking has democratized blockchain participation, opening it up to anyone – from beginners to institutions.

Rewards and Risk: Staking rewards tend to be modest (often single-digit APYs) compared to volatile trading profits. However, they are relatively predictable and steady (until network or token inflation changes). Importantly, staking is not risk-free: your tokens are locked up. If you need liquidity, you may face a waiting period or penalty. Validators can also be penalized (“slashed”) for faults, which would reduce your stake. Thus, while staking yields are generally attractive, risks like price swings or slashing should be understood dacfp.com.

How to Generate Passive Income from Staking?

To earn passive income with staking, follow these steps:

Choose a PoS coin. Not all cryptos support staking. Pick a Proof-of-Stake coin (e.g. Ethereum, Cardano, Solana, Polkadot, Cosmos, Algorand). Larger coins often offer lower APYs (due to scale), while smaller projects may promise higher rewards (sometimes at higher risk). The CoinLedger analysis above highlights some of the best staking coins by real yield coinledger.io.
Get the cryptocurrency. Buy the token on a crypto exchange or wallet. For example, you could buy 5 ETH on an exchange. Money.com notes that with ~5 ETH staked on Coinbase, you’d earn roughly 0.2 ETH (∼4%) per year in rewards money.com.
Select a staking platform or method. You have options:
- Exchange staking (Custodial): Many crypto exchanges offer one-click staking (e.g. Coinbase, Binance, Kraken). These handle all the technical work for you. They typically charge a small fee but make staking easy.
- Wallet staking (Non-custodial): You can stake directly from your own crypto wallet or a staking service (e.g. Lido, Rocket Pool for ETH). This gives you more control and sometimes higher yields, but requires slightly more setup.
- Delegated staking: Some networks (like Cosmos, Polkadot, Tezos) let you delegate your tokens to a validator. You keep your tokens in your wallet but the validator does the work. Rewards are split between you and the validator.
- Liquid staking: You stake and receive a liquid token (like stETH or wstETH) that you can trade or use in DeFi, providing both staking rewards and liquidity.
Stake your tokens. Follow the platform’s process (often a few clicks or signing a transaction). Once staked, your tokens are locked for a defined period (varies by network). You then start earning rewards, which may compound if you restake them. Kraken’s staking guide notes you often earn rewards in the same token you staked kraken.com.
Monitor and withdraw rewards. Check your rewards periodically. Many services credit them automatically. When you choose to unstake, be aware some networks have delays (e.g. Ethereum’s withdrawal queue). After unstaking, your original tokens return to your wallet.

A simple way to see the income is through staking calculators. For example, if the ETH network yield is ~4% (CoinLedger real rate 4.11%), staking 10 ETH (worth ~$35k) might earn you ~$1,400/year in ETH. Keep in mind that actual returns fluctuate with network conditions and inflation dacfp.com. Rewards are variable, not fixed like bank interest dacfp.com.

cryptocurrencies and their approximate staking yields

Top Crypto Staking Platforms

Choosing a platform is key. Trustworthy exchanges and services provide easy staking options. Some of the leading platforms in 2025 include Coinbase, Binance, Kraken, and Crypto.com koinly.io. These platforms allow you to stake many coins with competitive APYs. For example, Coinbase (custodial) supports 8 coins at up to ~13% APY, while Binance (via Binance Earn) offers 60+ assets up to ~10% APY koinly.io. Kraken lets you stake 20+ assets (up to 21% APY for some) koinly.io. Other popular services include KuCoin, Nexo, Gemini, and decentralized pools like Lido and Rocket Pool for ETH.

Coinbase: Beginner-friendly, supports staking of ETH, ADA, DOT, ATOM, SOL, and others. Rewards are paid weekly. (Up to 13% APY on some assets koinly.io.)
Binance: Wide selection (60+ coins) offers flexible and locked staking. Features such as principal-protected options. (Up to 10% APY koinly.io.)
Kraken: Over 20 blockchains supported, with both flexible and “bonded” (locked) options. Known for strong security. (Up to 21% APY on certain tokens koinly.io.)
Crypto.com: Supports 30+ coins. Flexible terms and higher rewards if you hold its CRO token. (Up to 19% APY on select coins koinly.io.)
Lido / Rocket Pool: If you have ETH, these let you stake without 32 ETH minimum. They issue liquid tokens (stETH, rETH) you can trade. (Lido: ~8% APR koinly.io, Rocket Pool: ~3.3% APR.)
Others: Nexo (staking wallet tokens for bonus interest), KuCoin, Gemini, and even hardware wallets (Ledger via third-party) offer staking with varying yields koinly.io.

Each platform has its own fees, lock-up periods, and minimums. Always compare APYs and terms. For example, high advertised APYs might come with longer lock-ups or mandatory loyalty programs. Reputable sources like Koinly (2025) have rounded up these platforms to help investors compare koinly.io.

Conclusion

Crypto staking offers a simple path to passive income on your crypto holdings. By staking coins in a PoS network, you earn rewards much like earning interest on savings, while also bolstering the blockchain’s security. As experts note, staking rewards vary with network factors and are not as volatile as trading gains. It’s a way to make your crypto work for you – as Kraken summarizes, you can “earn rewards without selling your assets” by staking.

As a final tip, start small and choose trusted platforms. Research each coin’s inflation and project fundamentals before staking. Explore community and expert reviews (e.g. coin staking guides) to pick the best fit. Remember to factor in risks like price swings and lock-up terms.

Ready to start staking? Comment below with your favorite staking platform or coin, share this guide if it helped, and subscribe for more crypto insights. Turn your idle crypto into a steady income stream and be part of securing the next generation blockchain networks!