staking

/STAY-king/ · noun · Startup & VC · Origin: 2012

Definitions

  1. The act of locking up cryptocurrency tokens to participate in network validation (in proof-of-stake systems) or to earn yield in DeFi protocols. Staked tokens typically can't be immediately withdrawn — there's an unbonding period. Rewards come from newly minted tokens and transaction fees, but staked funds can be slashed for validator misbehavior.

    In plain English: Locking up your cryptocurrency to help run the network and earning interest in return, like a certificate of deposit at a bank but with more risk.

    Example: He staked 32 ETH to run a validator node, earning about 4% APR while helping secure the network.

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