StrategyBeginner#Passive Income#Consensus
Staking
S
Definition
The process of locking up digital assets to support a network's operation in exchange for newly minted rewards.
Verified by CryptoLV Alpha
Concept Diagram
Key Takeaways
1
Staking locks your tokens to help secure a PoS blockchain in exchange for rewards
2
You earn a percentage yield from newly minted tokens and transaction fees
3
Risks include illiquidity during unbonding periods and slashing from misbehaving validators
4
Enables passive portfolio growth even in sideways markets
Practical Example
You stake 10 ETH on Lido and earn ~3.5% APY - generating 0.35 ETH per year passively while your tokens help secure the Ethereum network.
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Related Terms
Blockchain
EigenLayer StakingThe process of 'Restaking' ETH or LSTs to secure multiple networks simultaneously, providing hyper-efficient yield.
Blockchain
LST (Liquid Staking Tokens)Tokens that represent staked assets (like stETH for ETH), allowing users to earn staking rewards while keeping their capital liquid for DeFi.
Blockchain
NodeA computer that participates in a blockchain network by storing, validating, and broadcasting transaction data.
Blockchain
Proof of Stake (PoS)A consensus algorithm that chooses validators based on the number of tokens they hold and are willing to 'stake'.
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