Staking

Staking is the Proof of Stake version of mining: you lock up (“stake”) tokens to become a validator or to delegate to one. The network pays rewards for securing it and can slash — confiscate — stake that misbehaves.

Lockup and rewards

Staked tokens are usually locked for a period before they can be withdrawn, and rewards compound over time. Delegating to a pool lets small holders participate; some projects offer liquid staking tokens so you can keep trading while staked.

Decentralization watch item

Whether stake is spread across independent validators or controlled by a few large pools is one of W3D’s key governance inputs. High staking is great for security only if the stake is actually distributed.

Related terms

Proof of Stake, Validator, Slashing, Yield, Node