Staking
Locking tokens to help validate a proof-of-stake blockchain, in exchange for a reward.
Securing a network for a reward
In a proof-of-stake blockchain such as Ethereum, Solana or Cardano, blocks are validated by participants who lock tokens as a guarantee. In return they receive new tokens and a share of fees. If they cheat or stay offline, part of their stake can be destroyed: that is slashing.
The staking yield on ETH is around 3% a year. It is paid in ETH: it offers no protection against a fall in price.
Common mistakes
- Forgetting dilution: a 6% yield on a token whose supply grows 6% creates no wealth.
- Handing tokens to a platform that stakes for you without knowing whether it lends them too.
Questions and answers
What is liquid staking?
You receive a token representing the staked ETH (stETH for example), usable elsewhere while the ETH earns. It can trade slightly below its value in times of stress.
How are rewards taxed in France?
The regime is still debated; in practice tax applies when you sell for euros, at the 30% flat rate for individuals. Check the current tax guidance.
Notitia newsroom · education, not investment advice.