One ether staked on 8 November 2026 was earning roughly 2 percent a year, whichever big provider held it. At 09:55 UTC DefiLlama showed an APY of 2.25 percent for Lido’s stETH and for Coinbase’s cbETH, 2.22 percent for Binance’s WBETH and 1.93 percent for Rocket blockchain that runs exactly as written when it is called, holding and moving funds according to its code, without an intermediary able to change the outcome.">smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">Pool’s staking means depositing a proof of stake coin with a protocol that stakes it for you and issues a transferable token (such as Lido stETH or rETH) representing the deposit plus rewards, which you can use or sell while the coins stay staked.">rETH. The rates sit close together. What sits behind them does not. Who holds the keys? How long does the exit take? And who carries the loss if the operator or the platform fails?
The answer to what is staking crypto starts there. You lock coins on a proof-of-stake blockchain so that they back the validators who produce and check blocks, and the network pays you a share of the new coins it creates plus part of the fees users pay. It is a job you hire your coins for. The pay is modest, it is not guaranteed, and the contract you sign (a protocol rule, a pool’s smart contract or an exchange’s terms of use) decides most of the risk.
Nothing here asks you to stake. The aim is narrower: to let you read a staking screen and know what the number hides, using dated cases from Kraken, Celsius and the rules of five networks. It follows the previous lesson of the consensus path, on MEV and the ordering power of block proposers, because part of what stakers earn is that same MEV.
What is staking crypto, in plain words
A staking network chooses who writes the next block by looking at how many coins each participant has put at risk, not at how much computing power they burn. The participants are called validators. A validator runs software that proposes blocks when its turn comes and votes on the blocks of others. If it does the job, it is paid. If it breaks the rules, part of its stake can be destroyed, a penalty called slashing.
A few words come back in every section. To stake is to lock coins so they count for a validator. To delegate is to assign your coins to a validator run by someone else, usually without handing over the coins themselves. Unbonding is the waiting period between the moment you ask for your coins back and the moment you can move them. APR is the yearly rate without compounding, APY the rate with compounding: our guide on the difference between APR and APY shows why the two numbers on a staking screen rarely match.
Ethereum’s version of this machine, with its 32 ETH validators, committees and attestations, is explained in our lesson on proof of stake in depth. Here we take the holder’s seat: you have coins, and you want to know whether, how and at what risk to put them to work.
Where staking rewards come from: issuance, fees and MEV
Staking rewards are not interest in the banking sense. Nobody borrows your coins and pays you for the loan. The money comes from the protocol itself and from the people who use the chain.
New coins first, fees and tips second
The largest source on most networks is issuance: the protocol creates new coins every epoch and hands them to validators who did their job. On Ethereum the base reward per validator falls as more ether is staked, in proportion to the inverse square root of the total stake, so the rate shrinks when the crowd grows. Our lesson on validator rewards, penalties and slashing walks through that formula.
The second source is fees. When a validator proposes a block, it collects the priority tips users attach to their transactions, and on Ethereum it can also sell the right to build the block to specialised builders through MEV-Boost. That extra income is the maximal extractable value described in the previous lesson. It is lumpy: a validator may wait weeks for its turn to propose, then receive a large tip in one block. Pools and exchanges smooth it across many validators, which is one reason small holders use them.
Nominal yield is not real yield
Staking rates are paid in coins, not in dollars, and part of it is paid by diluting everyone who does not stake. A simple example with round numbers, chosen for the arithmetic and not taken from any network, shows the effect.
Take a chain with 100 coins. Half are staked. Over a year the protocol creates 3 new coins and pays all of them to stakers. Each staker earns 6 percent on paper, since 3 coins are shared among 50. But the supply is now 103 coins. A holder who staked 1 coin ends the year with 1.06 coins, or 1.029 percent of the network instead of 1 percent: a real gain in share of about 2.9 percent. A holder who did not stake still has 1 coin, now 0.971 percent of the network, a loss of share of about 2.9 percent.
That is why staking on a network with high issuance is partly self-defence. The headline rate overstates what you gain in ownership, and the price of the coin can move far more than the rate in either direction. Ethereum adds a twist: part of the fees is burned, so its net issuance depends on how busy the chain is. Rates above about 10 percent should make you ask who is paying, and whether the payer is the protocol, the users or the next depositors.
Rates on 8 November 2026
The table gathers the liquid staking rates that DefiLlama’s yields service showed on the morning of 8 November 2026, after each provider’s fee. They are snapshots that change daily, and past rates say nothing certain about future ones.
| Product (network) | APY shown by DefiLlama | Value staked (dollars) | Who runs the validators |
|---|---|---|---|
| Lido stETH (Ethereum) | 2.25% | about 21.7 billion | node operators chosen by Lido’s governance |
| Binance WBETH (Ethereum) | 2.22% | about 8.2 billion | Binance |
| Coinbase cbETH (Ethereum) | 2.25% | about 0.44 billion | Coinbase |
| Rocket Pool rETH (Ethereum) | 1.93% | about 1.09 billion | independent operators who post a bond |
| JitoSOL (Solana) | 4.96% | about 0.92 billion | validators chosen by the Jito stake pool |
Source: yields.llama.fi, read at 09:55 UTC on 8 November 2026. Native staking on Cardano, Polkadot or the Cosmos Hub pays rates that depend on the validator and its commission; the wallet that you delegate from shows the current estimate before you sign, and that estimate is the figure to compare.
Five ways to stake, from your own server to an exchange
ethereum.org orders the options from the most protocol-native to the most abstracted: home staking is labelled trustless, centralised exchanges carry the highest trust assumptions. The same ladder works on other networks, with one change: on chains built for delegation, the self-custody route is also the easy one.
| Method | Minimum | Who holds the keys | Who pays you | Main risk |
|---|---|---|---|---|
| Solo validator | 32 ETH on Ethereum | you | the protocol, directly | your own mistakes: downtime, slashing |
| Staking as a service | 32 ETH | operator holds signing keys, you usually keep withdrawal keys | the protocol, minus the operator’s fee | the operator’s competence and honesty |
| Pooled or liquid staking | any amount (some pools accept 0.01 ETH) | the pool’s smart contracts and operators | the pool, through a token | smart-contract bug, token trading below value |
| Exchange staking | any amount | the exchange | the exchange, under its terms | custody: the exchange fails or changes its terms |
| Native delegation (Cosmos, Solana, Cardano, Polkadot) | low, network rules | you, in your own wallet | the protocol, through the validator, minus commission | validator penalties, unbonding wait |
Source: ethereum.org staking page, 8 November 2026, for the Ethereum rows; network documentation for the last row.
Running your own validator
On Ethereum a solo validator needs at least 32 ETH and, since the Pectra upgrade, can hold up to 2,048 ETH. You run two programs, an execution client and a consensus client, on a dedicated machine connected almost all the time. You keep the full reward and depend on nobody. You also carry every mistake: a machine that goes offline loses income, and a careless setup that signs twice with the same key can get slashed. Solo staking is the option ethereum.org treats as the most trust-minimised, and the one that asks the most work.
Staking as a service and bonded operators
If you have 32 ETH but no wish to run a server, a staking-as-a-service provider runs the validator for you. You hand over the signing keys, which let the operator vote, and you usually keep the withdrawal keys, which decide where the ether goes when the validator exits. The operator cannot walk away with your stake in that set-up, but its errors can still cost you rewards or trigger penalties. Some pools turn the idea around: independent operators post a smaller bond of their own and run validators with pooled ether from others, as Rocket Pool does.
Pooled and liquid staking
A pool accepts any amount, stakes it across many validators and gives you a token that stands for your share, such as stETH or rETH. That token can be sold or used in DeFi while the ether underneath keeps earning. Our lesson on liquid staking tokens such as stETH and rETH covers how they accrue rewards and what happened when stETH traded at a discount in 2022. Restaking, which reuses staked ether to secure other services for extra pay and extra slashing risk, is a further step, described in our guide to restaking with EigenLayer and liquid restaking tokens; the next lesson of this path, on liquid staking and restaking, returns to both.
Staking on an exchange
Exchange staking is a button: you choose a coin, click stake and see a rate. The exchange pools customer coins, runs or hires validators and pays you what it promised after its commission. Our guide to how centralised exchanges work explains why coins on an exchange are, in practice, a claim on the company. The commission is set in the exchange’s terms and can change, and so can the list of coins, the exit time and the countries where the product is offered.
The legal history in the United States shows how fast those terms can move. On 9 February 2023 the SEC announced that two Kraken entities had agreed to immediately stop offering or selling securities through crypto staking services and to pay 30 million dollars in disgorgement, prejudgment interest and civil penalties, without admitting or denying the allegations. The SEC said the program had advertised annual investment returns of as much as 21 percent, and charged the companies with failing to register its offer and sale. That settlement was not part of the 2025 dismissal described below.
A different SEC lawsuit, against Kraken’s operator Payward, was filed on 20 November 2023 over the way Kraken ran its trading platform. On 27 March 2025 the SEC filed a joint stipulation to dismiss that case with prejudice, saying the decision rested not on any assessment of the merits but on its effort to reform its approach to crypto. Readers sometimes merge the two cases. They are separate, and the staking settlement was never dismissed.
Delegating from your own wallet
On networks built for delegation, a holder can stake without giving custody to anyone. The steps are the same in spirit on the Cosmos Hub, Solana, Cardano and Polkadot, even if the buttons differ. You open a wallet that supports staking on that network, pick a validator or pool from the list, enter an amount and sign a delegation transaction. Rewards then accrue to your address, and to stop you sign an undelegation and wait for the unbonding period. The validator never receives your coins; it only receives the weight of your stake, as our lesson on delegated proof of stake explains for networks that elect a small set of producers.
Cardano goes furthest in that direction. Its official delegation page says that ada stays in your wallet and remains spendable at any time, with no lock-up, and that first rewards arrive about 15 to 20 days after delegating, then every epoch, provided the chosen pool makes blocks. A new stake key requires a refundable deposit. Since the Plomin hard fork, rewards can be withdrawn only if the stake key also delegates its vote to a DRep, or to the abstain or no-confidence options; rewards keep accumulating in the meantime.
Polkadot changed its rules for holders in 2026. Until then both validators and nominators could be slashed, and a nominator needed 28 days to unbond. Referendum 1910, listed as executed on Polkassembly and announced as enacted on the Polkadot forum on 6 July 2026, ended both for nominators: they are no longer slashable, and their unbonding now takes about two days (two eras). Validators are unchanged: they remain slashable on their own stake and keep their unbonding periods. Unbonding requests opened before the upgrade stay on the old 28-day schedule. A nominator still earns nothing when its stake is not backing an active validator. On 8 November 2026 the chain’s staking settings, read through Polkadot Asset Hub’s public RPC, put the minimum to be an active nominator at 191.28 DOT and 250 DOT to nominate validators directly; below that, a nomination pool accepts 1 DOT.
On Solana, stake sits in a stake account controlled by your wallet’s keys. Leaving is not instant either: the validator guide published by Anza, the team behind the main Solana client, says deactivating stake cools down over a period that may take several epochs, depending on the size of your stake and the total being moved, and that cooling stake keeps earning rewards in the meantime. Rewards are paid at epoch boundaries, so a Solana exit is measured in epochs, not in minutes.
The risks of staking, one by one
People new to staking tend to fear slashing most. It is the rarest of the risks for a careful holder. Exit delays, custody failures, contract bugs and plain price moves have cost far more people far more money.
Slashing is rare, missed rewards are common
On Ethereum a validator that goes offline is not slashed. Per ethereum.org, it is penalised for each missed source and target vote by an amount equal to the reward it would have earned, while a missed head vote or a missed block proposal carries no penalty. Two days offline therefore cost roughly two days of income, not the stake. Slashing is reserved for provable misbehaviour, such as signing two different blocks for the same slot. A slashed 32 ETH validator has 0.0078125 ETH burned at once, enters a 36-day removal period and, on day 18, receives a correlation penalty that grows with the amount of stake slashed around the same time. That last rule is designed to punish mass failures, such as many validators of one operator misbehaving together, far harder than an isolated error.
The Cosmos Hub documentation sets the numbers differently: 5 percent of stake for double signing and 0.01 percent for downtime, defined as missing more than 95 percent of the last 10,000 blocks, about 19 hours. Delegators are slashed in proportion to their stake, so choosing a validator is a risk decision as much as a fee comparison. Real slashing events with dates are listed in our lesson on validators.
Lock-up and unbonding: the exit is not instant
Staked coins are not cash. Each network sets a waiting period between the request to leave and the moment the coins move, and during that wait you cannot sell them, even if the price is falling.
| Network | Exit or unbonding | Slashing for delegators or stakers | Source and date |
|---|---|---|---|
| Ethereum | queue that changes daily; on the morning of 8 November 2026, 8,716 ETH waiting to exit (about 1 day and 3 hours, plus about 7.1 days to sweep) and 944,812 ETH waiting to enter (about 16 days and 21 hours) | yes, initial 0.0078125 ETH on 32 ETH, 36-day removal | validatorqueue.com (morning of 8 November 2026) and ethereum.org |
| Cosmos Hub | 3 weeks, still exposed to slashing for earlier faults | yes, 5% double sign, 0.01% downtime | Cosmos Hub validator FAQ, 8 November 2026 |
| Polkadot | about 2 days for nominators since 6 July 2026 (28 days for requests opened before), no rewards while unbonding; validators unchanged | no for nominators since 6 July 2026; yes for validators | Polkadot forum and Polkassembly (referendum 1910), 8 November 2026 |
| Cardano | no lock-up, ada stays spendable | no penalty for delegators listed by cardano.org | cardano.org, 8 November 2026 |
Ethereum’s figure is the one that moves most. The protocol lets only a set amount of ether enter or leave each epoch, 256 ETH per epoch in each direction according to validatorqueue.com that morning, so the wait depends on how many others want to leave at the same time. A calm week can mean a day; a rush to the exit after a hack or a market crash can mean weeks. After a validator exits, its ether still has to be swept to the withdrawal address, a step validatorqueue.com estimated at about 7.1 days that morning. On an exchange, add the platform’s own processing time to the protocol’s wait. On the same morning, 44.4 million ETH, 36.37 percent of the supply, was staked according to the same site, which does not timestamp its figures.
Custody and counterparty: read the terms of use
When an exchange or a lender stakes for you, your first risk is not the blockchain. It is the company. The clearest lesson comes from Celsius, a crypto lender, not a staking protocol, which paid yield on deposits in its Earn accounts. On 4 January 2023 Judge Martin Glenn of the US Bankruptcy Court for the Southern District of New York held that the coins in those accounts, worth about 4.2 billion dollars when Celsius filed, were presumptively property of the bankrupt estate, because the terms of use customers accepted gave Celsius all rights and title to them. Earn customers were left with claims against the estate rather than coins of their own, and Morrison Foerster noted at the time that those claims were likely to suffer haircuts. The ruling left individual defences for later and did not decide who owned the coins in Celsius’s other programs.
The lesson carries over to any product that pays yield on coins you hand to a company. If the terms give the platform title to your coins, or the right to lend them, you are a creditor when things go wrong. If the terms say the coins stay yours in segregated custody, you are in a stronger position, but you still depend on the company keeping its word. Native delegation from a wallet you control removes that layer: our guide to protecting your seed phrase covers the part that then becomes your job.
Smart-contract and operator risk
Pools and liquid staking tokens add code between you and the validator. A bug in the pool’s contracts, a compromised oracle that reports rewards or a governance attack could cost depositors money, and audits reduce that risk without removing it. The token you receive can also trade below the ether it stands for when many holders want to leave at once, which matters if you need to sell before the pool can redeem.
Operator risk is the quiet one. A pool or exchange that runs many validators with the same software and the same set-up can suffer a correlated failure, which is exactly the case Ethereum’s correlation penalty punishes hardest. ethereum.org also warns that very large pools and exchanges concentrate stake and become a single point of failure for the network itself.
Price and liquidity: staking does not protect your capital
Rewards of 2 or 3 percent a year are small next to the price swings of the coin you stake. An example with illustrative numbers: you stake 1 ETH bought at an example price of 3,000 dollars and earn 2.5 percent, so you hold 1.025 ETH after a year. If the price falls 20 percent to 2,400 dollars, your position is worth 2,460 dollars, a loss of 540 dollars despite the rewards. If you needed to sell during the fall, the unbonding wait may have kept you from doing so.
Liquidity matters for the same reason. Money you may need within weeks is a poor fit for a network with a three-week exit, and a liquid staking token only helps if a buyer is there at a fair price on the day you sell.
Fake staking platforms
The easiest way to lose everything while staking is not slashing. It is a website that promises a fixed high return, takes your deposit and never pays it back. Even a real exchange, Kraken, advertised returns of up to 21 percent before its 2023 settlement with the SEC. A site that guarantees daily or monthly percentages far above the network rates in the table above is not paying you from staking at all, since no proof-of-stake network issues coins at that pace. Our guide to fake crypto investment platforms lists the warning signs to check before sending any money.
How staking rewards are taxed in the US, the UK and France
Tax treatment depends on your country and situation, and this section is general information, not advice. In most places the question is the same: are rewards taxed when you receive them, or only when you sell?
United States: income at receipt, a question the courts left open
The IRS answered in Revenue Ruling 2023-14. A cash-method taxpayer who stakes and receives new tokens as rewards must include their fair market value in gross income for the year in which they gain dominion and control over them, with the value measured at the date and time of that control. The ruling applies the same answer when the staking is done through an exchange. When the tokens are later sold, the gain or loss is measured from that value; our guide to crypto taxes in the United States covers that step.
The courts have not ruled on the merits. Joshua and Jessica Jarrett, Tezos stakers, paid tax on their 2019 rewards and sued for a refund, arguing that newly created tokens are not income until sold. The IRS refunded the tax, the district court dismissed the case as moot and the Sixth Circuit affirmed on 18 August 2023, so the timing question stayed undecided. On 10 October 2024 the couple filed a new suit in the same Tennessee federal court over their 2020 rewards, again arguing that staked tokens are new property; the IRS answered that the rewards are income on receipt.
Securities law is a separate question. On 29 May 2025 the SEC’s Division of Corporation Finance published a staff statement saying that, in its view, solo staking, staking through a third-party node operator without giving up custody, and certain custodial arrangements do not involve the offer and sale of securities. The statement says it has no legal force or effect and does not address liquid staking, restaking or liquid restaking.
United Kingdom and France
HMRC’s Cryptoassets Manual, at CRYPTO21200, says staking by an individual may amount to a trade depending on the degree of activity, organisation, risk and commerciality. If it is not a trade, the sterling value of the tokens when received is taxed as miscellaneous income, reduced by appropriate expenses, and Capital Gains Tax may apply when the tokens are later disposed of. Our guide to crypto taxes in the United Kingdom covers the disposal side.
In France, the tax administration’s crypto questions page, last modified on 17 July 2026, places profits from mining and staking in the non-commercial profits category (bénéfices non commerciaux), separate from the 31.4 percent flat tax that applies to disposals of digital assets by individuals. The page does not settle every DeFi case, and the treatment of pools and liquid staking tokens remains unsettled. Our guide to crypto taxes in France sets out the declaration forms.
| Country | When rewards are taxed | Later sale | Source |
|---|---|---|---|
| United States | income at fair market value when you gain control | capital gain or loss from that value | IRS Rev. Rul. 2023-14 (2023) |
| United Kingdom | miscellaneous income at receipt, unless a trade | Capital Gains Tax may apply | HMRC CRYPTO21200 |
| France | non-commercial profits (BNC) | 31.4% flat tax on disposals | impots.gouv.fr, modified 17 July 2026 |
A careful first stake, step by step
None of this is a recommendation to stake. If you decide to, a few habits remove most of the avoidable risk.
- Write down, before you click, who will hold the keys, who pays you, how long the exit takes on that network today, and what the terms say happens if the provider fails.
- Reach staking sites and wallets by typing the official address or from the network’s own documentation, never from an advert, a direct message or a search sponsored link.
- Never type a seed phrase into a staking website: a real staking interface asks you to sign a transaction in your wallet, never for the words that control it.
- Start with a tiny amount, or a testnet where the network offers one, and complete a full cycle of delegating, receiving a reward and undelegating before adding more.
- Check the validator’s commission, uptime and share of total stake; on networks with slashing for delegators, spreading stake across more than one validator limits the damage of a single fault.
- Keep a record of each reward with its date and dollar value at receipt, since the US and UK rules look at that moment.
The next lesson of this path looks at liquid staking and restaking in more depth: what happens when staked coins are turned into tokens, and those tokens are staked again.
