Staking is the act of pledging your crypto to help secure and verify transactions on a blockchain. In return for this, you earn rewards from the network.
The incentive for staking is earning rewards. Staking rewards are a kind of income paid to crypto owners who help regulate and validate a cryptocurrency’s transactions. In that sense, staking rewards are like a dividend or interest on a savings account but with much greater risk. Rewards are paid in the cryptocurrency that you’re staking.
"Don't demand that things happen as you wish, but wish that they happen as they do happen, and you will go on well."
- Epictetus, The Enchiridion
Like a lot of things in crypto, staking can be a complicated idea or a simple one depending on how many levels of understanding you want to unlock. For a lot of crypto users, knowing that staking is a way of earning rewards while holding onto certain cryptocurrencies is the key takeaway. But even if you’re just looking to earn some staking rewards, it’s useful to understand at least a little bit about how and why it works the way it does.