What Is Staking in Crypto? A 2026 Beginner's Guide

What is staking in crypto? Staking means locking up a proof-of-stake cryptocurrency so it helps secure the blockchain. Validators use staked tokens as a security deposit to propose and confirm blocks, and the network pays them, and the holders who delegate to them, newly issued tokens plus a share of fees. You keep ownership of your tokens, earn more of the same token over time, and accept a lock-up period and the token's price risk in return.

Staking is the simplest way to earn on crypto you already hold, and also the most misunderstood. The word covers everything from securing a proof-of-stake network to an exchange promotion that has nothing to do with a blockchain. This guide explains what staking actually is, how it works step by step, where the rewards come from, what it realistically pays on the networks JewelSwap supports as of October 2026, the different ways to stake, how it is taxed, and the ways it goes wrong.

What staking is

Proof-of-stake blockchains such as Sui, MultiversX, Radix and Ethereum do not use miners. Instead, validators lock up the network's native token as collateral and take turns proposing and confirming blocks. If they behave, the protocol pays them newly issued tokens plus a share of transaction fees. If they go offline or misbehave, they lose rewards or, on some chains, part of their stake through slashing.

Most holders do not run a validator. They delegate: point their tokens at a validator and share in its rewards, minus a commission. Your tokens never leave your wallet's control, the validator cannot spend them, and you can undelegate later. That delegation is what most people mean by "staking".

The stake is what makes the system secure. A validator that tries to cheat puts its own deposit, and its delegators' rewards, at risk. The more value staked, the more expensive an attack becomes. On Sui, for example, about 71% of the SUI supply was staked on 5 October 2026 (StakingRewards); on MultiversX about 14.3 million of 30.9 million EGLD, roughly 46% (MultiversX API, 5 Oct 2026).

How staking works, step by step

1. You choose a network and a validator. Each proof-of-stake chain has its own validator set. You compare commission, uptime and how much stake each already has.
2. You delegate. A transaction from your wallet assigns your tokens to that validator. On most chains the tokens stay in your non-custodial wallet or in a protocol-level stake object you control.
3. Your stake becomes active. Networks count stake per epoch. Sui, for instance, uses 24-hour epochs and pays rewards only for epochs in which your stake was active for the whole epoch (Sui docs, checked 5 Oct 2026).
4. Rewards accrue. At each epoch boundary the protocol distributes rewards to validators, which pass them on to delegators after commission. Depending on the chain you claim them, they are added to your stake automatically, or they show up as a rising exchange rate on a stake token.
5. You unstake. You submit an undelegate transaction. On some chains the tokens come back at once; on others they sit in an unbonding queue for days, earning nothing and unable to move.

Where the rewards come from

Staking rewards are not interest paid by a company. They come from two protocol-level sources:

• Issuance. The chain mints new tokens on a schedule and distributes them to stakers. This is why staking yields tend to fall over time as issuance schedules taper.
• Fees. A share of transaction fees is routed to validators and, through them, to delegators.

Because rewards are paid in the token you staked, the real return depends on the token's price. A 7% staking yield on a token that falls 30% is still a loss in dollar terms. Staking increases your token count; it does not protect you from the market. Issuance also dilutes holders who do not stake, so part of a staking reward simply keeps your share of the network from shrinking. Fee-funded rewards are closer to what DeFi calls real yield.

Quoted rates can be APR or APY; the difference is whether compounding is included. See APY vs APR before comparing two numbers.

What it pays on the networks we support

Yields move with total stake and issuance, so treat these as snapshots, not promises, and check live figures before committing:

Network	Network reward rate (5 Oct 2026)	Reward cadence	Unstaking delay
Sui	About 1.5% (StakingRewards)	Every epoch (24h)	Unstake transaction returns principal and rewards; only full epochs earn
MultiversX (EGLD)	About 8.8% network average, before staking-provider fees (MultiversX API)	Every epoch (~24h)	A little over 10 epochs, ~10 days (docs)
Radix (XRD)	About 6.0% (StakingRewards)	Emitted at the end of each epoch	2,016 epochs, ~7 days (Radix)

Validator commission is deducted before you see any of this. A 5% commission on a 3% yield leaves you with 2.85%; a 100% commission, which exists on some networks, leaves you with nothing. Always check it. For a deeper look at one network, see Sui staking rewards explained.

Five ways to stake

• Running a validator (solo staking). You operate the node yourself. Most control and most work. On Ethereum it requires at least 32 ETH to activate your own validator (ethereum.org, checked 5 Oct 2026); other networks set their own minimums and hardware requirements.
• Native delegation. You delegate to someone else's validator from your own wallet. This is what most holders on Sui, MultiversX and Radix do. Guides: how to stake SUI, how to stake EGLD.
• Liquid staking. A contract delegates for you and gives you a transferable token. Explained below.
• Exchange staking. A centralised exchange stakes on your behalf. Convenient, but your claim is on the exchange. Explained below.
• Restaking. Already-staked capital is committed to secure additional services for extra rewards and extra slashing risk. See restaking explained.

Native staking vs liquid staking

Native delegation locks your tokens for the unstaking period. Liquid staking gives you a token that represents your stake, a liquid staking token (LST), so you can keep using the value while it earns. On JewelSwap, you mint JWLSUI, JWLEGLD or JWLXRD 1:1 against the underlying (any extra the protocol mints is Protocol-Owned Liquidity paired in the pool, not yours; the base token is designed to maintain 1:1 backing), stake it into the appreciating SJWLSUI, SJWLEGLD or SJWLXRD variant, and can unstake instantly back to the base token. Redeeming the base token for the original asset takes a 10-day unbonding period, tracked by a transferable claim NFT. The trade-off is that the liquid token can trade below its backing on the open market when many people want to exit at once. We compare the two models in detail in liquid staking vs native staking, and cover the risks in is liquid staking safe?

Liquid staking is now one of the largest categories in DeFi: DefiLlama tracked about $62 billion across 297 liquid staking protocols on 5 October 2026 (DefiLlama).

What "staking" on an exchange actually is

When a centralised exchange offers "staking", one of three things is happening: it delegates on your behalf and keeps a cut; it lends your tokens out and calls the interest staking; or it runs a promotional rate funded from its own pocket. Only the first is staking. The second and third carry counterparty risk that has nothing to do with the blockchain, which is why "staked" balances vanished in every major exchange collapse. If the yield is far above what the network pays validators, the difference is someone's balance sheet, not the protocol. More in CeFi vs DeFi.

Staking vs mining vs lending

• Staking vs mining. Both secure a blockchain. Mining (proof of work) spends electricity and hardware to compete for blocks; staking (proof of stake) puts capital at risk instead. Staking needs no special hardware if you delegate.
• Staking vs lending. Lending pays interest from a borrower, so the risk is the borrower or the lending protocol. Staking pays from the protocol itself. In DeFi, lending also exposes you to liquidations and utilisation swings that staking does not have.
• Staking vs yield farming. Farming pays you for supplying liquidity to a liquidity pool, usually with extra incentive tokens and the risk of impermanent loss. See what is yield farming.

How staking rewards are taxed

Rules differ by country, and this is not tax advice. In the United States, the IRS ruled in Revenue Ruling 2023-14 that a cash-method taxpayer who receives staking rewards includes their fair market value in gross income in the tax year in which they gain dominion and control over them, meaning the ability to sell, exchange or otherwise dispose of them (IRS Internal Revenue Bulletin 2023-33). Selling the rewards later can create a separate capital gain or loss. Keep a record of the date and value of each reward; check your local rules.

The risks that actually matter

• Price risk. The dominant one. Rewards are paid in a volatile asset.
• Lock-up risk. You cannot sell during the unbonding period. Ten days is a long time in a crash.
• Validator risk. Downtime costs rewards; on some chains, slashing costs principal. Delegating across several validators, as JewelSwap's Gauge mechanism does, reduces this.
• Smart-contract risk. Liquid staking adds a contract between you and the validator. Read the docs, check the audits, and size positions accordingly. Our checklist: how to check a DeFi protocol is safe.
• Counterparty risk. Exchange and "earn" products are loans to a company. Treat them as such.

How to start

1. Pick the network whose token you already hold.
2. Decide whether you want liquidity (liquid staking) or simplicity (native delegation).
3. Check the validator's commission and uptime, or the liquid staking protocol's docs and audits.
4. Stake an amount you will not need for at least the unbonding period plus a margin.
5. Then leave it alone; the compounding does the work.

Step-by-step guides: how to stake SUI, how to stake EGLD, and JWLXRD liquid staking on Radix. To compare providers, see best crypto staking platforms. For how staking fits alongside lending and farming, read what is DeFi and ways to earn passive income with crypto.

Frequently asked questions

What is staking in crypto, in simple terms?

Staking is locking up a proof-of-stake cryptocurrency to help secure its blockchain. In return the network pays you more of the same token. Most people do it by delegating their tokens to a validator, who runs the infrastructure and shares the rewards after a commission.

Is crypto staking safe?

Native delegation is one of the lower-risk ways to earn in crypto because your tokens stay in your wallet and the validator cannot spend them. The main risks are the token's price, the lock-up period, validator downtime or slashing, and, for liquid or exchange staking, smart-contract or counterparty risk.

Can you lose money staking crypto?

Yes. The most common way is price: if the token falls more than the rewards you earn, you lose money in dollar terms. You can also lose rewards or part of your stake to slashing, or lose funds held by an exchange or a faulty smart contract.

How much can you earn from staking?

It depends on the network. On 5 October 2026, network reward rates were about 1.5% on Sui, about 8.8% on MultiversX before provider fees, and about 6.0% on Radix. Validator commission comes off the top, and rates change as total stake and issuance change.

How long does it take to unstake crypto?

It depends on the chain. On Sui the unstake transaction returns principal and rewards, with rewards counted only for full 24-hour epochs. MultiversX releases undelegated EGLD after about 10 epochs (around 10 days) and Radix after 2,016 epochs (about 7 days).

Are staking rewards taxable?

In many countries, yes. In the United States, Revenue Ruling 2023-14 says staking rewards are income in the year you gain control over them, valued at fair market value at that time. Rules differ elsewhere, so check local guidance or a tax adviser.

Is staking the same as earning interest?

No. Interest is paid by a borrower. Staking rewards are paid by the blockchain protocol from new issuance and fees. Some exchange "staking" products are really lending, which is why the distinction matters.