What is crypto staking? How proof of stake rewards work
By SendPay Business · · 2 min read
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Staking means locking up coins on a proof of stake blockchain, such as Ethereum, to help secure the network. In return, the network pays out new coins or fees as rewards.
How proof of stake works
Instead of miners using computing power, proof of stake networks choose validators to add new blocks based on coins they have staked. Validators who act dishonestly or go offline can lose part of their stake, which is called slashing.
Ways people stake
- Running their own validator, which needs technical skill and a minimum amount of coins.
- Delegating coins to a validator run by someone else.
- Using a staking service offered by an exchange or other provider.
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The risks
Rewards are not guaranteed and are paid in a coin whose price can fall. Staked coins can be locked for a period, slashing can cut the stake, and using a third party adds the risk of that provider failing. In the UK, crypto isn't covered by the Financial Services Compensation Scheme.
Where SendPay fits
SendPay doesn't offer staking. SendPay crypto exchange platforms let your customers buy, sell and hold crypto under your own brand, and you set your own trading fee. Assets are held with regulated partners.
How it works
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Questions people ask
How much could staking earn?
Work out rewards in coins and in your currency, after commission.
Staking rewards calculator →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.