Crypto staking: the only yield nobody has to repay you

How staking creates a reward out of nothing

A proof-of-stake blockchain needs participants to put capital at risk in order to validate transactions honestly. If they misbehave, the protocol destroys part of that capital. If they behave, the protocol pays them newly issued coins plus a share of transaction fees. That payment is the staking reward.

Notice what is absent from that description: any borrower, any credit decision, any promise from a company. The reward exists because the blockchain's rules say it does. Ethereum will keep issuing to validators whether or not any particular exchange is solvent. This is why staking rewards on Cosmos and Ethereum carried on being paid, uninterrupted, right through the 2022 collapse of the centralised lending sector.

The second thing worth understanding is that the rate is not a business decision. It comes out of the chain's monetary policy, and it usually falls as more of the supply gets staked — the same issuance divided among more validators. Ethereum's base staking APR has drifted from the 4–5% range in 2024 to roughly 3.2–3.8% by early 2026, purely because more ETH is staked. No platform can reverse that, and anyone promising to has found a way to add risk rather than yield.

What each chain actually pays

These are network-level rates before any platform commission. The spread between them has almost nothing to do with quality and everything to do with each chain's issuance design — a high staking rate on a small chain often just means high inflation, which dilutes anyone not staking.

The four ways to stake, and who each suits

Through an exchange. You deposit, click stake, and the platform handles validator selection, infrastructure and payouts. Simplest by a wide margin. You pay commission and you accept custody risk. This is the right choice for most people holding modest amounts.

Delegating from your own wallet. You keep custody and choose a validator yourself, paying only that validator's commission — often 5% to 10% rather than an exchange's 25% to 35%. You need to understand your chain's delegation interface and monitor validator performance. Meaningfully better economics for anyone comfortable with the tooling.

Liquid staking. You deposit ETH with a protocol like Lido and receive stETH, a token that accrues rewards while remaining tradable and usable as DeFi collateral. You keep liquidity, which solves the biggest practical objection to staking. You add smart-contract risk and the possibility of the token trading below its underlying asset during stress. See our liquid staking guide.

Running your own validator. Maximum reward, maximum responsibility. On Ethereum this means 32 ETH and genuine uptime obligations. For almost everyone reading this, the arithmetic does not work.

The commission problem nobody advertises

This is where the real differences between platforms live, and it is almost always disclosed in a help article rather than on the product page. Coinbase takes roughly 25% to 35% of gross staking rewards. Kraken's commission reaches 30% on some assets and varies by tier. Lido charges a flat 10%. Several exchanges quote the gross network APY in the app and only mention the deduction in a footnote.

The effect compounds over years. On a $20,000 ETH position at a 4% gross network rate, a 10% fee costs you $80 a year and a 33% fee costs you $264. Over a five-year hold that gap is close to a thousand dollars on a single position — from an identical underlying asset, staked into an identical protocol.

There is also a subtler version. Kraken's flexible staking pays rewards on only a portion of the balance you allocate, with the bonded alternative paying on all of it but locking it on-chain. That is disclosed, and it is a reasonable product design, but a user comparing advertised APYs across venues will get the comparison badly wrong if they miss it.

Bonding, unbonding and why exit timing matters

Most proof-of-stake chains do not let you leave instantly. Cosmos imposes a 21-day unbonding period; Polkadot 28. During that window your coins earn nothing and you cannot sell them. If the market moves against you on day three, you watch.

This is a protocol-level rule, not a platform choice, and it exists for good reasons — it stops a validator from misbehaving and immediately withdrawing. But platforms handle it very differently. Some pass the delay straight through to you. Others maintain a liquidity buffer and let you withdraw immediately, absorbing the timing mismatch themselves. A handful impose their own lock on top of the chain's.

For anyone who might need access, this matters more than a percentage point of yield. We would take 5% with instant withdrawal over 6% with a 28-day queue almost every time, and we think most people would too once they have actually experienced waiting out an unbonding period during a drawdown.

How to start staking, step by step

What can actually go wrong

Price risk dwarfs everything. A 10% staking reward on an asset that falls 40% is a 34% loss. Staking does not change your exposure to the underlying asset; it only adds a small return on top of it. This is the risk that actually costs people money, and it is the one least discussed on staking landing pages.

Custody risk, if an exchange holds your coins. Staking through a platform means that platform controls the keys. A failure there affects you regardless of how healthy the blockchain is.

Slashing. Real but rare on the major networks, and most reputable operators either insure it or absorb it contractually. Worth checking the policy; not worth losing sleep over.

Concentration. Lido's share of staked Ethereum is large enough that it is a live governance concern in the Ethereum community. If you are staking specifically to support network security, where you stake is part of that decision.