Tokens at work
What Staking Means
Staking is a bit like a savings account, just for crypto.
You agree to set your tokens aside for a while, and the network pays you a reward for it. The reward rate is not locked in either. It can go up or down over time.
Your tokens are still yours the whole time. But while they are staked, you cannot spend them right away. If you want them back, you usually have to wait.
So staking is not "free money." You are being paid because your tokens are helping the network stay secure and running.
Bank Deposit, But With More Responsibility
Staking can feel similar to a bank deposit: you commit your capital for a period of time and receive a percentage reward.
But there is one major difference. In a bank, the institution manages the system for you. In DeFi, you are interacting with the network directly, so you must understand the risks.