What is staking?

Staking is the process of locking up your cryptocurrency to receive additional rewards in the same token.

Some cryptocurrency exchanges and projects offer fixed percentage returns, while others offer a variable percentage return, which distributes rewards between everyone who has staked.

In the case of variable percentage return (APR), the percentage will vary based on the supply of the rewards and the demand for them. So, the more demand there is, the smaller the percentage will be, as there are more people receiving rewards.

How does staking work?

If a cryptocurrency you own allows staking, you can “stake” some of your holdings and earn a percentage-rate reward over time. This usually happens via a “staking pool” which you can think of as being similar to an interest-bearing savings account.