r/CryptoCurrency • u/AutoModerator • 16d ago

OFFICIAL Daily Crypto Discussion - August 11, 2025 (GMT+0)

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u/Alex2382535382 🟩 0 / 0 🦠 16d ago edited 16d ago

May somebody explain me how staking works? I read explanations over and over again but still don't get it... Might explain it on a beginner to intermediate level

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u/jawni 🟦 500 / 6K 🦑 16d ago

Kind of hard to know at what level to explain it if we don't know what you don't understand about it. A simple explanation might just tell you what you already know, a detailed one might go over your head.

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u/MichaelAischmann 🟦 1K / 18K 🐢 16d ago

Staking means giving control of your coins to a smart contract (code). What that code does can differ from things like securing a network (ETH) to facilitating borrowing & lending (AAVE) and more.

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u/MinimalGravitas 🟦 0 / 0 🦠 16d ago

Which chain are you asking about, it works differently for different networks.

For Ethereum and similar, entities that are staking run special nodes called 'validators'. To run one you lock a certain amount of the chain's native asset (in this case 32 ETH) which is 'at stake'.

The network then semi-randomly rotates through choosing a validator each slot (block) to propose a set of transactions to be included. A larger selection of validators are chosen to attest (vote) for accepting that proposed block or not. Assuming it is fine, that block then gets added to the chain. The proposer and the attestors all get a little reward for participating.

If a validator misses a proposal or an attestation that they were selected for then they lose roughly the same amount of ETH as they would have earned if they had done the job. This means that if you run a validator it needs to be online more than half of the time or else you will on average lose ETH rather than gain.

On the other hand, if a validator is intentionally misbehaving, such as voting both ways for attestations or something then they can get 'slashed'. This means the network takes and burns some of the ETH you have put at stake. This is largely where the security of the mechanism comes from, because bad actors will be punished financially.

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u/Slow_Train_6096 🟩 0 / 0 🦠 16d ago edited 16d ago

Everyone sees all transactions in a new block and votes on what they are. The number of votes you have depends on the number of coins you have (at stake). You are rewarded with new ETH for being a part of the consensus found in the vote, and penalised if you try to corrupt the vote.