What Is Staking?
Staking is the process of locking up cryptocurrency to help secure a blockchain network — and earning rewards in return. Think of it like a high-yield savings account, but instead of a bank holding your money, you're participating directly in the blockchain's security mechanism.
The concept comes from Proof of Stake (PoS) blockchains, where validators are chosen to create new blocks based on how much crypto they've "staked" as collateral. In exchange for participating, validators earn newly minted tokens and transaction fees.
As a regular user, you can stake without running a validator yourself — and still earn a share of the rewards.
How Does It Work?
On most Proof of Stake networks, you can delegate your tokens to a validator. The validator uses your staked tokens to increase their chances of being selected to validate transactions, and shares a portion of the rewards with you.
The process typically looks like this:
- You hold a stakeable token in your wallet
- You delegate it to a validator through a staking interface
- The validator earns rewards by participating in consensus
- You receive a proportional share of those rewards, usually compounded automatically
Annual percentage yields (APYs) vary widely — anywhere from 3% to 20%+ depending on the network, the validator, and current market conditions.
Types of Staking
On-chain staking. You interact directly with a blockchain's staking protocol. Maximum transparency, but requires technical know-how and usually a lock-up period.
Liquid staking. You stake your tokens and receive a liquid receipt token (like stETH for Ethereum) that you can use in other DeFi applications while still earning staking rewards. More flexible, with some added smart contract risk.
Protocol staking. Some DeFi applications have their own staking mechanisms where you stake the protocol's native token to earn a share of protocol revenue. NTK staking (coming soon to NativePay) falls into this category.
The Risks
Staking isn't risk-free. Here's what to understand before you start:
Lock-up periods. Many staking protocols require you to lock your tokens for a set period, during which you can't sell. If the price drops while you're locked in, you can't exit.
Slashing. If a validator behaves badly (e.g., goes offline or double-signs), their staked tokens — and delegators' tokens — can be "slashed" (reduced) as a penalty.
Smart contract risk. Liquid staking and protocol staking involve smart contracts. Bugs in those contracts can lead to loss of funds.
Inflation dilution. Staking rewards are often paid in newly minted tokens. If more people stake, the reward per staker decreases. If token inflation outpaces your rewards, your real return could be negative.
Getting Started with Staking on NativePay
NativePay is building integrated staking directly into the app. You'll be able to stake NTK and earn rewards without leaving your wallet — no separate apps, no complex interfaces.
If you're on the waitlist, you'll be notified as soon as staking goes live. In the meantime, you can start getting familiar with your wallet, accumulate some NTK, and explore the DeFi ecosystem through other posts on this blog.
The best time to understand staking is before you need it. Now you do.