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Glossar · Crypto
Staking
The process by which holders of certain cryptocurrencies (typically proof-of-stake coins such as Ethereum or Solana) commit their holdings to validate blockchain transactions and receive a reward in return.
What staking actually is
Staking means locking up cryptocurrency on a blockchain to support its consensus mechanism. In exchange, stakers earn an ongoing payout in the same cryptocurrency — comparable to interest on a savings deposit. Staking is only possible on chains that use proof-of-stake (PoS) consensus. The best-known examples are Ethereum (since the 2022 "Merge"), Solana, Cardano and Polkadot.
Staking differs fundamentally from compute-heavy mining (proof-of-work, as in Bitcoin): rather than relying on hardware muscle, network security is negotiated through capitalised voting rights. The more coins a participant pledges, the higher the probability of being selected to validate a block — and therefore to earn the rewards.
Types of staking
In practice, retail investors have several routes into staking:
- Solo staking: the user runs their own validator node. On Ethereum this requires a minimum of 32 ETH. Maximum control, technically demanding.
- Liquid staking: providers such as Lido or Rocket Pool issue a derivative token (e.g. stETH) against the deposited coins. The derivative remains tradable while the underlying coins stay staked.
- Custodial staking: an exchange or broker (Bitpanda, Kraken, Coinbase) runs the staking operation for the user in exchange for a cut of the rewards. Convenient, but introduces platform risk.
- Staking pools: multiple investors bundle small amounts to operate a validator jointly.
Typical yields range from 3% to 8% per year depending on the coin — with the price volatility of the underlying obviously far above that of classic bonds. Three things can go wrong in practice: slashing penalties if the validator misbehaves, smart-contract risk with liquid staking, and platform risk with custodial solutions.
A typical scenario
An investor holds 10 ETH (assumed price: €3,000 per ETH, or €30,000 in market value) in a Bitpanda wallet and activates the integrated staking product with a quoted gross rate of 4% per year. After the platform fee she earns around 3.2% net — roughly 0.32 ETH per year, worth about €960 at the current price.
In Austria, staking rewards have been subject to KESt at 27.5% since the 2022 crypto tax reform. The bank usually remits the tax automatically. An important detail: the taxable event is the moment rewards are credited (valued in euros at that point), not the later sale.