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June 14, 2026
The Dispatch

Definition

Staking

Staking is locking up crypto in a proof-of-stake network to help validate transactions and, in return, earn rewards; it carries lock-up and slashing risks. This is informational, not advice.

In staking, holders commit (lock) their tokens to support a proof-of-stake blockchain's security and operation, and earn rewards roughly proportional to the amount and duration staked. It is the energy-efficient alternative to mining.

Staking carries risks: funds may be locked for a period, validator misbehaviour can lead to slashing (loss of part of the stake), and token prices remain volatile. 'Staking yields' are not guaranteed and can be eroded by price falls.

In India, staking rewards involve VDAs and the strict 30% tax/1% TDS regime can apply on transfers. This entry is informational only, not investment advice; treat staking as high-risk.

Related terms

  • DeFiDecentralised Finance refers to financial services — lending, trading, yield — run by smart contracts on blockchains without traditional intermediaries. This is high-risk and informational, not advice.
  • Mining (Crypto)Crypto mining is the process by which some blockchains validate transactions and create new coins through computational work, rewarding participants who solve cryptographic puzzles. This is informational.
  • AirdropAn airdrop is a distribution of free crypto tokens to wallet holders, often to promote a project or reward early users; received tokens can have tax implications in India. This is informational.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.