What is staking in crypto?

If you’ve been holding crypto for a while, you’ve probably had that thought at least once: could this be doing something instead of just sitting there?

That’s where staking comes in.

At its core, staking is a way to earn rewards by supporting the network behind your crypto. Instead of relying on energy-heavy mining (like Bitcoin does), many modern blockchains use something called Proof-of-Stake (PoS).

You’re not competing with powerful machines — you’re simply committing your tokens to support the system. And in return, the network rewards you.

People often compare staking to earning interest, but it’s not quite the same. You’re not handing your funds to a bank. You’re participating in how a decentralized network operates.

The best part? It’s not complicated. You don’t need special hardware or technical skills. Staking can be done directly inside a non-custodial wallet like NOW Wallet, where you stay in control of your private keys while earning rewards on assets like BNB, NOW, TRX, ATOM, SOL, XTZ, and ADA (Shelley).

So let’s take a closer look at how staking actually works — and why it’s become such a core part of modern crypto.

How does staking work?

Staking allows you to allocate supported tokens within the wallet and receive rewards according to the staking terms of that asset.

The process is straightforward:

1. You choose a supported asset.

2. You decide how much you want to stake.

3. Your tokens are locked according to the staking conditions.

4. Rewards are distributed based on the program rules.

From the user’s perspective, staking simply means committing tokens for a period of time and receiving rewards in return.

What happens behind the scenes?

When you stake, your tokens are allocated on-chain according to the staking mechanism of that asset. The system tracks:

• The amount staked

• The duration (if applicable)

• Reward calculations

• Distribution schedule

Rewards are calculated based on predefined parameters, which may include the total amount participating in staking and the structure of the reward pool.

Unlike mining, there’s no need for powerful computers or rising electricity bills. If your wallet supports onchain staking, you’re already equipped to participate.

Tip: If you are still unsure what the difference between mining and staking is, explore this simple explanation.

What is onchain staking?

Onchain staking means your tokens remain fully under your control while being delegated to the blockchain’s staking mechanism. Even if you're staking a non-native token, your assets are not handed over to a centralized platform. Instead, they are locked in a smart contract that interacts with the staking protocol.

Your funds:

• Are locked in a smart contract
• Are not transferred to a centralized platform
• Remain verifiable and traceable on the blockchain

This is different from custodial staking, where you deposit assets into an exchange.

The recent launch of onchain NOW Staking follows this same principle: your NOW tokens remain under your control while participating directly in the staking mechanism of the ecosystem.

Tip: If you’d like a step-by-step walkthrough, check out our detailed staking guide.

Why do people stake crypto?

Staking aligns incentives between token holders and the network itself. There are three main reasons:

• Earn passive rewards
  Staking allows you to earn additional tokens over time.

• Support network security
  Stakers help secure and decentralize blockchain networks.

• Participate in governance
  Some networks allow stakers to vote on protocol upgrades and proposals.

What are staking rewards?

Staking rewards are the incentives you earn for participating in a blockchain’s proof-of-stake network. These rewards are typically paid out in the native token of the blockchain you are supporting.

For example:

• Stake SOL → earn SOL

• Stake ADA → earn ADA

• Stake BNB → earn BNB

This means that as you stake, your holdings in that specific asset grow over time, compounding your potential returns.

What Determines the Reward Rate?

Staking isn’t a fixed-income product, and the yield isn’t guaranteed. The percentage you earn can move up or down depending on what’s happening in the network.

Here’s what usually affects it:

• Network rules
  Every blockchain has its own economic model. Some adjust rewards dynamically, others follow a predefined emission schedule. That directly impacts how much is distributed to stakers.

• Validator performance
  If you’re delegating to a validator, their reliability matters. An offline or poorly configured validator can reduce your rewards. And on certain networks, malicious behavior can trigger penalties (often called slashing).

• How many tokens are staked overall
  Rewards are often shared across all participants. If a large portion of the total supply is already staked, the reward per token may decrease. If participation drops, yields may increase.

• Inflation schedule
  Some networks start with higher rewards to encourage early participation, then gradually lower them as the ecosystem matures.

In short, staking rewards depend on network economics — not a fixed interest rate. It’s always worth checking current conditions before committing your tokens.

Staking vs. Holding: what’s the difference?

Holding is passive — your tokens just sit there.

Staking is active — your tokens help power the network.

And if you were going to hold that asset long term anyway, staking can be a natural next step.

Final thoughts

Staking isn’t complicated. It’s simply a way to participate in how modern blockchains operate — and to earn rewards while doing it.

With support for BNB, TRX, ATOM, SOL, XTZ, and ADA — plus the launch of onchain NOW Staking — NOW Wallet makes it possible to stake directly from a non-custodial environment where you remain in control.

No exchanges.
No extra software.
No surrendering your private keys.

Just straightforward, onchain participation.

If you’re ready to put your crypto to work, follow our full staking guide and get started.

FAQ

Can staking rewards change?

Yes. Reward rates fluctuate depending on network participation, validator performance, and protocol rules.

Is there a minimum amount required?

It depends on the blockchain. Some networks allow small delegated amounts, others set higher thresholds.

Can I unstake anytime?

Most networks allow unstaking, but many include an unbonding period before funds become fully available.

Do I lose wallet ownership when staking?

Not with non-custodial, onchain staking. You retain control of your private keys.

How often are rewards paid?

It varies. Some networks distribute rewards every epoch, others continuously.

Is staking truly passive income?

It can generate ongoing rewards, but returns aren’t guaranteed. They depend on both network conditions and market prices.

What if a validator underperforms?

Rewards may decrease if a validator performs poorly. On some networks, slashing can occur — meaning a small portion of staked funds may be penalized if a validator breaks protocol rules. The exact risk depends on the blockchain.