17.08.2026
What if cryptocurrencies could do more than simply sit in a portfolio waiting to increase in value? What if they could be actively utilized to generate returns? They can – and it’s called staking.
The cryptocurrency market is constantly developing new, innovative opportunities. One of these is crypto-staking. It allows investors to use their cryptocurrencies to take advantage of potential returns opportunities. Similar to fixed-term deposits, there are fixed terms and regular payouts.
Crypto staking generally makes it possible to earn a passive income with cryptocurrencies. The holder’s coins are “used” in a blockchain network to support the network. In return, holders receive rewards in the form of additional coins. During staking, the coins used are blocked and cannot be sold. Let’s go through this process step by step.
During staking, cryptocurrencies are stored on the network for a certain period of time in a smart contract . During this time, they are locked and cannot be sold. These locked assets support the blockchain infrastructure by enabling the validators, i.e. the participants in the cryptocurrency network (nodes), to verify transactions and add new blocks to the blockchain. These validators are the backbone of the network and ensure its stability and security.
As a reward for this support, investors receive staking rewards, which are paid out in the form of the respective cryptocurrency – for example, in Ether (ETH) for the Ethereum blockchain. The amount of the reward is expressed as an annual percentage yield (APY) – a percentage paid on the staking amount per year.
A blockchain requires a consensus mechanism to operate reliably. This ensures that all participants in the network (nodes) agree on which transactions are valid and added to the blockchain. In short, the consensus mechanism defines the “rules of the game” for how the blockchain works. Without it, different versions of the blockchain might be created that would make the system insecure and unreliable.
There are different consensus mechanisms. One of the best known is the proof of stake (PoS), on which the staking is based. Bitcoin, the best-known cryptocurrency, uses proof of work and therefore does not offer staking. Ethereum, the second-largest cryptocurrency, uses proof of stake.
Staking is only possible with PoS protocols. With many PoS blockchains, validators must deposit a minimum amount of the respective cryptocurrency as collateral on the blockchain in order to be allowed to participate in the network.
The validators are selected according to the respective rules of the PoS protocol in order to check transactions. To become a validator, you have to deposit a certain amount of cryptocurrency as a stake – in the case of Ethereum, this would be 32 ether (ETH). During this time, the coins are locked and cannot be sold.
The rewards for providing cryptocurrencies are called staking rewards. These are automatically paid out to the participants via the blockchain.
Staking ensures that validators in the blockchain network properly confirm transactions. The stake serves as a deposit. If validators break the rules or cheat, they may lose part or even all of their stake – this is called “slashing”.
This mechanism ensures that validators act in the best interests of the network, making the blockchain more secure and stable. Staking is based on an incentive system. Validators have a financial interest in the success of the network and are motivated to act honestly and follow the rules. This creates a secure and efficient network that consumes less energy than other consensus mechanisms such as Proof of Work mining.
The most convenient and easiest way is to do staking through a provider such as a crypto broker or a bank that offers staking services. In this case, brokers or banks take over the technical requirements and validator operations on behalf of the investors. Validators only need to deposit their cryptocurrencies on the platform and the provider takes care of the rest. In addition to this simple approach, there are the following options for participating in staking:
Cryptocurrencies can be staked directly via a supported wallet. A certain amount of coins is locked in order to participate in the network and receive staking rewards.
Capital from multiple individuals is combined in a staking pool, allowing them to stake collectively. This means that smaller amounts can also be used and the rewards are distributed proportionately.
With some blockchains, it is possible to delegate coins to a validator, who takes over the staking. A portion of the staking rewards is paid out for this.
Specialized service providers offer staking as a service. Coins are transferred to these service providers, who carry out the staking and pass on the rewards.
Staking is an attractive way to make cryptocurrencies work efficiently and generate additional income.
Staking gives investors the opportunity to participate in the network with their cryptocurrency holdings and receive staking rewards in return. This creates a new form of passive income.
Long-term investors can reinvest their staking income and benefit from compound interest. The future returns are based on the original capital plus the returns already realized – this means that the assets grow exponentially (assuming that the other parameters such as the annual percentage yield remain unchanged).
Investors participate in the operation of the blockchain network through staking. The “stakers” have a vested interest in the success of the network, which promotes decentralization – a central feature of public blockchains.
Stakers can participate in the governance of a network, such as voting on protocol updates and network rules. Participation gives them a voice in the ongoing development of the network and contributes to the “democratization” of the blockchain.
Although staking offers the opportunity to generate passive income, it also harbours risks that should be taken into account:
The return that can be achieved through staking is indicated by the annual percentage yield (APY). This key figure shows the annual percentage return and takes into account the compound interest effect. The portal “The Staking Explorer” provides an overview of all APYs and cryptocurrencies that permit staking.
The APYs for staking are often higher than the returns from traditional interest income. This is due to the high volatility and the associated risk of cryptocurrencies. In addition, some blockchain projects offer high rewards to attract more participants and strengthen network security.
A high APY can be tempting, but beware: promises of unrealistically high returns can indicate unsustainable models or even fraudulent intentions. Therefore, in addition to the APY, other factors such as the credibility of the project and potential risks should also be closely scrutinized.
In recent years, numerous cryptocurrencies have established themselves in the staking sector. The best known is Ethereum, the number two cryptocurrency. Other networks include: Tron (TRX), Tezos (XTZ), Cosmos (ATOM), Polygon (MATIC), Near Protocol (NEAR), Cardano (ADA), Solana (SOL) and Polkadot (DOT).
It is important to observe the lock-in periods and minimum stake requirements. During the lock-in period, the deposited cryptocurrencies remain exposed to market volatility and cannot be sold.
If you want to carry out staking independently, you need to be familiar with the technical details. As there is no standardization, you must carefully check the conditions for each provider.
Investors who invest via banks or brokers have it easier, as these providers often offer user-friendly solutions and handle the technical details. It is important to choose a trustworthy partner that is transparent about the conditions and costs.
If you want to invest your crypto assets for the longer term, staking gives you the opportunity to generate additional income. When these additional earnings are converted back into the corresponding cryptocurrency, investors benefit from the compound interest effect.
The income generated from staking is subject to tax and must be taxed as income. The staked assets must be declared for wealth tax purposes.
To create an appropriate service for PostFinance customers, we have rethought the concept of staking. Customers have the option of investing twice a week in a staking product with an amount in Ethereum (ETH).
There is no fixed term to the offer – customers can decide flexibly when they want to terminate their staking position. Staking rewards are automatically added to the existing staking position, so customers benefit from a compound interest effect without the need for manual intervention. The service is available via e-finance and the PostFinance App.
PostFinance is initially offering staking exclusively for Ethereum (ETH). PostFinance handles all technical aspects, while customers benefit from attractive staking rewards while simultaneously contributing to the security of blockchain networks.
The development focused on three main attributes:
