Staking is the act of locking tokens to help the network’s functionality and create the next ‘block' in return for rewards. You can stake in multiple places; exchanges, and special staking platforms among other options. It is a method of passive income as it doesn’t require active trading. Various platforms will offer a higher percentage return for stakers, but it is important to take into account the volatility and future of the coin you’re staking.

The more coins that you stake, the more likely you are to be chosen as the next ‘validator’; where you are responsible for creating the new block and therefore receive greater rewards. Stakers are really ‘lending’ their coins to the network to help maintain security and verify transactions - this is why we are seeing new cryptocurrencies emerge that work solely on Proof of Stake (PoS) models as it offers an alternative method of driving a network’s functionality to Proof of Work (PoW) systems.

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Essentially, PoS blockchains require the staking of tokens to help the blockchain process transactions securely and in a decentralised manner; this is why stakers are rewarded for locking their tokens for an agreed period of time. It makes use of multiple nodes which increases the security and decentralisation aspect, and staking consensus mechanisms are widely thought to be the standard model for altcoins in future. It is a useful means of creating passive income, but doesn’t come without its own risks so tread carefully with where you stake, and your coin of choice.