Staking
Locking up tokens to participate in network consensus or earn protocol rewards.
In the narrow technical sense, staking means depositing tokens as collateral to run a validator in a Proof of Stake network, earning rewards for participating honestly in consensus. In common usage, it refers more broadly to any mechanism of locking tokens to earn yield — whether in PoS validation, DeFi protocols, or governance systems.
Liquid staking protocols (Lido, Rocket Pool) solve the illiquidity problem of native staking by issuing a liquid receipt token (stETH, rETH) that represents the staked position. These tokens can be used in DeFi while still earning staking rewards.
Staking yields depend on network inflation (newly minted rewards), transaction fee volume, and the proportion of total supply staked. As more tokens are staked, individual validator rewards decrease — an equilibrium mechanism.