Crypto Staking

Bitcoin's blockchain relies on proof of work, where computers compete to solve a puzzle using electricity, and the winner adds the next block. Proof of stake replaces that competition with a deposit: a validator locks up a set amount of the blockchain's own token, and the network selects validators to confirm transactions in proportion to how much they have staked. Ethereum completed its move from proof of work to proof of stake in September 2022, a change known as the Merge, and running a full validator on Ethereum requires locking up 32 ether. Ethereum's staked supply passed 39.6 million ether across more than 1.2 million validators by mid-2026, after the network absorbed over 4 million additional staked ether during the first half of that year.

A validator that confirms transactions correctly and stays online earns a steady reward, paid in the blockchain's own token. A validator that goes offline earns less for the time it was unavailable, and a validator caught acting dishonestly, such as confirming two conflicting versions of the same transaction, can be slashed: a portion of its staked funds is destroyed as a penalty. This penalty structure is what gives proof of stake its security: cheating a proof-of-stake blockchain costs the attacker their own staked capital, not just electricity.

Running a full Ethereum validator needs 32 ether and technical infrastructure that stays online continuously, out of reach for most individual holders. Liquid staking protocols such as Lido pool smaller deposits together, run the validators on depositors' behalf, and issue a token, such as Lido's stETH, that represents the staked position and can be traded or used elsewhere in DeFi while the underlying ether keeps earning rewards. Lido holds the largest share of the liquid staking market, with roughly 8.9 million ether under management as of 2026, more than 60 percent of all liquid-staked ether. In 2026 Lido began consolidating its validators into fewer, larger operations, a change worth an estimated 16 billion US dollars in staked value, aimed at reducing the operational overhead of running so many separate validators.

A staker who runs their own validator risks slashing if their setup goes offline or misbehaves, even by accident through a software bug. A staker who uses a liquid staking protocol or a centralized exchange's staking service instead trusts that provider's own operational security and smart contract code, and Lido's dominant market share has drawn scrutiny over how much of Ethereum's validator set a single protocol should represent. Unstaking also is not always instant: depending on the protocol and the blockchain's own rules, withdrawing staked funds can take from minutes to several days.

Crypto Finance (Deutschland), a Deutsche Börse Group company, launched a staking service for Ethereum and Solana in Frankfurt in 2025, a development Finance Loop covered on its crypto in Frankfurt page. Finance Loop supported the Bybit EU Crypto Evening at TechQuartier on crypto compliance topics. Crypto staking sits in Finance Loop's Investment & Digital Assets track. Related pages: DeFi lending, crypto in Frankfurt and institutional crypto.

Crypto staking means locking up a blockchain's own token to help validate transactions on a proof-of-stake network. A staker earns rewards for validating correctly and can lose part of their stake through slashing if they act dishonestly or go offline for too long.

Staking carries risk: a validator can be slashed for downtime or misbehavior, a liquid staking protocol's smart contract can contain a bug, and unstaking is not always instant. It differs from a bank deposit, which carries statutory deposit insurance in Germany up to 100,000 euros per person.

Liquid staking lets a holder stake crypto through a protocol that pools deposits and runs the validators, in exchange for a token that represents the staked position and can still be traded or used in DeFi while the original stake keeps earning rewards.