Staking is a consensus mechanism used in some blockchain networks to validate transactions and secure the network. Unlike mining, which involves solving complex mathematical problems to validate transactions, staking requires users to hold and lock up a certain amount of cryptocurrency in a wallet to participate in the validation process.
In a staking network, users are incentivized to participate by earning rewards in the form of newly minted coins or transaction fees. The more cryptocurrency a user holds and stakes, the greater their potential rewards and the more influence they have over the network.
Staking is considered to be more energy-efficient than mining and can also be less expensive, as it does not require specialized hardware. However, staking requires users to hold and lock up their funds for a certain period of time, which can limit their liquidity and ability to access their funds.
Overall, staking is a way for users to earn rewards for supporting the network and help maintain its security, but it’s important to understand the trade-offs and risks involved before committing to staking.