Staking Risks & Rewards

Staking isn't risk-free. Let's understand what you're signing up for.

The Rewards

Yield (%)

You earn a percentage return, typically paid in the same token you staked:

• Ethereum: ~4% APY
• Smaller chains: Higher APY but higher risk

Compound Growth

Most staking rewards can be restaked, creating compound interest over time.

The Risks

Lock-up Periods

Your tokens may be locked for days or weeks:

• Ethereum: ~days to unstake
• Some protocols: 21-day unbonding

Price Volatility

If the token drops 50%, your 10% yield doesn't help much. You're still down.

[[Slashing]] Risk

If your validator misbehaves, you might lose some staked funds. Choose reputable validators!

Smart Contract Risk

Liquid staking protocols (like Lido) have smart contract risk. Audits help but don't eliminate risk.

Is Staking Worth It?

✅ Great for: Long-term holders who believe in the project

❌ Bad for: Short-term traders who need liquidity

⚖️ The best stake is one you'd hold anyway. Don't stake just for yield if you don't believe in the token.