Staking is a way of earning interest on your cryptocurrency by depositing it for a fixed period of time.
Staking works in a similar way to interest accounts with traditional banks.
Traditional banks pay interest because the bank uses your funds for things like loans and other investments. In staking, your cryptocurrency is put to use as well. The term staking refers to the Proof of Stake or “PoS” protocol, in which deposited coins are used to verify transactions on the blockchain.
Verified transactions become new blocks on the blockchain. For cryptocurrencies that support staking, proof of stake is necessary for that process. Whoever participates in successfully creating a new block is rewarded.