What is staking

Staking is how a proof-of-stake chain picks who gets to add the next block. The holder locks coins, called a stake. The protocol uses that stake as a weight. A larger stake is more likely to be chosen, alone or through a validator the holder delegates to. The payment is new coins, fees, or both. The lock is the cost. The coins are not available to sell until the unbonding period ends.

Bitcoin does not work this way. Bitcoin miners spend electricity to win a block. Ethereum switched its block production to staking. A person who wants to take part posts ETH, or gives it to a service that posts it, and waits if they want it back. Solana pays validators who stake SOL, and it is the chain this desk covered when the slot time was cut to 200 milliseconds. The slot change is a timing change. It is not a change to the staking rules. That story is here: https://cryptokeymedia.com/news/solana-200ms-slots

Delegating is not the same as running the machine. A delegator points coins at a validator and takes a share of what that validator earns, after the validator's cut. The delegator does not keep the server online. The validator does. If the validator misbehaves in a way the protocol punishes, the delegated coins can be cut too. Picking a validator is part of the stake.

A liquid staking token is a receipt. The holder stakes, and receives a token that stands for the staked coins, so they can use the receipt somewhere else while the stake stays locked. stETH is the well-known Ethereum version. The receipt is not the same as the coins underneath. It can trade at a discount if people rush to sell the receipt faster than they can unstake. The discount is a market. The stake is still subject to the chain's exit queue.

An exchange earn product can wear the same name and be a different contract. The customer clicks stake, and the exchange stakes, lends, or does something else with the coins. The customer has a claim on the exchange. They do not have a delegation on the chain in their own name. The yield on the screen does not say which of the two they bought. The withdrawal rules do.

The yield is not a bank rate. It moves with fees, with how many people are staking, and with the new-coin schedule. A chain that pays a high rate by issuing a lot of new coins is diluting the holders who do not stake. The staker's gain and the non-staker's dilution are the same issuance. Quoting the rate without the inflation is half the number.

Unbonding is the part the advertisement skips. On some chains the wait is days. On some it is weeks. During the wait the price can move and the coins cannot be sold. A liquid staking receipt is one way around the wait, at the price of trusting the receipt's market. A native unstake is the way the protocol itself provides. The two exits should not be described as one button.

What comes next for a holder is the exit queue, not the headline rate. Staking is a lock, a validator, and a payment from the protocol. It is not a savings account, and it is not mining. The coins come back when the unbonding finishes, if the validator has not been penalized and the holder asked for them back.