Crypto staking explained for US investors

Staking lets you earn rewards for helping secure a proof-of-stake blockchain such as Ethereum, Solana or Cardano. Your coins are committed to validators that confirm transactions, and the network pays new coins as a reward.

Where the rewards come from

Proof-of-stake networks pay validators with newly issued coins and a share of transaction fees. The rate depends on the network and on how much of the coin is already staked. Ethereum's staking rate has generally been a few percent a year. Rates change constantly, so treat any quoted figure as an estimate.

Because rewards are partly newly created coins, staking mostly keeps your share of the network from being diluted. It isn't the same as interest on a savings account.

Ways to stake

• On an exchange: the simplest option. The exchange runs the validators and keeps a commission: up to 35% at Coinbase and Gemini, 25% at Robinhood.
• Delegating from your own wallet: on networks like Cardano and Solana, you can delegate to a validator while keeping your keys.
• Liquid staking tokens: you receive a token representing your staked coins that you can trade. This adds smart-contract risk.
• Running your own validator: technical and, on Ethereum, requires 32 ETH.

State restrictions

Exchange staking isn't available everywhere. Coinbase doesn't offer it in California, Maryland, New Jersey or Wisconsin, and Kraken limits it to a list of states. Check our exchange comparison with the "Staking in my state" filter.

Risks

• Price risk: rewards of 3% don't help if the coin falls 30%.
• Lock-ups: unstaking can take days or weeks on some networks, and you can't sell during that time.
• Slashing: validators that misbehave or go offline can lose part of the stake. Exchanges usually absorb this, but check their terms.
• Platform risk: staking through a company adds that company's risk.

Taxes

Under IRS Revenue Ruling 2023-14, staking rewards are ordinary income when you gain control of them, valued at the market price that day. That value becomes your cost basis. When you later sell those coins, you owe capital gains tax on any rise after you received them, or have a loss if they fell.

Frequent small rewards create many small tax lots, so good records, or crypto tax software, help a lot. Bills to delay taxing rewards until they're sold have been introduced but not passed as of October 2026.

Estimate your rewards

The staking calculator subtracts the platform's commission, applies compounding and estimates the income tax due.