What Is Staking? How Much It Pays and Whether It's Worth It
Staking is a way to put the coins you already hold to work and earn more coins in return. It sounds like earning interest on a savings account, but the mechanics and the risks are very different. This beginner guide explains what staking is, how much it pays, and what to watch out for before you commit.
What is staking (without the jargon)
Some blockchains, such as Ethereum or Cardano, use a system called Proof-of-Staketo confirm transactions and keep the network secure. Instead of power-hungry mining machines like Bitcoin, this system lets coin holders “lock up” their own coins to help back the network.
When you stake your coins, you are helping the network run, and the network pays you back with extra coins. In plain terms: you lock up your coins to support the system, and you earn a reward for it.
How much does it pay — APR vs APY
Staking rewards are usually quoted as a yearly percentage, but there are two versions you need to tell apart:
- APR is the yearly return without compounding — if you keep withdrawing your rewards, this is roughly what you actually get.
- APY is the yearly return with compounding — it includes the effect of re-staking the rewards you earn, so it comes out a bit higher than APR.
Rates vary a lot by coin, but most sit in the single-digit to low-double-digit percent range per year. If a platform advertises an unusually high yield — tens or hundreds of percent — treat it as a red flag, not an opportunity. Want to see what a given stake might earn? Try our staking calculator.
Risks beginners often overlook
- Lock-up / unbonding periods— many networks force you to wait several days before you can withdraw your coins. If the market drops during that window, you can’t sell in time.
- The coin’s price can fall more than the yield— earning 8% a year means nothing if the coin’s price drops 40%. The reward does not protect you from price moves.
- Platform / counterparty risk— if you stake through an exchange or third-party platform, you are trusting them not to fail or run off with your funds, which sit in someone else’s hands.
- Slashing — some networks impose penalties. If the validator you staked with breaks the rules, part of your coins can be cut and lost.
The tax point Thai users must know
Thailand’s 2025–2029 personal income tax exemption applies only to capital gains from selling through an exchange licensed in Thailand.
But staking rewards are not covered by the exemption— they count as ordinary income and are taxed at the normal rate. Don’t assume staking is tax-free. For the full picture on crypto tax, read our Thailand crypto tax 2025 guide.
Frequently asked questions
›How is staking different from earning bank interest?
A bank deposit is protected and your principal is baht with a stable value. With staking your principal is a coin whose price can swing hard, and your rewards can be wiped out by a falling coin price, so it is far riskier.
›Are staking rewards taxable?
Yes. Staking rewards count as ordinary income and are taxable. They are not covered by the 2025–2029 exemption, which only applies to capital gains from selling through a licensed exchange.
›Is a high yield like 50% a year worth chasing?
Be very careful. Normal staking yields sit in the single-digit to low-double-digit range per year. Unusually high numbers usually hide extra risk or may be an outright scam.
Ready to start for real?
For beginners in Thailand, Binance TH is a sensible first pick — crypto pairs at just 0.10% (the cheapest here), Thai SEC licensed, and free THB deposits via PromptPay QR.
*Affiliate link — we may earn a commission if you sign up through it, at no extra cost to you. Not investment advice.
⚠️ This article is for education only, not investment or tax advice. Yields and rules change — check current terms and consult a tax professional before deciding. Only invest what you can afford to lose.