stakedtoken

Stakedtoken refers to a unit of a blockchain token that has been locked in a staking process to support network security, operation, or governance. In many proof-of-stake networks, staking involves committing tokens to validators or staking contracts so the network can reach consensus and function reliably. Staked tokens typically earn rewards over time, with the amount of reward usually related to the size of the stake and the network’s overall conditions. In some networks, stakers gain governance rights proportional to their staked position.

The staking process generally involves locking tokens for a period during which they cannot be freely transferred. Users may stake directly by running a validator node or indirectly by delegating to validators or through staking services. Rewards are distributed periodically according to the stake and the protocol’s rules. If a validator misbehaves or underperforms, staked tokens may be subject to slashing, a penalty that reduces the stake as a reliability incentive. Unstaking or unbonding typically requires a waiting period before tokens become available again.

There are several models of stakedtoken usage. Non-custodial staking keeps control with the token holder, who either runs a validator or delegates to one. Custodial staking involves a third party, such as an exchange, handling the staking on behalf of the user. Liquid staking supplies a liquid representation of the staked position, allowing the holder to use a derivative token while the underlying stake remains locked.

Risks to consider include price volatility, liquidity constraints during unstaking, validator performance, and potential centralization if a small number of validators accumulate large shares of staked tokens. Examples of networks using staking include Ethereum, Cardano, Solana, and Polkadot.