The crypto world is full of terms that often sound similar but have different meanings — and staking and delegating are two such terms. Many investors use them interchangeably, but are they really the same thing?
In this guide from MyScaleIn, we’ll break down what staking and delegating actually mean, how they work, and how you can benefit from them. Whether you’re new to crypto or an experienced holder looking to earn passive income, this article will help you understand the core difference between these two earning methods.
What Is Crypto Staking?
Crypto staking is the process of locking up your cryptocurrency in a blockchain network to help validate transactions and maintain security. In return, you earn rewards — similar to earning interest on money in a savings account.
When you stake crypto, you are contributing to the proof-of-stake (PoS) consensus mechanism, which replaces the energy-intensive proof-of-work (PoW) model used by Bitcoin. Here’s how it works:
- You lock your coins in a staking wallet.
- The network uses your staked coins to verify new transactions.
- In return, you receive staking rewards (in the same token).
For example, if you stake 100 ADA (Cardano), you might earn 5–10% annually as staking rewards, depending on the network’s policies.
How Does Staking Work in Blockchain Networks?
When you stake, your crypto isn’t just sitting idle. It’s actively used by the network to secure and validate transactions.
Here’s the step-by-step process:
- You choose a blockchain that supports staking (like Cardano, Solana, or Ethereum 2.0).
- You stake your tokens through a wallet or exchange platform.
- The network randomly selects validators (based on stake amount) to create new blocks.
- Validators earn transaction fees and block rewards, which are then distributed to participants.
What Is Crypto Delegation?
Delegating is a form of staking, but with a key difference — you delegate your staking power to another person or entity (a validator) instead of running your own validator node.
In simpler terms, you’re allowing someone else to do the technical work for you while you still earn rewards.
Here’s how it works:
- You keep ownership of your crypto (you’re not sending it away).
- You delegate your voting power or stake to a validator.
- The validator uses your delegated tokens to help validate blocks.
- You receive a share of the rewards generated.
The Relationship Between Staking and Delegating
Staking and delegating are closely related — in fact, delegation is a simplified way to participate in staking.
- Staking involves locking your own crypto directly to secure the network.
- Delegating means giving your staking power to a validator who does the work for you.
So, while all delegation is staking, not all staking involves delegation. Both methods support the blockchain ecosystem and reward participants with passive income.
The Role of Validators and Delegators
Validators are the backbone of PoS networks. They maintain the blockchain by verifying transactions and proposing new blocks. Delegators, on the other hand, support validators by lending them their staking power.
Here’s how the relationship works:
- Validators ensure uptime, accuracy, and security.
- Delegators trust validators with their voting power.
- Both parties earn rewards based on the validator’s performance.
How Delegated Proof of Stake (DPoS) Works
The Delegated Proof of Stake (DPoS) system is an advanced form of PoS. Instead of everyone validating transactions, token holders vote for a small group of trusted validators to represent them.
Here’s how DPoS differs:
- Token holders vote by delegating their tokens.
- The top validators are chosen to validate transactions.
- Validators share rewards with their delegators.
Popular DPoS blockchains include EOS, Tron, and Tezos. This system is faster and more efficient, but it can be more centralized compared to traditional PoS.
Benefits of Staking Your Crypto
Staking provides multiple benefits beyond just earning rewards:
- Passive income: Earn steady returns while holding your crypto.
- Network security: Your participation helps secure and decentralize the network.
- Long-term growth: Encourages holding rather than frequent trading.
- Eco-friendly: Uses far less energy than mining.
Risks Involved in Staking
Although staking sounds risk-free, there are several potential downsides:
- Lock-up periods – Your funds may be locked for weeks or months.
- Slashing risks – Misbehaving validators can cause part of your stake to be penalized.
- Market volatility – Token value can drop while you’re staked.
- Validator performance – If your validator is unreliable, your rewards may decrease.
Pros and Cons of Delegating Crypto
Like staking, delegation also comes with advantages and disadvantages.
Pros:
- No need for technical setup.
- Lower entry barrier for beginners.
- Continuous rewards with minimal management.
Cons:
- You rely on the validator’s honesty and performance.
- Rewards are shared, reducing your overall profit.
- You may face penalties if your chosen validator gets slashed.
How to Start Staking and Delegating Safely
Starting is easier than you think. Follow these steps:
- Choose a blockchain that supports staking (like Solana, Ethereum, or Cardano).
- Pick a wallet or exchange that allows staking or delegation.
- Research validators before delegating.
- Decide how much to stake. Don’t risk all your assets at once.
- Monitor your rewards and adjust your delegation if needed.
Safety tip: Always use official wallets or trusted exchanges to avoid scams.
Popular Cryptocurrencies That Support Staking and Delegation
Here are some top coins that support both staking and delegation:
- Cardano (ADA)
- Solana (SOL)
- Polkadot (DOT)
- Cosmos (ATOM)
- Tezos (XTZ)
- Avalanche (AVAX)
Common Misconceptions About Staking vs Delegating
- Myth 1: Delegating means giving away your coins — False! You retain full ownership.
- Myth 2: Staking is only for experts — Wrong! Many platforms make it beginner-friendly.
- Myth 3: Rewards are guaranteed — Not always! They depend on validator performance and network activity.
- Myth 4: Delegation is less profitable — Sometimes true, but it’s safer and easier for most users.
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Conclusion
So, is staking and delegating crypto the same thing? Not exactly. Staking means locking your coins directly into a blockchain network, while delegation is the process of assigning that responsibility to someone else (a validator).
Both help secure the network and earn you rewards, but the choice depends on your comfort level, technical knowledge, and risk tolerance.
For most beginners, delegation offers a simpler entry point into staking — giving you passive income without technical complexity.
FAQs
1. Do I lose control of my crypto when delegating?
No, you keep full ownership of your crypto — you’re only delegating your staking power.
2. Which is more profitable: staking or delegating?
Running your own validator can be more profitable, but delegation offers convenience with minimal effort.
3. Can I unstake or undelegate anytime?
Most networks allow you to undelegate, but there may be a short “cooling-off” or unbonding period.
4. Is staking safe?
Generally yes, but you should always research validators and be aware of slashing risks.
5. Which is better for beginners?
Delegation is usually better for beginners since it requires no technical setup and has lower risks.