What is staking?

Proof of stake is the rule by which a blockchain decides who may add the next block. The Ethereum documentation calls it "a way to prove that validators have put something of value into the network that can be destroyed if they act dishonestly" (ethereum.org, August 31, 2026).

Mining and staking belong to two such rules. Ethereum ran on proof of work, the rule that Bitcoin miners follow, until 2022. The documentation gives the reasons for the switch: proof of stake "is more secure, less energy-intensive, and better for implementing new scaling solutions".

Staking works through a deposit and a piece of software. For staking on Ethereum, the documentation lists what a validator needs: "a user must deposit 32 ETH into the deposit contract and run three separate pieces of software: an execution client, a consensus client, and a validator client."

Time on Ethereum is divided into slots of 12 seconds and epochs of 32 slots. Validators propose blocks and vote on the blocks of others. A vote is called an attestation.

A holder with less than 32 ETH can join a pool or hand the operation to a provider. The signing keys are then "entrusted to someone else who could behave maliciously", as the Ethereum staking page puts it.

Staking rewards are the payments of the network to validators. On Ethereum they consist of rewards "for proposing blocks, including unburnt transaction fees, and attesting regularly to the state of the network" (ethereum.org, February 12, 2025).

Staking fees are the share that a provider keeps. The European Commission describes the split in its answer on staking services: the rewards "are then distributed between the service provider as consideration for their service" and the clients, "who are the ultimate owners of the crypto assets that are staked". This page names no reward rate.

Staking crypto is risky in the ways that FINMA lists in its Guidance 08/2023 of December 20, 2023.

The Ethereum documentation describes slashing: "part of the validator's stake is destroyed and the validator is forcibly removed from the network."

Staking services are offers in which an intermediary stakes the assets of clients for a fee. Staking crypto is legal in the EU. The European Commission answered the question on June 20, 2024: MiCA "does not therefore prohibit staking, and staking as such is not subject to specific requirements or licensing."

That sentence covers the holder who stakes alone. A provider holds the assets or the private keys of its clients, so the service "is ancillary to custody services which are fully covered under MiCA". The provider needs the authorization for custody under Article 75 of MiCA and is liable for losses that are attributable to it.

In Germany and Austria MiCA applies directly. BaFin is the competent authority in Germany under section 3 of the Kryptomärkteaufsichtsgesetz (KMAG) of December 27, 2024. BaFin's notice of January 3, 2025 adds that a custodian that moves client tokens to a staking contract may also provide a transfer service.

In Frankfurt, Crypto Finance (Deutschland) GmbH, a Deutsche Börse Group company with a MiCA license since January 2025, launched a staking service for Ethereum and Solana on October 15, 2025 (Crypto Finance, October 15, 2025).

In Austria the FMA is the competent authority under the MiCA-Verordnung-Vollzugsgesetz. A bank or asset manager in either country that stakes client assets holds keys for clients and falls under the custody rules of Article 75: a written agreement, a custody policy, a register of positions and segregated holdings.

Switzerland is outside the EU, so MiCA does not apply there. FINMA states in Guidance 08/2023 that assets staked on the custodian's own account cannot be segregated in a bankruptcy. For staking on behalf of clients, FINMA does not require banks to hold capital for the staked assets if five conditions are met. Two of them: the client has given a specific instruction, and the validator address can be allocated to the client. This page gives no legal advice.