Top 7 Mistakes to Avoid While Doing POS Staking

When the first cryptocurrencies appeared, earning from them was mainly associated with mining — expensive equipment, mining farms, and noisy graphic cards. Over time, however, the industry began looking for a more environmentally friendly and accessible way to support blockchain networks. This is how the Proof-of-Stake (PoS) model was born.

To put it very simply, PoS works almost like a bank deposit: you “hold” your cryptocurrency within the network, help it stay stable and secure — and the network rewards you with a percentage. But unlike a bank, your coins are not lying idle: they participate in securing the blockchain and validating transactions.

A true turning point happened in 2022, when the world’s second-largest cryptocurrency — Ethereum — switched to PoS. This event is known as The Merge. The transition became a milestone: it proved that PoS can replace energy-intensive mining and become a new financial norm for the crypto market. You can read more about this historical upgrade on the official Ethereum website: https://ethereum.org/en/upgrades/merge/

After this, dozens of blockchains began developing their own PoS models, and staking became one of the most popular passive income methods in crypto.

By 2025, the PoS ecosystem already had over $400 billion in assets, and the average staking yield ranged from 3% to 45% per year, depending on the coin, platform, and chosen strategy. You can verify these numbers on specialized analytics platforms, for example: • https://www.stakingrewards.com/ • https://defillama.com/

Source: stakingrewards.com

But there is one important nuance: despite how simple staking may seem, it is not a “get a percentage with no risk” button. Most beginners repeat the same mistakes and lose either a part of their yield or even their assets — simply because they don’t know the nuances related to fund lock-ups, inflation, validators, and security.

To avoid these traps, it is important to understand in advance how PoS works, what pitfalls it has, and what you should check before you “stake” your crypto.

Next, we will review the seven most common mistakes users make in 2025 — and show how to easily avoid each of them. If you know these rules, staking turns from a lottery into a clear strategy with predictable returns.

Mistake #1: Choosing Staking Only for a “High Percentage”

Many people think: if one project promises 80% per year and another only 5%, it’s obviously better to choose the first one. But in PoS, it’s the opposite: a very high APY is almost always a risk signal.

Here is what usually hides behind “high percentages”:

• Token inflation — the project issues many new coins to pay rewards, and the price falls. You can check token inflation on CoinGecko (section Max Supply): https://www.coingecko.com/

Source: coingecko.com

• Low liquidity. High APYs often appear in projects with few users, where the price is held up only by the promise of high returns. As soon as rewards start decreasing, people massively sell the token, causing a collapse that never recovers.
• Weak tokenomics and no real utility. If a token has no purpose other than “stake and earn a percentage,” that is not a business model — it’s a pyramid disguised as staking. A reliable token should have utility: paying fees, governance, access to services, supporting the ecosystem. You can check token utility in Token Utility and Use Cases sections of a project’s whitepaper.

In 2021–2023, dozens of PoS projects and DeFi platforms offered insane 200–500% APY. People jumped in for the returns, but a few months later the tokens of these projects collapsed by 90–99%. Investors received “a lot of tokens” — but they were worth almost nothing.

A notable case — projects inspired by the Olympus DAO (OHM) model, which promised “impossible” returns through so-called rebasing models.

The result: almost all such fork tokens crashed, and investors were left holding bags of worthless coins.

Easy to remember: For major networks, a normal APY is 4–12% per year. If you see 20%+, first examine the tokenomics, inflation, TVL, and utility of the token.

Mistake #2: Not Considering Coin Lock-Up and Withdrawal Time (Lock-Up & Unstaking)

Many beginners see the “Stake” button and immediately send all their coins there for 30–180 days. But then the market drops, the need to sell or rebalance appears — and funds cannot be withdrawn because they are “locked”.

Why is this important?

Staking almost always has a waiting period for withdrawals — from several hours to several weeks. This is called the Unstaking / Unbonding Period.

• If the coin is growing — you cannot quickly take profit;
• If it’s falling — you cannot sell in time;
• As a result, part of your yield is eaten by the waiting time.

For active traders, this delay can become a serious problem: the crypto market moves quickly.

If flexibility is important to you, consider liquid staking (LSD/LST). Unlike regular staking, where coins are locked for a period, liquid staking gives you a special token in exchange for staked coins. This token can be held, sold, used in DeFi, or exchanged back without waiting for unlocking.

For example:

• Lido allows staking Ethereum and receiving stETH — a token that increases in value through staking rewards and can be used as a regular asset.
• Rocket Pool — a decentralized staking option for ETH, where you receive rETH in return, and validators operate without centralized control.
• For Solana, there is Jito, which gives jitoSOL — a liquid staking token of SOL that can be freely used or sold.

Source: jito.network

Such solutions are suitable for those who do not want to “freeze” their capital for a long time and prefer to keep the ability to exit quickly or use assets on other platforms.

Mistake #3: Staking on Suspicious Platforms or with “Shady” Validators

When you send your coins to staking, you are essentially trusting them to a person/company who will validate transactions on your behalf. If you choose the wrong validator or a questionable service, you may lose part of your profit — or sometimes even all your funds.

What risks may occur?

• Platform hacks. Centralized services store your coins on their side. If they get hacked — your money disappears. There have already been such cases: for example, in 2021 the StakeHound service lost access to 38 000 ETH.
• Fraudulent validators.In networks like Cosmos, Avalanche, and Polkadot, fake validators appeared that collected deposits and vanished. Beginners often do not check who they stake with.
• Slashing (penalties).If a validator violates network rules or “goes down,” part of your coins may be deducted as a penalty. For example, in Ethereum you can track validator performance here: https://www.rated.network/

How to choose a safe place for staking (simple checklist)

Before pressing “Stake,” take 1 minute to verify:

1. Go to the official website of the project (for example, https://ethereum.org/ or https://cosmos.network/).
2. Open the Staking / Validators / Stake section — it usually contains a list of recommended validators.

Source: atomscan.com/validators

3. Check the following:

• Validator’s reputation and reviews (Google, social media, the project’s Discord/Telegram)
• Commission (usually 2–10% is normal, sometimes up to 20%)
• Uptime — stability of operation. It should be 99%+. To check, use for example: • Ethereum validators: https://www.rated.network/ • Cosmos validators: https://www.mintscan.io/

Mistake #4: Looking Only at the Percentage, Not the Real Profit

Many see a nice number like 20% annually for staking and immediately think: “Great, I’ll earn 20%!” But in reality, it’s not that straightforward.

Imagine the situation:

• You stake a coin at 20% per year
• But during the year, the project issues many new coins, causing the price to drop — this is inflation
• If the coin’s inflation is around 18%, then your actual profit is about 2%, not 20%

And if the token’s price also falls during the year — you may end up with a loss, even with a “beautiful percentage.”

It is important to understand: in some PoS projects, staking is needed not even to earn more, but simply not to lose your position, because more tokens appear and each holder’s share becomes diluted.

In other words: the high percentage you see on the screen is not always real profit. What matters is how much value remains in your hands after a year.

If you want to check whether staking brings real benefit, look not only at the percentage but also at what happens to the token: its supply, price, and “net yield.” You can see this, for example, on:

• CoinGecko (token supply and tokenomics in coin cards): https://www.coingecko.com/
• Messari (project analytics): https://messari.io/

Just remember: it’s not about what they “promise,” but about what remains with you after a year — considering inflation and price.

Mistake #5: Putting Everything Into One Coin or One Project

One of the most common mistakes beginners make is taking their entire budget and staking it all into one coin because it “seems reliable” or is “hyped right now.” In crypto, this is risky: even strong projects can face problems, outages, or price drops.

Main idea: never keep 100% in one project. It’s like betting everything on one horse.

To avoid worrying about a single asset, it’s easier to split your staking across several coins:

• The core of your portfolio (the most reliable part) is better placed in major networks that have existed for a long time and have proven their stability. For example:Ethereum (ETH) — https://ethereum.orgSolana (SOL) — https://solana.comCosmos/ATOM — https://cosmos.networkCardano (ADA) — https://cardano.orgAvalanche (AVAX) — https://avax.network
• A smaller portion can be kept in medium-sized projects — they are more promising but have higher risk. For example:Sui (SUI) — https://sui.ioAptos (APT) — https://aptosfoundation.orgSei (SEI) — https://www.sei.ioNear (NEAR) — https://near.org
• And only a small part should be allocated to experiments: new PoS projects, trends, or liquid staking.

If you are not sure which coins are considered more reliable, you can simply open any crypto aggregator and look at the list of PoS coins with the highest market capitalization. For example, on CoinMarketCap there is a convenient filter by consensus type, showing the largest PoS projects:

Source: coinmarketcap.com/view/pos 

Why is this important?In 2023–2024, even strong projects faced issues. For example, failures in Celestia, Secret Network, and in the Multichain ecosystem many users lost funds. People who invested everything there suffered the most. Those who diversified their staking handled it calmly.

Also, part of investments can be allocated to companies engaged in cloud mining, such as Gomining — with very simple conditions and a low entry threshold. 

Mistake #6: Using Only “Regular Staking” and Ignoring DeFi Opportunities

Many people think staking is just “freeze your coins and get a percentage.” But since 2024, new services have appeared that allow you to earn more without locking assets.

This is called liquid staking or LSD/LST (liquid staking). The idea is simple: you stake the coin, but you receive another token in return, which you can use.

For example, for Ethereum:

• you stake ETH via Lido — https://lido.fi
• you receive stETH, which also grows in value
• and this stETH can already be used: to take a loan against it or invest in DeFi

Beginners often don’t know about this and receive only the basic 3–5% per year. Those who combine staking with DeFi can increase returns up to 8–14% per year.

But important: if you take loans against stake-tokens, you must understand the risks. Otherwise, you can be liquidated. Therefore, for beginners, it is enough to first master liquid staking without additional schemes.

Mistake #7: Getting Stuck in the Past and Not Following Staking Trends

What worked 2–3 years ago may no longer be profitable in 2025–2026. The staking world is evolving, and new earning methods are emerging.

Key trends you should follow:

• Restaking. A new format where you can “reuse” your staked ETH and receive additional income on top of regular staking. Example — the EigenLayer platform: https://www.eigenlayer.xyz
• LSDfi. This is when liquid staking is combined with DeFi to increase returns without exiting ETH. You can track updates on Defillama: https://defillama.com
• Shared Security. A model where new networks use the security of major networks (for example, in the Cosmos ecosystem). This reduces validator costs and simplifies blockchain launches.
• Centralization of staking. When too many coins are staked through 1–2 services (for example, Lido or exchanges), the network becomes less decentralized — risks increase.

Experts believe that because of the restaking model, the total ETH yield by 2026 may rise to 8–12% per year, but risk will also increase — because one failure may affect many participants at once.

Expert Opinions

“An investor who compares staking to a bank deposit loses. Staking is a combination of yield, inflation, network security, and decentralization. Those who understand this math — control the risk.” — CTO of Pantera Capital, speaking at Token2049

“Restaking is the new reality. But once the yield exceeds 10–12%, you must understand: you are taking a systemic network risk.” — Analyst at Glassnode Research

FAQ: Answers to Common Questions

What is PoS staking in simple terms?It is a way to earn income by locking cryptocurrency to support blockchain operations.

Can you make money on PoS in 2025?Yes, 5–12% per year in major networks is realistic. With DeFi layers — up to 20%, but with risk.

What mistakes do beginners make?The main ones: choosing tokens only by APY, full lock-up with no exit plan, no diversification, and lack of understanding of restaking risks.

Is staking safe?Relatively: it is safer than trading, but there are risks of slashing, hacks, token inflation, and liquidations in DeFi.

How to use PoS staking in 2025?Combine regular staking + LST (stETH/jitoSOL) + moderate restaking (10–25% of portfolio).

Which metrics should I track?APY vs inflation, TVL, share of liquid staking, validator concentration, slashing history.

Where to follow updates?DeFiLlama, StakingRewards, Dune, Lido/Rocket Pool, CoinGecko.

Conclusion

Staking in 2025–2026 is no longer the “put coins and forget” option. To make it truly profitable, you need at least some understanding of a few things:

• whether inflation affects your income,
• how reliable the validator or platform is,
• whether you need flexibility or locked coins are acceptable,
• whether to include DeFi tools,
• and which new trends can increase profit or add risk.

If you don’t blindly chase percentages and avoid common mistakes, staking stops being a “lottery” and turns into a clear investment strategy that can provide stable returns — and more calmly than trading.

Simply put: 🔹 understand the rules — you earn, 🔸 ignore them — you lose.

And now, knowing these 7 mistakes, you are already one step ahead of most beginners.

To not miss the fundamentals, start with the basics: subscribe to Crypto Academy and get access to the free course “Bitcoin and Mining” → https://academy.gomining.com/courses/bitcoin-and-mining

Telegram | Discord | Twitter (X) | Medium | Instagram