Crypto glossary
Staking pool
A staking pool combines funds from many holders to run validators together, so people can earn proof-of-stake rewards without a full stake or their own setup.
Proof-of-stake networks often require a minimum stake or technical work that many holders cannot or do not want to handle. A staking pool collects deposits, runs or selects validators and shares rewards pro rata after taking a fee. On Ethereum, pools let users stake any amount instead of 32 ETH; on networks like Cardano, holders delegate to stake pools run by independent operators.
Pools come in several shapes. Custodial pools, such as staking offered by exchanges, hold the user's coins and credit rewards to an account. Non-custodial pools use smart contracts and often issue a liquid staking token that can be traded or used in DeFi. Some pools let node operators contribute part of the stake themselves, so they have funds at risk alongside users.
Pooling concentrates power: a few large pools controlling a big share of stake raises censorship and governance concerns. Users also take on operator risk, smart contract risk and slashing, and custodial staking adds counterparty and regulatory risk, since the provider holds the assets.
Example
A user with 2 ETH deposits it into a non-custodial staking pool and receives a liquid token that grows in value as the pool's validators earn rewards.