How are the rewards on staking generated?

Staking rewards are generated as a way to reward you for helping a blockchain network run smoothly and securely. Here’s how it works in simple terms:

When you stake your crypto, you lock it up to help run the network. This means your coins are used to help verify transactions and keep the network safe.

In return, the network gives you extra coins as a reward. These rewards usually come from two main sources:

• New coins created by the network (like printing new money, but in crypto). Transaction fees paid by people using the network (like a small fee whenever someone sends crypto – a ‘gas’ fee).
• The more coins you stake and the longer you keep them staked, the more rewards you can earn. It’s similar to earning interest in a bank, but instead of depositing your money or lending your money to earn interest, you’re helping support the crypto network operations.

In summary:
You earn staking rewards because your staked assets help the blockchain work, and the network pays you with extra coins as a thank you.

Risks:
For risks relating to staking your crypto assets, please see the question ‘Are my staked coins at risk?’ and AMINA’s Staking Terms and Conditions and Protocol Level Staking Risk Disclosure