How Does Staking in Crypto Work?

It might help to understand stakes the way you would use the term in finance or investment, where your stake in a company reflects your share in the company’s performance and, therefore, its profit or loss. In crypto staking, the staking reward is distributed proportionately to your share of the total staked funds, just as company profits are distributed proportionally to shareholders. Any loss that may happen is also shared proportionally among stakers.

Of course, in many cases, especially when dealing with many staking apps and platforms out there, a lot of this is simplified for the user and returns are approximated.

You could even see staking from a gambling point of 
view, whereby a stake is an amount of money or 
something else of value placed on the outcome of a 
venture, with the desired outcome resulting in a 
profit. This gambling viewpoint might not seem like 
the appropriate metaphor but it actually makes sense 
from the perspective of how blockchain networks run.