# Staking

Staking is central to how XYO Layer One stays secure and fair. By locking $XYO into the network, participants help protect the blockchain and earn rewards in $XL1, the utility token of Layer One. There are two main ways to stake:

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th></th><th data-hidden data-card-cover data-type="image">Cover image</th><th data-hidden data-type="image">Cover image (dark)</th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td><strong>Node Staking</strong></td><td>Node operators stake their own address to validate blocks and earn rewards, but face slashing risk for dishonest or harmful actions. Node Staking returns higher rewards than System Staking.</td><td><a href="/files/STlgP4z35bPo2uO4V2rw">/files/STlgP4z35bPo2uO4V2rw</a></td><td><a href="/files/uMtEdDAKFrMvxk2JdFoy">/files/uMtEdDAKFrMvxk2JdFoy</a></td><td><a href="/pages/Vgh52GpTHSBYrRLFMTQZ#node-staking">/pages/Vgh52GpTHSBYrRLFMTQZ#node-staking</a></td></tr><tr><td><strong>System Staking</strong></td><td>Any XYO holder can stake to earn XL1 rewards without running a node and without slashing risk. Due to the low risk, System Staking returns lower rewards than Node Staking.</td><td><a href="/files/H3ocFhmxjeXl9A7NR0U5">/files/H3ocFhmxjeXl9A7NR0U5</a></td><td><a href="/files/addV35TBhjxh4YDCTfdo">/files/addV35TBhjxh4YDCTfdo</a></td><td><a href="/pages/Vgh52GpTHSBYrRLFMTQZ#system-staking">/pages/Vgh52GpTHSBYrRLFMTQZ#system-staking</a></td></tr></tbody></table>

### Staking Process: Actions & Rules

Staking in XYO Layer One moves through a simple cycle: add stake, remove it, wait through a cooldown, and withdraw. Tokens progress from active to withdrawn, with cooldowns in place to prevent abuse. Node stakers earn higher but riskier rewards, while system stakers earn pooled rewards without slashing risk.

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### Slashing

Node stakers earn rewards for good behavior but can be penalized for misconduct. If a node provides dishonest data or disrupts consensus, its stake may be slashed. Slashing acts as a safeguard to protect the integrity of the network.

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