Staking and crypto risks

Staking is a way to earn rewards with certain cryptocurrencies in exchange for locking them up to help validate the operations of their network. In return for that "deposit", the network pays you rewards in the crypto itself. It sounds like a bank deposit, but the resemblance is misleading.

How it works (and what APY is)

Many networks (proof-of-stake ones) choose who validates the next blocks among those who have locked up their coins. For collaborating, they distribute new coins. The return is usually advertised as APY.

APY (Annual Percentage Yield): the annual yield with compounding included (equivalent to the savings TAE). An 8 % APY means that, reinvesting the rewards, in a year you would accumulate 8 % more coins.

Note that nuance: APY is measured in amount of crypto, not in euros. If the coin falls 50 % in price, you can have 8 % more coins and still have lost half your money.

Why a high APY is NOT "risk-free interest"

A bank deposit at 3 % is guaranteed by the deposit fund up to €100,000. A "15 % APY staking" guarantees nothing. That percentage compensates very real risks:

Price risk (volatility): crypto can rise or fall violently. Volatility is the magnitude of those swings; in crypto it is extremely high.
Lock-up periods: sometimes you cannot withdraw your coins for days or weeks, exactly when you would most want to sell them.
Counterparty risk: if you stake through a platform and that platform fails or is a fraud, you can lose everything. It has happened.
Technical risk (slashing): on some networks, if the validator misbehaves, part of the locked-up coins is penalized.

Golden rule: a return far above "normal" is not a gift; it is the price of a risk someone is taking on. If it is your money, that someone is you.

How they are taxed in Spain (with caution)

There is real ambiguity here and the doctrine keeps evolving. The criterion of the tax authority (DGT) has been to treat staking rewards as investment income, taxed in the savings base (19 %-30 %), valued in euros at the moment of receiving them. In addition:

When you sell the crypto, the price difference will be a capital gain or loss, also in the savings base.
There are reporting obligations on crypto assets (specific declarations if you exceed certain thresholds or hold them abroad).

Given the complexity and regulatory changes, this is precisely a topic to check with an adviser.

The tax trap almost nobody sees coming

If you are taxed on the reward when you receive it and the crypto then collapses, this can happen: you declare €1,000 of rewards (and pay tax on them), but when you sell those coins they are worth only €300. The €700 loss is a capital loss in the other group of the savings base and only offsets up to 25 % of your capital gains for the year. Net result: you can end up paying tax on income you never actually realised in euros. Keep a date-by-date record of the euro value of each reward.

Common mistakes

Confusing APY with guaranteed interest. The FGD covers none of this.
Leaving coins on the exchange for convenience. Counterparty risk: if it fails, you are just another creditor. Not your keys, not your coins.
Forgetting reporting obligations. Balances on foreign platforms may require a specific declaration; non-compliance is penalised.

This is educational information, not tax or investment advice. Cryptocurrencies carry a high risk of loss and their taxation can change; consult the AEAT or a professional.