Baking

What Is Baking in Crypto?

Baking is the Tezos blockchain’s native method for validating transactions and creating new blocks. In Tezos’ Liquid Proof-of-Stake (LPoS) consensus model, trusted participants known as bakers (similar to miners in Proof-of-Work systems) are responsible for producing and signing blocks. The more XTZ tokens they lock (their stake), the greater their chance of being selected to bake—or endorse—a block.

Why Baking Matters in Tezos

1. Essential for Network Security & Integrity
Bakers play a crucial role in verifying transactions, constructing blocks, and approving the work of other bakers. They help safeguard against double-baking or fraudulent activity, with slashing mechanisms in place to penalize misconduct.

2. Rewards and Accessibility
To become a baker, users need to meet a minimum XTZ stake (often around 6,000–10,000 XTZ) or can opt to delegate to an existing baker. Both paths allow participation in consensus while earning protocol rewards.

3. Energy-Efficient Alternative to Mining
Unlike energy-intensive Proof-of-Work systems, Tezos baking requires minimal computational resources, making it far more environmentally sustainable.

4. High Delegation and Network Participation
Tezos boasts widespread community involvement—more than 75% of XTZ tokens are actively staked or delegated, illustrating strong decentralized governance and commitment.

5. Real-World Industry Adoption
Institutional entities, like Infrachain, have joined the ecosystem as “corporate bakers,” using the responsibility of baking to support network resilience and credibility.