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What is staking?

On different platforms, the staking process goes like this: you deposit a certain type of token to a pool, and after a while, you get the new token of the same kind or get another type of token.

So, what is staking for? Where does the reward token come from?

Newly minted tokens are one of the sources, like CAKE from PancakeSwap. According to the rationale of CAKE, every time a new block forms, some new CAKE tokens will be minted. How will these tokens be distributed? PancakeSwap created a pool where users can stake their CAKE and withdraw at any time. Then every time new CAKEs are minted, they will be distributed based on the staked amount. The more one stakes, the more CAKEs one will receive.

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