What is Baking?
Crypto Glossary Definition
Baking is the process that Tezos uses to append new blocks of transactions to its blockchain. It is a kind of delegated proof of stake. Bakers receive rewards for each block baked, similar to how Bitcoin miners receive rewards for discovering new blocks. A baker is more likely to bake a block if they have a larger number of rolls (groups of 10,000 XTZ). Accounts must be registered as a delegate in order to partake in the baking process, and can bake on behalf of other accounts who do not meet the 10,000 XTZ requirement.
Why Baking Matters
Baking is Tezos' name for validating — the "larger rolls, more likely to bake" mechanic is functionally the same stake-weighted selection used by other delegated Proof-of-Stake chains, just with Tezos-specific terminology (bakers, rolls, delegation) layered on top.
Baking in Practice
A Tezos holder who has accumulated 15,000 XTZ, comfortably above the 10,000 XTZ roll threshold, decides to register as a baker rather than simply letting the tokens sit idle in a wallet. After setting up the required infrastructure and registering as a delegate on the network, their account becomes eligible to be selected to bake, meaning to validate and append new blocks of transactions, with the probability of being chosen for any given block roughly proportional to how many rolls their stake represents. Each time their node successfully bakes a block, they receive a reward in newly issued XTZ, similar in spirit to how a Bitcoin miner earns a reward for finding a valid block, except Tezos uses a delegated proof-of-stake mechanism rather than energy-intensive mining. A neighbor with only 2,000 XTZ, well below the roll requirement to bake independently, instead delegates their tokens to this baker, keeping full ownership and custody of the coins while still earning a proportional share of the baking rewards, minus a small fee the baker charges for the service. Over time, the baker's node stays online continuously, since missing scheduled blocks results in penalties, illustrating why reliable infrastructure matters as much as raw stake size in Tezos' baking system.
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