Ethereum is currently a proof-of-work (PoW) blockchain but is transitioning to proof-of-stake (PoS) with the Ethereum 2.0 upgrade. Both PoW and PoS are types of consensus mechanisms that let a decentralised network of digital currencies all agree on the current state of the blockchain.
When Ethereum becomes a PoS blockchain, users can stake their ETH with validators on the network, who then order transactions and create new blocks. When holders take their token, they receive a yield and effectively earn interest paid in ETH. The move to Ethereum 2.0 will make the network more secure, scalable, and sustainable.