Baking is a mechanism that is used to add fresh blocks of transactions to the network. This is a delegated proof-of-stake system in which bakers are rewarded for each baked block.
For the baking process to start, one requires no. of tokens, which is the native money on the that Blockchain. After accumulating no. of tokens, users can choose to become a baker or an endorser.
For better understanding, let’s assume one decides to become a baker. Bakers that run a full-note in order to keep the network running produce new blocks on the blockchain and gain rewards in the form of tokens.