BlockchainIntermediate#Consensus#Efficiency
Proof of Stake (PoS)
P
Definition
A consensus algorithm that chooses validators based on the number of tokens they hold and are willing to 'stake'.
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Concept Diagram
Key Takeaways
1
PoS secures the network through staked capital instead of computational energy
2
Validators lock tokens as collateral - honest behavior earns rewards while dishonesty gets slashed
3
Uses 99.9% less energy than Proof of Work making it more sustainable
4
Anyone with tokens can participate by running a validator or delegating to one
Practical Example
Ethereum requires 32 ETH to run a validator node - if you validate honestly you earn ~3.5% APY in rewards, but if you sign conflicting blocks your stake gets slashed.
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Related Terms
Blockchain
LST (Liquid Staking Tokens)Tokens that represent staked assets (like stETH for ETH), allowing users to earn staking rewards while keeping their capital liquid for DeFi.
Blockchain
Consensus MechanismA fault-tolerant process used in blockchain systems to achieve the necessary agreement on a single data value or network state.
Blockchain
Proof of Work (PoW)A consensus algorithm that requires validators to solve intensive computational puzzles to secure the network.
Strategy
StakingThe process of locking up digital assets to support a network's operation in exchange for newly minted rewards.
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