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Proof of Stake

Technical · Networks & Protocol Infrastructure · Last reviewed: September 2026

Proof of stake is a family of blockchain consensus mechanisms in which participants' eligibility or influence in proposing, validating, or attesting to blocks is tied to cryptocurrency or other value committed as stake.

Explanation

Proof-of-stake protocols use economic stake as a central security resource. Validators can earn rewards for correct participation and can lose rewards or staked value under penalty or slashing rules when they violate protocol requirements. Designs differ substantially in validator selection, delegation, finality, slashing, and governance.

Boundaries

Proof of stake is a consensus family. Staking alone does not mean every holder participates directly in validation, because stake can be delegated or pooled under some protocols.

Why it matters

The consensus model affects the security assumptions and finality characteristics of the networks on which stablecoins operate.

Example

A validator can lock the network's native asset as stake and participate in block attestation, earning rewards for correct behavior while facing penalties for specified protocol violations.

Related terms

Sources

  1. Blockchain without Waste: Proof-of-Stake. Oxford University Press, The Review of Financial Studies 34(3): 1156-1190, 2021. doi:10.1093/rfs/hhaa075 Peer-reviewed research
  2. Shehar Bano et al.. SoK: Consensus in the Age of Blockchains. Association for Computing Machinery, Proceedings of the 1st ACM Conference on Advances in Financial Technologies, pp. 183-198, 2019. doi:10.1145/3318041.3355458 Peer-reviewed research
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