DeFi & Crypto Technical
Proof of Stake (PoS)
Consensus mechanism where validators stake crypto-assets to earn rights to validate transactions.
Definition
Proof of Stake replaces PoW computational competition with economic stake. Validators lock up (stake) crypto-assets and earn rewards for validating transactions correctly. Misbehaviour is penalised by stake forfeiture (slashing). Used by Ethereum (post-Merge 2022), Solana, Cardano.