Proof-of-Stake (POS)

How does Proof-of-Stake work?
Written by StakeSeeker
Updated 1 year ago

Proof of Stake (PoS) blockchains rely on staking as a consensus mechanism to secure their networks through transaction validation by a decentralized ecosystem of validator nodes.

Staking entails committing crypto holdings to a validator node on the blockchain network, effectively serving as collateral, which remains locked while actively participating in the network. This stake is put at risk by stakers to guarantee the legitimacy of transactions being verified by the validator node and ensure the good behavior of validator nodes.

In return for their participation, stakers are rewarded with newly minted tokens for successful validation of transactions and addition of blocks to the blockchain. However, staked funds can be penalized or slashed if a validator node is unavailable or acts maliciously.

Therefore, it is of utmost importance to choose a trusted validator node, such as those operated by StakeSeeker, to mitigate the risk of potential penalties or slashes and ensure the security and integrity of the PoS blockchain network.

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