GlossaryIntermediate

Proof of Stake

A consensus method that uses committed assets and validator rules to coordinate blockchain updates.

Proof of stake selects validators to propose and check blocks based on assets committed to the protocol. Validators must follow the network's rules and may face penalties for certain dishonest behavior. See Kaavon's "Validator" and "Staking" glossary definitions for the participant and the act this consensus method is actually built around.

Proof of stake avoids the mining competition used by proof of work, but it introduces its own design questions around validator participation, concentration, rewards, and penalties — see Kaavon's "Slashing" glossary definition for the specific penalty mechanism this refers to.

Examples

Ethereum uses proof of stake to coordinate validators.
Staking outcomes depend on protocol rules and risks; the term does not imply a guaranteed return.