What is Proof of Stake?

Proof of stake is a way for a blockchain to reach consensus using economic commitment rather than raw computing power. Validators lock up, or stake, tokens as collateral. The network selects them to propose and confirm blocks, and honest work earns rewards while cheating can trigger slashing that destroys part of their stake. This ties security to money at risk.

This matters because proof of stake is what makes staking rewards possible. By staking or delegating, ordinary holders help secure the network and share in the rewards.

Example: a network requires validators to stake a set amount; those validators produce blocks and earn rewards, and delegators who back them receive a share.

Safety note: proof of stake rewards are real but come with real conditions, unbonding periods, variable rates, and slashing risk if a validator misbehaves. It is far more energy-efficient than proof of work, but the safety of your stake still depends on the validator and network you choose. Legitimate staking never requires sending coins to a stranger for guaranteed returns. Related terms include staking, validator, slashing, and consensus.