PoS

Proof of Stake (PoS) is a blockchain consensus mechanism in which validators secure the network by holding and locking up stake. Block proposers and validators are selected with probability that grows with stake, reducing reliance on energy-intensive hashing used in proof of work.

Validators run nodes, validate transactions, and attest blocks. Stake is locked as collateral; misbehavior such as downtime or double signing can trigger penalties called slashing. Networks organize blocks into epochs or rounds and often use finality gadgets to cement blocks.

Variants include Delegated Proof of Stake (DPoS), where stakeholders vote for a small set of block producers, and Liquid or Nominated PoS, which allow stake delegation while preserving fund control. Some systems combine PoS with BFT-like finality mechanisms to achieve faster finality and stronger guarantees.

Advantages include energy efficiency, faster finality, and scalable throughput. Economic incentives align security with stake, and governance and validator participation can be more accessible than in proof-of-work systems.

Criticisms include stake centralization, where wealth concentrates influence; potential long-range or nothing-at-stake issues in some designs; and governance complexity. Effective slashing, randomness, and incentive design are essential to deter misbehavior and maintain security.

Notable implementations include Ethereum’s transition to PoS after the merge in 2022, Cardano’s Ouroboros, Tezos’ Liquid PoS, Polkadot’s Nominated PoS, Algorand’s Pure PoS, and Cosmos-era Tendermint-based networks. PoS remains a dynamic area of development and is commonly contrasted with PoW in discussions of blockchain security and sustainability.