// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS
What is Proof of Stake (PoS)?
Proof of Stake (PoS) is a consensus mechanism where validators lock cryptocurrency as collateral to participate in block production, with selection proportional to stake amount.
WHY IT MATTERS
PoS replaces energy expenditure with economic commitment. Validators put their own money at risk. Honest behavior earns rewards; dishonest behavior triggers slashing — burning staked funds.
On Ethereum, validators stake 32 ETH. The total staked value creates the security budget — tens of billions. PoS enables faster blocks, predictable finality, and dramatically lower energy use.
The tradeoffs: concerns about centralization (wealthy validators have more influence) and 'nothing at stake' (addressed through slashing).
FREQUENTLY ASKED QUESTIONS
How does staking work?
Validators deposit collateral, are selected to propose and attest to blocks. Correct participation earns 3-8% APR; misbehavior triggers slashing — permanent loss of staked funds.
Can I stake without 32 ETH?
Yes. Liquid staking protocols (Lido, Rocket Pool) let you stake any amount and receive liquid tokens representing your position. Exchanges also offer staking.
Is PoS less secure than PoW?
Different model, not necessarily less secure. PoS security comes from economic stake at risk; PoW from energy. Both make attacks expensive.