Proof of stake (PoS)

Proof of stake is a consensus mechanism in which validators lock up ("stake") the network's own coins for the right to propose and confirm blocks. Instead of burning electricity, they put capital at risk: validators who follow the rules earn rewards, and those who act dishonestly, for example by signing two conflicting blocks, can have part of their stake destroyed ("slashed").

Ethereum moved from proof of work to proof of stake in an upgrade called the Merge on 15 September 2022, cutting its energy use by more than 99%. Running a solo Ethereum validator requires 32 ETH. Cardano, Solana, Avalanche and many other networks also use variants of proof of stake.

Critics argue that proof of stake can concentrate influence among the largest holders and staking providers; supporters point to its efficiency and the economic penalties built into it.