Glossary
Proof of stake
Proof of stake (PoS) is a consensus mechanism in which validators lock up coins as collateral to propose and confirm blocks. Honest work earns rewards; provable cheating can be punished by destroying part of the stake.
Also called PoS, Proof-of-stake, Staking consensus
See also
Proof of stake (PoS) is a way for a blockchain to agree on new blocks by asking participants to put money at risk instead of burning electricity. Validators deposit, or “stake”, the network’s coin. The protocol picks validators to propose blocks and others to vote on them, in proportion to the stake involved.
How proof of stake works
On Ethereum, which switched from proof of work to PoS on 15 September 2022, a validator needs 32 ETH to activate. Time is divided into slots of 12 seconds. In each slot, one validator is randomly chosen to propose a block, and committees of validators attest that it is valid. Once enough of the total stake has voted for a checkpoint, blocks become final and cannot be reverted without destroying a large amount of ETH.
Validators earn rewards for doing their job and lose small amounts when they are offline. If a validator provably cheats, for example by signing two conflicting blocks, it is “slashed”: part of its stake is destroyed and it is removed from the network. Since the Pectra upgrade of May 2025, a single Ethereum validator can hold up to 2,048 ETH.
A concrete example
Maria runs a validator at home with 32 ETH. Her machine proposes a block from time to time and attests in every epoch, earning ETH rewards. If her internet goes down for a day, she loses a small fraction of what she would have earned. If she ran the same keys on two machines and they signed conflicting messages, she could be slashed.
Users who do not have 32 ETH can join pools or use exchanges through staking services.
Why it matters for users
- Much lower energy use: the Ethereum Foundation estimates the Merge cut Ethereum’s consumption by about 99.95%.
- Holders can take part in security and earn a yield on their coins.
- Many major networks use a form of PoS, including Ethereum, Solana, Cardano and Avalanche.
Limits and risks
PoS tends to favour those who already hold many coins. Large staking providers and exchanges can concentrate validator power. Staking also brings technical risks (slashing, software bugs) and, with liquid staking tokens, extra smart contract risk. Rewards are not guaranteed and are paid in a volatile asset.