Proof-of-Stake

Proof-of-Stake (PoS) is a consensus mechanism used by many blockchains to validate transactions and add new blocks. The selection of those who validate blocks is based on the amount of crypto-assets put into staking, that is, locked as a guarantee, rather than on computing power as in Proof-of-Work.

Validators are chosen according to the protocol’s specific rules from among those who have locked their crypto-assets. In return for validation activity, they may receive rewards. These rewards are not guaranteed interest; they are variable and depend on the protocol’s rules, the total amount staked, and network conditions.

Proof-of-Stake is considered less energy-intensive than Proof-of-Work. However, it involves specific risks, including potential penalties (slashing) for validators that do not comply with the protocol’s rules.

Disclaimer: This entry is for information purposes only and does not constitute investment advice, a recommendation or a solicitation to invest.

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