What is Proof of stake?
A consensus system where validators lock up coins as collateral for the right to confirm transactions — misbehave and the stake is slashed. Ethereum's model; the basis of staking rewards.
Proof of stake secures a blockchain with capital instead of energy: validators lock up coins as collateral for the right to propose and confirm blocks, earn rewards for honest work, and have their stake "slashed" for cheating. Misbehaviour isn't just unprofitable — it destroys the misbehaver's own money. Ethereum switched to this model in 2022, cutting its energy use by ~99.95%, and most modern chains launched with it.
For holders, PoS is where staking yield comes from — a share of the rewards for helping secure the network. The trade-offs versus proof of work are genuinely debated: PoS is vastly cheaper to run and lets holders earn, while critics argue wealth-based validation tends toward concentration and that PoW's physical cost anchors security in something outside the system. Both models have now secured hundreds of billions of dollars for years; the argument is about decades.
See it in practice
Related terms: Proof of work · Staking · Ethereum · full glossary
FAQ
What does "slashing" mean?
The protocol destroying part of a validator's locked stake as punishment for provable misbehaviour — signing conflicting blocks, prolonged downtime on some networks. It's the economic teeth that make proof of stake bind.
Is proof of stake less secure than proof of work?
It's differently secured — attacking PoS means acquiring and burning enormous capital inside the system; attacking PoW means out-spending its energy budget outside it. Both have held at scale; which ages better is an open research argument, not a settled fact.
General information only, not financial advice. Definitions are maintained in our fact database and reviewed with the daily rebuild.