A consensus mechanism where validators lock up (stake) tokens as collateral to validate transactions and earn rewards.
Proof of Stake (PoS) is a consensus mechanism where validators lock up ('stake') the blockchain's native token as collateral to earn the right to validate transactions and produce new blocks. Validators are selected to propose blocks based on the amount staked, and they earn rewards (new tokens + transaction fees) for honest participation. If a validator acts maliciously (like validating fraudulent transactions), their stake is partially destroyed ('slashed') — creating a financial incentive for honest behavior. PoS uses dramatically less energy than Proof of Work (no computational puzzle-solving), making it the dominant consensus mechanism for newer blockchains. Ethereum's transition from PoW to PoS in September 2022 ('The Merge') reduced its energy consumption by 99.95%. Variants include Delegated PoS (token holders vote for validators), Nominated PoS (Polkadot), and Liquid Staking (Lido lets you stake while maintaining liquidity).
Proof of Stake replaced the energy-intensive mining of Proof of Work with an economic security model where validators lock up ('stake') tokens as collateral. The amount staked determines the probability of being selected to propose the next block. Validators who act honestly earn rewards; those who attempt fraud have their stake partially destroyed ('slashed'). This economic incentive structure aligns validator behavior with network health without requiring massive energy expenditure. Ethereum's switch to PoS ('The Merge') in September 2022 was the most significant consensus change in crypto history, reducing energy consumption by 99.95%. PoS variants abound: Delegated PoS (TRON, EOS) has a small elected validator set for maximum speed; Nominated PoS (Polkadot) distributes stake algorithmically; Liquid Staking (Lido, Rocket Pool) lets stakers maintain liquidity while earning rewards. Critics argue PoS concentrates power among wealthy token holders; proponents counter that PoW similarly concentrates among those who can afford mining hardware and electricity.
Ethereum requires 32 ETH (~$100,000+) to run a solo validator, but liquid staking protocols like Lido let anyone stake any amount of ETH and receive stETH tokens representing their stake plus accruing rewards.
Different security models, both proven effective. PoW security comes from the energy cost of attack — you'd need to command more computing power than all honest miners combined. PoS security comes from economic cost — you'd need to acquire and risk losing a huge amount of staked tokens. Both have operated at massive scale without successful attacks on their base layers.