Proof of Stake

Proof of Stake (PoS) is a consensus mechanism in which validators lock up — stake — the network's native asset as an economic bond, and the protocol pseudo-randomly selects a validator to propose each new block, with other validators attesting to its validity. Dishonest behavior, such as proposing conflicting blocks, is punished by slashing, where the protocol destroys part of the offending validator's stake, giving validators a direct financial reason to follow the rules. Because no computational race is involved, PoS uses dramatically less energy than Proof of Work — Ethereum's 2022 switch to PoS, known as The Merge, cut its annualized electricity consumption by more than 99.988%. Ethereum, Cardano, and Polkadot are among the major chains securing their blockchain with PoS today, and PoS's lower transaction costs make it the more common foundation for minting and transferring on-chain assets, including tokenized domains.