In a decentralized Blockchain network, each block is validated
by the Proof-of-stake (POS) as the Stake, and who lock their crypto
assets on the platform and actively participate in validating the
transactions and earns the reward for it. Mining requires a lot of
resources and energy for mining blocks over the network known as
Proof-of-work POW, and whereas stake requires crypto assets on
their wallets.
How Staking Works?
On staking, once should hold cryptocurrency to lock it up (stake
it) in a smart contract. When your stake is locked up, you vote to
approve transactions. The “contract” between the staker
and the blockchain network works.
Staking rules are distinct on various networks, and they are
like
- The staker accepts that they’ll only validate valid
transactions on the network. For example, they will not vote to
approve double-spend transactions.
- In trade for accepting valid transactions, the network rewards
the staker with a staking reward.
- If a staker vote to approve illegal transactions, they may lose
some or all of their stake.
This process is quite easy than mining as it requires a lot of
computing devices and energy for Providing POW.
Validators get the reward from the network for locking their
cryptos on the network to attain the consensus.
The rules describing the technical and financial needs to act as
a validator, like a stake size for validating transaction levels
performed the basis of the algorithm, and rewards distributed among
the validators.
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Michael Bleigh