What is Proof of Stake?

With Proof of Stake (PoS), the network is secured by validators locking or staking large quantities of the network's native cryptocurrency. This is in stark contrast to Proof of Work (PoW) where the network is secured by the resource-intensive work of mining. This consensus mechanism allows validators to take part in the validation of new blocks which entitles them to receive small amounts of currency as a reward.

Both consensus mechanisms (PoS and PoW) have their merits. However, the core idea of PoS is that if someone cares about the overall safety, health and future of the network they would be willing to lock up their funds within the network.

PoS has been designed to be much more energy efficient than PoW which is the main criticism of PoW. Additionally, users without necessary funds to become a validator are allowed to delegate their tokens to a chosen validator to receive a proportion of the network rewards.