What are the principles of Staking in PoS Blockchains?

Diving into details, staking has such principles:


  1. Network participation. Validators run the network: maintain blockchain nodes, store blockchain data, and network state, validate transactions, create blocks, vote for proposals, and ensure the network's security. PoS network won't work without validators.
  2. Staking rewards. As validators do the most important job, the network rewards them with freshly minted tokens. Such incentives encourage more people to participate in staking and strengthen the network's security.
  3. Risk of slashing. For doing their job poorly, e.g. missing blocks, the network can slash the validators — take a part of their stake as a penalty. 
  4. Validator election. In most PoS networks, the protocol selects random validators to participate in the current validation cycle. The probability of being chosen grows with the number of tokens staked, but in general, all validators earn the same APY.
  5. Stake delegation. In many PoS networks users can delegate or provide their tokens to validators to earn a share of their staking rewards.
  6. Stake liquidity. In most PoS networks staked tokens are locked for the whole validation period plus some time after. The locking period is needed to apply slashing.
  7. Network security. Validators need to invest a significant amount in tokens (300,000 TON for example). To halt or hijack the network a bad actor has to control >51% of the total network stake. Thus, the more tokens are staked, the higher the cost of attacking the network. Billions of dollars in staking means great network security.

These are the main principles of staking, which may have different details and implementation in particular PoS networks.

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