Security through committed value.
HOW IT WORKS
Participants lock holdings as collateral, and are selected to produce blocks.
WHAT SELECTION DEPENDS ON
Stake size, usually with randomisation.
WHAT SLASHING IS
Forfeiting part of the stake for provable misbehaviour.
WHY THAT SECURES IT
Attacking risks the attacker's own holdings.
WHAT IT PROVIDES OVER WORK-BASED CONSENSUS
Vastly lower energy consumption Faster finality, in most designs
WHAT IT IS CRITICISED FOR
Favouring existing large holders Complexity, creating more ways to fail Less battle-tested history
WHAT DELEGATED VARIANTS DO
Holders vote for a limited set of validators.
WHAT THAT TRADES
Decentralisation, for performance.
WHAT STAKING MEANS FOR HOLDERS
Committing holdings to earn rewards.
WHAT IT RISKS
Slashing, from validator misbehaviour Lock-up periods preventing withdrawal Validator or platform failure
WHAT LIQUID STAKING PROVIDES
A tradeable token representing staked holdings.
WHAT IT INTRODUCES
Another layer of risk, and concentration in a few providers.
WHAT TO UNDERSTAND
That advertised staking returns are not risk-free, whatever the presentation.
