Proof of Stake
A system where the right to propose and approve blocks goes to participants who lock up the network's own coins as collateral.
Validators deposit stake, the protocol selects proposers pseudo-randomly in proportion to that stake, and the remaining validators attest to what they see, with the weight of attestations determining the canonical chain. Misbehavior that could support two conflicting histories is punished by slashing part of the deposit, so an attack costs capital that the attacker forfeits rather than electricity that can be resold. Ethereum moved from proof of work to proof of stake at the Merge in September 2022, and Cosmos, Cardano, Solana and many others use their own variants. Rewards paid to validators come from newly issued units plus transaction tips, and this payment is often described with equity language as a yield or a dividend, which it is not: it is not a distribution of profits from an enterprise, there are no earnings behind it, it is denominated in the same asset rather than in cash, and holders who do not stake are diluted by the issuance others receive.
In practice
On Ethereum, validators are chosen to propose blocks in twelve-second slots and attest to the head of the chain each epoch, with rewards for accurate and timely attestations.
The common misunderstanding
Staking rewards are not interest and not a dividend; they are mostly new issuance, so a headline percentage says nothing about the value of what is received.
The figure this maps to
The share of a token's supply currently committed to securing a proof-of-stake network.
Limits: Numerator and denominator often come from different sources with different definitions, and using total supply rather than circulating supply can shift the answer by tens of percentage points for the same chain on the same day. Staked no longer means illiquid: liquid staking tokens let a holder…