Definition ∞ External delegation refers to the practice where an entity or individual grants authority over certain aspects of their digital assets or network participation to a third party. This often occurs in proof-of-stake networks, where token holders delegate their staking rights to a validator to earn rewards without running their own node. It can also apply to delegating custody or management functions to a specialized service provider.
Context ∞ The debate surrounding external delegation often centers on the balance between convenience for individual token holders and the potential for centralization of power among a few large delegators or validators. Concerns about security risks, such as validator collusion or poor operational practices, are frequently raised in news and analytical reports.
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