Proof of Stake Equity

Definition ∞ Proof of Stake Equity refers to the amount of cryptocurrency an individual or entity holds and stakes within a Proof of Stake consensus mechanism. This staked amount serves as collateral, granting the staker the right to validate transactions and earn rewards. A larger equity stake typically corresponds to a greater chance of being selected as a validator. It represents a participant’s economic commitment to the network’s security.
Context ∞ The concept of Proof of Stake Equity is central to the security and decentralization discussions of many modern blockchain networks. Debates often focus on the concentration of staked assets and its potential impact on network governance. News frequently covers changes in staking rewards or penalties, which directly affect the profitability and risk for equity holders.