Definition ∞ Stake fragmentation describes a condition in Proof of Stake (PoS) blockchain networks where a large number of validators hold relatively small amounts of staked cryptocurrency, leading to a highly dispersed distribution of validation power. While potentially promoting decentralization by preventing concentration of stake, excessive fragmentation can also introduce inefficiencies or increase the complexity of network governance. It refers to the granular distribution of economic influence within a staking ecosystem. This can affect network security and consensus.
Context ∞ Stake fragmentation is a topic often discussed in crypto news when evaluating the decentralization and security posture of Proof of Stake blockchains. Reports may analyze how different staking models either promote or mitigate fragmentation, impacting the network’s resilience against attacks or censorship. Understanding the degree of stake fragmentation provides crucial context for assessing the long-term health and governance dynamics of a PoS protocol.
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