Staking Contracts

Definition ∞ Staking contracts are smart contracts on a blockchain where users deposit their cryptocurrency to participate in the network’s Proof of Stake (PoS) consensus mechanism. These contracts govern the locking of assets, the distribution of rewards, and the conditions for withdrawal. By committing funds to these contracts, participants act as validators or delegate their stake to others. They are fundamental to the security and operation of PoS networks.
Context ∞ News about cryptocurrency often references staking contracts when discussing network upgrades, validator activity, and the economic model of PoS blockchains. Reports might detail changes in contract functionality or the total value locked within them. Understanding staking contracts provides crucial context for comprehending how PoS networks maintain security and how participants earn rewards. These contracts are central to the decentralized governance and operation of many digital assets.