Definition ∞ The Staking Network Effect describes how the value and security of a proof-of-stake blockchain increase as more participants stake their tokens. A larger staked amount enhances network security by making attacks more costly. It also attracts more users and developers due to increased trust and utility. This positive feedback loop strengthens the overall ecosystem.
Context ∞ The staking network effect is a core concept in the economics of proof-of-stake blockchains, influencing their long-term viability and growth. Discussions often highlight the interplay between staking rewards, validator participation, and the perceived security of the network. Monitoring the growth of staked assets provides insight into the health and adoption trajectory of these protocols.
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