Definition ∞ A staking pool is a collective of cryptocurrency holders who combine their assets to increase their chances of validating transactions and earning rewards on a Proof-of-Stake blockchain. Participants in a staking pool delegate their tokens to a chosen validator node, which then uses the aggregated stake to participate in the network’s consensus mechanism. This approach allows individuals with smaller holdings to contribute to network security and earn a share of the block rewards, proportional to their contribution, without needing to run their own validator infrastructure. The pool operator manages the technical aspects of validation and distributes rewards.
Context ∞ Staking pools are a vital component of many Proof-of-Stake networks, democratizing access to staking rewards and enhancing network decentralization by allowing wider participation. News often covers the performance and security of various staking pools, as well as debates surrounding their potential for centralization if large pools dominate. The ongoing development of liquid staking derivatives, which represent staked assets, further expands the utility and accessibility of these pooled resources.
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