Definition ∞ Staking ratio is the proportion of a cryptocurrency’s total circulating supply that is actively locked up in staking to secure its network. This metric indicates the level of participation in a proof-of-stake consensus mechanism, reflecting the collective commitment of token holders to the network’s security and governance. A higher staking ratio generally implies stronger network decentralization and increased resistance to certain types of attacks, as it raises the cost for a malicious actor to gain control. It is a key indicator of network health and community engagement.
Context ∞ Cryptocurrency news often references the staking ratio when discussing the security and decentralization of proof-of-stake blockchains, particularly during network upgrades or new project launches. Changes in this ratio can signal shifts in investor sentiment or the perceived attractiveness of staking rewards. A rising staking ratio is generally viewed as a positive development for network stability and long-term viability.
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