Definition ∞ ‘Token Staking’ is a process where individuals lock up their digital tokens to support the operations of a blockchain network, typically in proof-of-stake consensus mechanisms. In return for their commitment, stakers often receive rewards in the form of additional tokens. This activity contributes to network security and stability by incentivizing participants to act honestly. It also provides a method for token holders to generate passive income from their holdings.
Context ∞ The current discussion surrounding ‘Token Staking’ frequently centers on its role in network security, the yield rates offered, and the implications of token lock-up periods. Debates often arise concerning the potential for staking pools to centralize network control and the regulatory treatment of staking rewards. Future trends are likely to involve the development of more flexible staking options and increased institutional participation in staking services.
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