What Is Staking?
Staking is the process where users lock up their tokens to support a blockchain network and, in return, receive rewards. It is an essential part of proof-of-stake (PoS) consensus mechanisms used by many blockchain networks, including Avalanche. PoS systems require participants to stake a certain amount of tokens as collateral to participate in the network and validate transactions.
How Does Proof-of-Stake Work?
To resist sybil attacks, a decentralized network must require that network influence is paid with a scarce resource. This makes it infeasibly expensive for an attacker to gain enough influence over the network to compromise its security. On Avalanche, the scarce resource is the native token, AVAX. For a node to validate a blockchain on Avalanche, it must stake AVAX.