As Ethereum is moving to Proof of Stake(PoS) based functionality, there is more and more interest around what is Proof of Stake and if there are any other interesting protocols that are working using the same mechanism?
Let me introduce you to the NEAR Protocol - A protocol that used PoS to secure it's blockchain. The underlying design for the protocol can be found in this paper titled - "Nightshade". Nightshade outlines the Sharding Design used by NEAR Protocol and how the design brings both scalability and performance to the blockchain ecosystem.
This is a really cool article to learn more about Sharding if you are interested.
Who are Validators?
The proof of stake ecosystems are built by validators who are responsible for consensus in the blockchain. What we know about blockchain, is that it consists of a set of blocks that are linked together with the help of a hash. But how are the blocks created? The validating nodes work to club the transactions together, execute them and help maintain the current state of blockchain.
How can the validators stake?
In order to become a validator in the NEAR ecosystem, one needs to stake some amount of NEAR tokens, which act as their collateral. Why this collateral? This helps them remain honest to the consensus. The staked tokens are locked, which means that if the validators try to attack the blockchain consensus, their stake would be destroyed in stages.
What is in it for the validators? As the validators are validating the transactions and creating the blocks, they get rewards for their service every epoch(~12 hours).
Do I have to become a validator to stake?
No, you can also request for delegation. If you are a token holder and are looking to get some staking rewards, you can stake in partnership with a Validator, leasing a small portion of their validating node. Isn't this COOL? Delegators can lock their funds into a staking pool, and receive rewards at the end of every epoch, minus the fees paid to the Validator.
Your rewards would depend on the stake that you have, in the network. Therefore, whether you are a validator or a delegator, the more stake you have in the network, the higher your rewards!!
Do you have some NEAR tokens in your wallet and want to start staking? Now is the time to explore :D!
You can find more details about Validators and Delegators here.
