Proof of Stake (PoS)
A consensus mechanism where validators stake cryptocurrency as collateral to earn the right to verify transactions.
Proof of stake is how most modern blockchains agree on which transactions are valid. Validators lock up (stake) tokens as a security deposit. If they validate honestly, they earn rewards. If they cheat, their stake gets slashed.
Ethereum switched from proof of work (mining) to proof of stake in September 2022, reducing its energy consumption by over 99%. Solana, Avalanche, Polygon, and most chains where USDC operates use proof of stake.
As a USDC user, the consensus mechanism affects your experience indirectly through transaction speed and fees. PoS chains generally offer faster and cheaper transactions than proof of work chains.
Related Terms
Validator
A computer that verifies transactions and adds new blocks to a proof-of-stake blockchain.
Staking
Locking up cryptocurrency to help secure a blockchain network, earning rewards in return.
Blockchain
A distributed, immutable digital ledger that records transactions across a network of computers.
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This definition is provided for educational purposes. USDC.org is an independent resource and is not affiliated with Circle Internet Financial.