Proof of stake is an approach to blockchain consensus in which validators commit cryptocurrency as stake. Ethereum uses staked ETH to support block proposals and votes, with rewards for participation and penalties for specified failures. Its design provides an example of proof of stake; the label alone does not specify every network's rules.1

Ethereum's designReport an errorSuggest an improvement

Ethereum validators check proposed blocks and issue votes called attestations. Time is divided into slots, with a proposer selected for a slot and committees assigned voting duties. The voting process helps establish both the current chain head and longer-term agreement on its history.1

Checkpoint votes representing at least two-thirds of the active stake support justification and finalisation. Ethereum's documentation describes finality in terms of the economic cost of reversal, including slashing at least one-third of stake. A sufficiently large non-participating share can interrupt finality.1

Slashing penalises particular contradictory signed messages, including double proposals and conflicting attestations. Ordinary missed duties and offline penalties are different from slashing. Correlated offences can make losses more severe than an isolated offence.1

Checkpoints and trustReport an errorSuggest an improvement

Ethereum uses weak-subjectivity checkpoints to help a node joining or returning to the network identify the accepted history. A recent trusted checkpoint provides an anchor; the node then verifies the chain forward from that state. This addresses the problem of alternative histories signed by validators whose old stake is no longer available to penalise.2

The checkpoint must come from a source the operator trusts, and can be cross-checked against independent nodes or explorers. It is a different function from an ordinary finalised block: the node rejects histories inconsistent with its chosen checkpoint, while conflicting finalised blocks indicate a consensus failure.2

Pools and liquid stakingReport an errorSuggest an improvement

Staking pools let people participate through a service or contract rather than operate a validator themselves. A liquid staking token represents a claim associated with that arrangement. Ethereum's protocol rewards the validators; it does not directly recognise the holder of a pool token as a validator.3

Pool users inherit validator penalties and add dependencies on contracts, operators, and governance. A liquid token can also trade below the value of its underlying stake, especially when redemptions are delayed or market liquidity is thin. The ability to sell a token is therefore distinct from the ability to redeem the underlying ETH immediately.3

Ethereum's transitionReport an errorSuggest an improvement

The Merge joined Ethereum's existing execution system to the Beacon Chain's proof-of-stake consensus in September 2022. It ended proof-of-work mining on Ethereum. The change did not itself substantially increase transaction capacity or directly lower gas fees; those were separate scaling objectives.4

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ReferencesReport an errorSuggest an improvement

  1. ^ a b c d ethereum.org. Proof-of-stake (PoS). https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/ 

  2. ^ a b ethereum.org. Weak subjectivity. https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/weak-subjectivity/ 

  3. ^ a b ethereum.org. Liquid and pooled staking. https://ethereum.org/en/staking/pools/ 

  4. ^ a b ethereum.org. The Merge. https://ethereum.org/en/roadmap/merge/