What is a Proof-of-Stake protocol?

Networks such as Bitcoin function because they have miners who are willing to leverage their computing power to process transactions and safeguard the blockchain. This process is known as Proof-of-Work (POW).

Many newer blockchains utilize a different form of achieving consensus, known as Proof-of-Stake (POS), to process transactions. POS is a much less energy-intensive process.

It works like this:

Instead of high-powered nodes processing transactions in exchange for compensation, clients on the POS blockchain or network post a percentage of their crypto holdings as a form of ‘collateral’ to achieve the same result.

Clients who ‘stake’ their crypto holdings on a POS network can earn additional assets as a reward for doing so.

Assets listed on Kraken that currently utilize a POS protocol include but are not limited to Tezos, Cosmos, Cardano and EOS.

Related support articles:

Onchain staking

How to stake