Proof-of-Stake (or PoS for short) is a consensus algorithm used by cryptocurrencies to process transactions and add new blocks to a blockchain. There are a set of rules for every node in a blockchain network to agree on whether a transaction is valid or otherwise. In the case of cryptocurrency, the database is referred to as a blockchain, and the consensus mechanism protects the blockchain.

PoS depends on validators who possess blockchain-related currency. When using PoS, a validator is selected randomly based on how many coins they have staked or locked up in the blockchain network. When a participant, or node, is chosen to validate a transaction, they are rewarded, and the coins serve as collateral. For PoS to work, multiple validators have to agree that a transaction is accurate, and the transaction will go through when the required number of nodes verify the transaction.