In proof-of-stake networks, validators take on the role that energy-intensive miners perform in proof-of-work systems. Instead of competing to solve computational puzzles, validators are selected to propose or confirm new blocks based partly on the amount of the network's token they have staked, and they earn rewards for performing this role correctly and reliably over time, while facing penalties for failing to do so or for acting dishonestly.
Many networks also let regular token holders delegate their stake to a validator they trust, sharing in the rewards without needing to run the technical infrastructure themselves. This makes staking accessible to people who do not want to operate a validator directly, though it introduces a dependence on choosing a competent and honest validator to delegate to, since the delegator's rewards and risk depend on that validator's behaviour.
Running or delegating to a validator carries some risk. Validators that go offline, misbehave, or act maliciously can be penalised through a mechanism often called slashing, which can cost the validator, and sometimes the people who delegated to them, a portion of the staked funds. Choosing a validator with a reliable operating history, transparent fees and sound infrastructure is part of managing that risk when delegating stake.
Key takeaways
- Validators verify transactions and propose blocks in proof-of-stake networks by staking the network's native token as collateral.
- Token holders can often delegate their stake to a validator and share in rewards without running the infrastructure themselves.
- Poor validator performance or misbehaviour can trigger slashing penalties, a real risk worth weighing when choosing who to delegate to.
Validator — frequently asked questions
What is slashing?
Slashing is a penalty that removes a portion of a validator's staked tokens for actions such as extended downtime or attempting to validate conflicting transactions. It is designed to discourage behaviour that would harm the network.
Do I need technical skills to become a validator?
Running your own validator typically requires technical setup, reliable infrastructure and ongoing maintenance. Many people instead delegate their stake to an existing validator, which requires no technical operation on their part beyond choosing who to delegate to.
New to crypto, or filling in the gaps? Work through the essentials in Learn, browse every term A–Z, or see live prices for the coins these concepts power.