Proof of stake is a way for a blockchain network to agree on which blocks and state changes to recognize. In simple terms, protocol rules assign work to validators, use staked assets as part of the participation model, and determine how proposed blocks are checked and accepted. The exact process differs by network; this explanation uses Ethereum and Tezos examples only where noted.

What proof of stake means

A blockchain records transactions and changes to its shared state in blocks. Consensus is the network process for agreeing on which blocks belong to the recognized history. In proof of stake, participants commit cryptocurrency as stake, and that stake influences consensus participation or weight under the protocol’s rules. The selection, voting, custody, reward, penalty, and withdrawal rules are specific to each network. source

A validator is a participant assigned protocol duties related to checking, proposing, or voting on blocks. The term does not mean every participant who holds the network’s token is a validator. A block proposal is a candidate block submitted under a network’s rules. An attestation is a validator’s protocol-defined statement or vote about the chain; what it covers and how it counts depend on the network.

Proof of stake is not one identical procedure shared by every blockchain. For example, Tezos documentation describes consensus participation rights as selected from delegates according to protocol-defined baking power and pseudorandom selection. That is a Tezos-specific description, not a universal selection rule. source

How validators use staked assets

Validators perform duties assigned by their network. In Ethereum, validators check and attest to valid blocks and may propose a block when selected. Ethereum uses ETH deposits as slashable economic collateral for validator participation. source

Here, collateral means an asset commitment recognized by the protocol in connection with participation. It does not certify that a validator will act honestly, nor does simply holding ETH make someone a validator. The protocol defines which accounts participate, what duties they have, and what consequences apply to specified conduct or inactivity.

It is useful to separate three roles in the basic model: the protocol defines the rules; validators perform assigned consensus duties; and other network participants check proposed changes against their own applicable rules. The details vary, so an explanation of Ethereum’s validator role should not be treated as a description of every proof-of-stake network.

Proof of stake simple explanation: the block-agreement sequence

A simplified sequence looks like this:

  1. The protocol assigns participation. Network rules determine which validators have duties for a given part of the process. Selection methods are not uniform across networks. Tezos, for example, uses its own rules for selecting consensus participation rights. source
  2. A validator may propose a block. A proposal is a candidate addition to the chain, not an automatic decision that the block is valid or final.
  3. Validators check and signal agreement. In Ethereum, validators check and attest to valid blocks. An attestation contributes to the protocol’s consensus process; it is not, by itself, a universal guarantee that every network has accepted or finalized a block. source
  4. The protocol applies its acceptance and finality rules. Ethereum combines validator attestations, a fork-choice rule, and checkpoint finality under protocol-defined supermajority conditions. In that design, checkpoint votes help distinguish finalized history from blocks that are merely included. Other proof-of-stake networks can use different rules. source
  5. Participants verify according to their roles. A validator’s proposal or vote is part of the process, but the network’s rules—not a validator’s claim alone—determine whether a block is accepted.

This sequence is a mental model, not a universal checklist with identical steps on all chains. The key idea is that stake informs participation under a protocol, while assigned validator duties and the network’s agreement rules determine how a proposed history is evaluated.

What happens when validators break the rules

Some proof-of-stake protocols attach consequences to defined behavior. Ethereum’s validator incentives include rewards for correct participation, missed rewards or penalties for inactivity, and slashing for specified conflicting proposals or attestations. No current reward rate is implied here, and other protocols differ. source

Slashing is a protocol-defined penalty associated with specified validator behavior; it should not be treated as a rule that applies to every proof-of-stake system. Inactivity penalties and slashing are also distinct: one concerns failing to perform assigned duties, while the other applies to specified conflicting messages under Ethereum’s rules. The applicable behavior and consequence must be read from the network’s own protocol documentation.

Stake therefore functions as part of a network-specific participation and incentive design, not as proof that validators cannot misbehave. The existence of protocol penalties does not establish that a system is risk-free or that every failure can be remedied.

What this explanation does not establish

Consensus mechanics explain how a network coordinates agreement; they do not establish a validator service’s availability, fees, returns, or the conditions for accessing assets. Those questions require evidence about the particular network or service, and they are outside this explanation. Similarly, the consensus model alone does not determine tax or regulatory treatment in any jurisdiction.

The practical takeaway is narrow: proof of stake uses protocol-defined validator duties and staked assets to organize participation in block agreement. To understand a specific chain, check its own rules for validator selection, proposals, attestations or votes, acceptance and finality, and penalties. Ethereum and Tezos illustrate particular designs; neither example should be read as a rule for all proof-of-stake networks.

Sources and references