Proof-of-work and proof-of-stake have a lot of benefits to offer the community, and the discussion around these algorithms has dominated conversations in the cryptocurrency community. The use of staking will become more widespread this year on the protocol level with Ethereum 2.0’s expected arrival, along with the continued development of Cardano, Tezos and Algorand, ultimately changing the landscape of the future networks and blockchains. On the other side of the protocols is the mad rush for the hyper gains from decentralized finance projects that utilize high yield farming from loans, which will further the adoption of these staking protocols.
How are existing PoS projects handling staking and returns? Delegated proof-of-stake uses a fixed number of delegates that are selected to create blocks. These delegates are selected based on a voting system in which users are given a number of votes proportional to the number of tokens they own. Delegates, sometimes called witnesses, are tasked with consensus during the generation and validation of new blocks. Rewards are typically shared among those who voted.
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