LPoS (Leased Proof of Stake)

Unlock the essential crypto terminology for Lumen, providing clear and concise definitions to enhance your understanding of digital assets and blockchain finance.

Leased Proof of Stake (LPoS) is a consensus mechanism used by some blockchain networks to secure transactions and create new blocks. It allows users to lease their staking power to others, enabling them to participate in the block validation process without needing to maintain a full node.In LPoS, users hold a native cryptocurrency in their wallets and can choose to lease their staking rights to a particular node. This node uses the combined staking power from various users to increase its chances of validating blocks and earning rewards.Participants who lease their stakes receive a portion of the rewards generated by the node they support. This system promotes decentralization and allows users with smaller amounts of cryptocurrency to participate in staking, increasing overall network security.LPoS is considered more inclusive, as it enables more people to take part in the staking process, fostering a wider distribution of influence within the network. It also helps smaller holders benefit from staking rewards, even if they do not have enough tokens to meet the typical requirements for running a validator.

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