How Does a Validator’s Stake Act as a Security Bond in a PoS System?
A validator's staked tokens serve as a mandatory security bond, or collateral, that must be deposited to participate in block validation. This capital is locked up and acts as an economic commitment to honest behavior.
If the validator acts maliciously, such as attempting a double-spend or creating a conflicting block, the protocol automatically seizes (slashes) a portion or all of this stake. The potential loss of this bond is the primary economic incentive for the validator to maintain the network's integrity, ensuring their self-interest aligns with the network's security.
Glossar
Validator
Role ⎊ A validator is a critical network participant in a Proof-of-Stake blockchain responsible for proposing, verifying, and attesting to new blocks of transactions to maintain consensus and secure the distributed ledger.
Bond
Valuation ⎊ A bond, within the context of cryptocurrency derivatives, represents a debt instrument referencing an underlying asset ⎊ often a stablecoin or a basket of crypto assets ⎊ with a predetermined repayment schedule and interest rate, functioning analogously to traditional fixed-income securities but introducing counterparty risk specific to the digital asset space.
Economic Commitment
Capital ⎊ Economic commitment represents the quantifiable financial resource a participant dedicates to entering and maintaining a position in a derivatives contract.
Security Bond
Collateral ⎊ In the context of cryptocurrency derivatives and options trading, a security bond functions as a specialized form of collateralization, distinct from traditional fiat-backed securities.