What Are the Economic Incentives for Validators in a Proof-of-Stake System?

Validators are incentivized through staking rewards, which are newly minted coins or transaction fees, for successfully proposing and attesting to new blocks. This reward is proportional to the amount of cryptocurrency they have staked.

Conversely, they face a financial penalty, known as slashing, if they act maliciously or fail to perform their duties, creating a strong economic cryptographic proof of honest behavior.