Stakers

Who are Stakers?

Stakers are individuals who lock up or delegate Aleo Credits (ACs) to support validators in participating in consensus on the Network. They are rewarded based on the amount of ACs they have staked, reflecting their contribution to consensus. This gives a chance for users who do not run a validator node to participate in the consensus process and earn rewards.

Stakers can be any person or organization that holds ACs. Staking is available starting from 10,000 AC. There will be tools provided by the Aleo ecosystem like staking platforms, or from supporting wallets. Note that these are 3rd party tools built by the Aleo ecosystem and Aleo does not endorse, review or vet these tools and user should be responsible for their own operations.

Why do we need staking?

Staking is necessary to secure a decentralized network that is using Proof of Stake (PoS) as its consensus mechanism. Unlike proof of work (PoW) where miners are competing to solve a cryptographic puzzle to add a block to the blockchain, PoS selects validator randomly every block to confirm transactions and validate block information. This system randomizes who gets to collect fees rather than using a competitive rewards-based mechanism like proof-of-work.

To become a validator and participate in the consensus process, a minimum of 10,000,000 ACs is required. This is to ensure that the network is economically secure by validators that have significant stake in the network. However, not everyone has all the resources themselve to become a validator, so staking allows users to delegate their ACs and help activating validators to participate in the consensus process.