🤝Intro & Evolution of Staking

Decentralized Web3 protocols have emerged as a promising alternative to centralized Web2 platforms. Over the short life of cryptocurrency networks, the consensus mechanism to keep these blockchains secure and balanced has primarily been Proof-of-Work. In recent years, a new form of consensus mechanism known as Proof-of-Stake has emerged that addressed many of the shortcomings of Proof-of-Work (i.e., faster transactions, lower energy use, etc.). However, protocols that use Proof-of-Stake are faced with the challenge of centralization of stake with the largest staking providers controlling the majority of assets. Not only do these large providers earn the bulk of staking rewards but they also control network governance.

Some of the largest and best-known protocols that use Proof-of-Stake as their consensus mechanism include: Ethereum, Solana, Cardano, Polkadot, Polygon, and Cosmos Hub.

Staking is a capital-intensive business, and subsequently, smaller validator operators are unable to compete with the marketing, sales, promotional, development, and other overhead costs of the large providers that have achieved economies of scale.

But that’s where the decentralized protocol of Coaction Network comes in — by providing smaller validators an opportunity to band together and form a union of independent node operators, these smaller operators can create a unique mark and scale through the power of network effects.