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Proof-of-Stake Velocity

1 min read
Pronunciation
[proof-uhv-stayk-veh‑luh‑si‑tee]
Analogy
Imagine a rewards program where you earn points not only for the money you deposit but also for how frequently you use your account.
Definition
A consensus variant that weights validators by both the amount of stake and the velocity (activity level) of their tokens, encouraging active participation.
Key Points Intro
Proof-of-Stake Velocity aligns incentives via:
Key Points

Stake weight: Larger stakes earn more influence.

Velocity factor: Active transfers increase weight.

Anti‑hoarding: Discourages dormant stake.

Dynamic weighting: Adjusts influence based on recent activity.

Example
In a PoSV-based network, validators that both lock tokens and process transactions regularly receive higher block selection probability than idle stakers.
Technical Deep Dive
The protocol computes a score = stake_amount × f(velocity), where f is a decay function of transaction count or coin age decline. Each block election samples validators weighted by this score. Parameters tune epoch length and velocity decay half‑life.
Security Warning
Velocity can be gamed via self‑transfers; rate limits or fee mechanisms are needed to prevent grinding.
Caveat
Complex weighting may reduce transparency and be difficult for users to predict rewards.
Related Terms
Proof-of-Stake
Delegated Proof-of-Stake

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