Intro
PoS (Proof-of-Stake) secures networks through tokenomics. To participate in PoS consensus, nodes must voluntarily bond tokens as stake, in terms of their stake in the game. The action of bonding tokens is called staking.
Staking allows the network to create a self-reinforcing incentive system: participants may earn token rewards as the incentive for participation, while facing significant penalties against for malicious actions as the incentive for acting honestly.
For various reasons, the token used for validator/collator staking isn’t necessarily the native token, e.g., Elysium validators must stake $PYR (Vulcan Forged) instead. This applies to rewards as well, e.g., SORA rewards validators with $VAL instead of the native token $XOR which is too volatile to maintain a stable validator set.
Within the Substrate ecosystem, actors who participate in PoS consensus are known as validators (on relay chains) and collators (on parachains), each bearing different responsibilities. A collator is responsible for collecting and executing transactions from a parachain, producing unsealed blocks along with state transition proofs that are then submitted to relay chain validators for verification.
There is a minimum self-bond required to register as a validator or collator candidate. The amount varies across different blockchains, which can go as low as 0.
Each session, among the candidates, a set of validators or collators are elected to participate in consensus, forming the active set. Only validators or collators in the active set will produce blocks, vote for blocks produced by others, and earn rewards.
The active set has a predefined number of seats. Validators are typically elected based on their total stake until all seats are filled. In other words, the elected validators are those with the highest stakes among all candidates.