Proof of Stake (PoS) is a consensus mechanism where participants need to prove they have a stake in order for their claim, or state, to be validated.

In a PoS system, the likelihood of a node being chosen to validate a block is proportional to the amount of cryptocurrency that the node, or a set of nodes, holds. This means that nodes with a larger stake in the network have a higher likelihood of being chosen to validate blocks, and therefore have a greater influence on the network.

In the context of decentralized finance, PoS is often used as an alternative to the more widely-used Proof-of-Work (PoW) algorithm. Unlike PoW, which relies on miners validating new blocks by computing hashes that satisfy a certain difficulty threshold, PoS allows network participants to validate blocks by staking their tokens. This can help to reduce the energy consumption and cost associated with mining, and can also provide an incentive for network participants to hold and stake their tokens.