Proof of Work (PoW) is a consensus mechanism where participants need to prove they have performed some work, or computation, in order for their claim, or state, to be validated.

It is called “Proof of Work” because it requires users to perform a certain amount of computational work in order to complete a block. This work helps to secure the network and prevent fraud, as it makes it expensive and time-consuming for attackers to manipulate the blockchain.

In the context of decentralized finance (DeFi), the security and integrity of transactions on the blockchain is especially important in DeFi applications where large amounts of money can be involved, because as it helps to prevent attacks and fraud that could otherwise jeopardize the integrity of its ledger.