Description: Automatic rewards in the context of ‘Proof of Stake’ (PoS) are incentives automatically distributed to participants in a blockchain network, based on the amount of cryptocurrency they hold and are willing to ‘stake’ or lock in the system. This mechanism aims to encourage active participation and network security, as users who contribute their assets have the opportunity to be selected to validate transactions and, in turn, receive rewards in the form of new coins or transaction fees. Unlike ‘Proof of Work’ (PoW), where miners compete to solve complex mathematical problems, PoS allows participants to be chosen to validate blocks based on their stake, resulting in significantly lower energy consumption. Automatic rewards are thus a way to incentivize users to keep their assets in the network, promoting stability and growth of the ecosystem. This system benefits participants and contributes to the decentralization and security of the blockchain by encouraging more users to engage in the validation and governance process of the network.
