What is Leased Proof of Stake (LPoS)?

Leased Proof of Stake (LPoS) is a consensus mechanism that extends the traditional Proof of Stake model by allowing token holders to lease their cryptocurrency balances to full nodes. These full nodes use the combined staking power from multiple leasers to validate transactions and produce new blocks. The leasing process is non-custodial, meaning the tokens never actually leave the owner's wallet — only the staking rights are temporarily delegated to the node operator.

The primary advantage of LPoS is that it enables smaller token holders to participate in network validation and earn rewards without needing to run a full node themselves. This lowers the barrier to entry and promotes greater decentralization compared to standard PoS systems where only large stakeholders can meaningfully participate. The trade-off is that the network's security still depends on the reliability and honesty of the full nodes that receive leased stakes, creating a degree of trust delegation.

The most prominent blockchain using Leased Proof of Stake is Waves, which pioneered this consensus approach. On the Waves platform, users can lease their WAVES tokens to node operators and receive a share of the transaction fees and block rewards in return. The mechanism has proven effective for maintaining a balance between accessibility for everyday users and robust network security, making it a notable innovation in the staking landscape.