Proof of Stake Authority (PoSA)

Proof of Stake Authority (PoSA) is a hybrid consensus mechanism that blends delegated proof of stake with proof of authority. It is best known as the design behind BNB Smart Chain, launched by Binance in 2020. Holders stake the network's token, BNB, to support validator candidates, and the candidates with the most stake form a limited active set that takes turns producing blocks, as in authority-based systems where producers are known and accountable. Validators earn transaction fees, and misbehaviour such as double signing or long downtime can lead to penalties and loss of stake. The small validator set allows short block times and low fees and keeps compatibility with Ethereum tools. The trade-off is decentralisation: with relatively few validators, critics argue that control is concentrated and that coordinated action, such as halting the chain, is easier than on more open networks. Also see consensus mechanism.