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What’s at stake? The legal treatment of staking
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Since 15 September 2022 the majority in number and value of blockchain systems are secured by proof-of-stake consensus mechanisms. Yet the legal treatment of staking has received little attention. Further confusion is caused by the fact that the use of the word “staking” has generally focussed on the existence of a return rather than consideration of how that return is generated. For this reason the term “staking” is now used to refer to a range of materially different activities from staking for the purposes of validating a blockchain protocol (the primary focus of this article) to staking referring to DeFi lending and staking as used as a rewards system in NFT markets or online games. This article considers the features of different staking arrangements describes some of the potential legal consequences of those arrangements and identifies issues that might arise as proof-of-stake consensus mechanisms evolve....
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