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Leased proof-of-stake (LPoS), explained

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Understanding leased proof-of-stake

LPoS is a type of PoS meant to increase mining power, address inherent issues found in PoW, and improve other types of PoS, such as delegated proof-of-stake (DPoS).

Regular cryptocurrency users have probably come across the term proof-of-stake (PoS) when dealing with crypto staking, but what is leased proof-of-stake (LPoS), and is there a connection between the two?

Yes, they are related, as LPoS is simply a variant of the PoS system. Proof-of-stake is a key element of the blockchain consensus mechanism, where validators participate in staking to generate and validate transaction blocks.

Validators on proof-of-stake platforms typically have to stake more cryptocurrency to improve their chances of block generation, and here is where LPoS comes in handy. Tokenholders who don’t have the technical know-how or financial muscle can lease their tokens to validator node operators, enhancing the validator’s chance to receive the opportunity to create new blocks. In return, they will earn a share of the transaction fee paid to the validator.

In an LPoS environment, tokenholders can lease their stake or run a full node. However, the more tokens staked by a node, the better its chances of being selected to generate a new block. LPoS allows users to acquire the proceeds of mining without going through the mining process.

How leased proof-of-stake works

 LPoS operates on the same premises as a lottery in that more stakes increase someone’s chances of winning rewards.

So, how does leased proof of stake work? The LPoS system follows a series of set processes:

  • Create a lease transaction: Tokenholders lease coins to a node, specifying the amount and recipient address. Leases can be canceled at any time.
  • Wait for block generation: Leased funds join a node’s pool, increasing the chance of winning the next-block lottery.
  • Consensus participation: LPoS lets leasers join the consensus process; larger nodes have better odds of generating the next block.
  • Generate blocks: Winning nodes validate transactions, compile them into blocks, and earn transaction fees as rewards.
  • Share rewards: Node operators distribute rewards to leasers based on their investment, with higher stakes leading to more substantial rewards.

Please note that the leased tokens never actually leave the leaser’s hardware wallet and remain in total control of the tokenholder. The holder only links the chosen node(s) and doesn’t transfer the tokens to the said node.

No party can trade or transfer the tokens, including the holder. The holder can only transact or spend the allotted coins upon canceling the lease. 

Key features of leased proof-of-stake

Some of the features of LPoS include decentralization, balance leasing, fixed tokens and scalability. 

The main features of LPoS include:

Balance leasing 

Leased tokens do not transfer to validators, nor can they be traded. Users can lease out their tokens and money from cold storage or wallets.

Decentralized

LPoS divides rewards based on the staked amount, doing away with the need for a mining pool. It’s also great for blockchain governance, as it uses a peer-to-peer protocol to prevent third-party intervention.

Unpredictable block generation

There’s no way to predict who will win the right to generate the next block. The only thing worth noting is that the bigger a node’s economic stake, the greater its chances of winning the right to generate the next block.

Fixed tokens

Mining does not add more tokens to LPoS, as the system only allows token leasing.

Scalability

Developers of LPoS prioritize high-on-chain scalability over second-tier apps.

Rewards

Other blockchain systems offer block token rewards, but LPoS issues transaction fees to reward successful node operators.

The role of LPoS in blockchain validation

LPoS is a type of PoS used to validate cryptocurrency transactions in a blockchain network. 

LPoS utilizes nodes or network devices to verify and validate blockchain transactions. Node-based validation uses computational randomness, hinged on the financial stake of a node, to assign rights to validate blockchain transactions.

A PoS consensus algorithm relies on these factors to determine what node is best fit to validate transactions at any given time:

  • Age of tokens: The longer the staked tokens remain unused on the LPoS platform, the better the chances of being selected to validate the next transaction. The instant the stake verifies LPoS transactions, its age resets to zero.
  • Size of stake: The greater the stake, the better the chance of validation selection.

PoS uses passive cryptocurrency deposits rather than the raw computational power in mining hardware used in proof-of-work (PoW) systems, making PoS more resource-efficient than PoW.

Currently, two leading blockchains use LPoS. The first is the Waves blockchain, which uses the LPoS consensus algorithm to verify the blockchain’s state by allowing users to lease tokens to generating nodes and receive rewards distributed by these nodes. Finally, Nix utilizes a permissionless staking mechanism that allows users to stake through a different third-party wallet, with the third party responsible for the staking.

NIX LPOS wallet

Benefits of leased proof-of-stake

The many benefits of LPoS stem from gaining rewards without actively trading, increasing your chances of receiving rewards by joining a larger node, and the inherent security features hard-baked into the LPoS process.

One can realize several benefits from engaging in LPoS:

Passive investment 

Users can participate in block generation and receive some rewards without actually participating in the block-generating process.

Allows smaller investors to participate

LPoS protocols contain a minimum investment requirement for network participation. For instance, Waves only allows a node to participate in block generation if it has a minimum of 1,000 Waves (WAVES). Investors with less than this can lease cryptocurrency tokens to more prominent nodes for a chance at gaining rewards.

Difficult to manipulate

The LPoS generating balance rule calculates the lowest balance after considering leasing in the latest 1,000 blocks, thwarting manipulation attempts by moving funds between accounts.

Increases chances of winning rewards 

The LPoS works in a way that rewards nodes with the most significant economic stake in the network. Therefore, leasing tokens to a bigger node increases the chances of receiving rewards than if the leaser decided to go solo.

Retain ownership

No one can trade or transfer the leased tokens (which won’t even leave the wallet), minimizing the chances of loss.

Low barrier to entry

It does not require mining hardware to participate in validation.

LPoS crypto mining alternatives

Alternatives to LPoS that utilize PoS include delegated proof-of-stake, pure proof-of-stake and proof-of-validation.

While technically not a way to mine cryptocurrencies, PoS allows users to validate transactions and create new blocks on a blockchain. LPoS enables users to lease crypto tokens to nodes that validate LPoS transactions.

Several alternatives to LPoS allow users to make use of the PoS consensus mechanism:

Delegated proof-of-stake (DPoS)

Users can delegate the production of new blocks to delegates or witnesses through a democratic voting system, with votes weighted by the number of tokens held on a platform.

Pure proof-of-stake (PPoS) 

This one is mainly used by the Algorand blockchain for the development of decentralized applications (DApps). Users can cast their votes to select representatives who vote on proposals and propose new blocks.

Proof-of-validation (PoV)

This aims to achieve consensus through staked validator nodes. The number of tokens staked with each validator determines the validator’s voting numbers. When a validator with a minimum of two-thirds of the network’s total voting submits a commit vote on a block, that validates the new block.

Hybrid proof-of-stake (HPoS) 

Some LPoS protocols leverage the power of PoS and PoW. They use PoW to create new block housing transactions and use PoS to validate the blocks.

Cryptocurrency

Bitcoin to $500K, Ethereum to $20K? Analyst Forecasts a Major Crypto Surge

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Crypto analyst Michaël van de Poppe has made a bold prediction, forecasting that the price of Bitcoin could reach $500,000, with Ethereum’s soaring past $20,000 in the coming years.

His outlook, supported by macroeconomic trends and growing institutional adoption, suggests that the crypto market is on the cusp of an unprecedented rally.

Overcoming ‘Bear Market PTSD’

Market sentiment is currently quite low following one of the biggest daily sell-offs in crypto history, which saw more than $400 billion wiped off in less than a day. However, while Van de Poppe acknowledges the bearish outlook, he argues that the market is primed for a major bull run.

According to him, a “perfect storm” is brewing, fueled by growing institutional adoption and the U.S. government’s more tolerant stance on crypto. This includes a proposal for a national digital asset stockpile. Additionally, institutions are launching crypto products providing greater market access and banks have been given the leeway to offer custody services following the SEC’s revocation of SAB 121.

Van de Poppe admitted that many investors were skeptical, still haunted by past downturns, a phenomenon he called “bear market PTSD,” which makes it hard for traders to believe in a long-term uptrend. Nonetheless, he argued that Bitcoin and Ethereum’s trajectories should not be judged by past cycles alone, especially given their increasing global adoption and the ongoing influx of institutional capital, including millions spent on crypto by an organization linked to U.S. President Donald Trump.

A shifting macroeconomic landscape could also boost crypto’s explosion. The analyst suggests that China’s economic strategy to deal with Trump’s new tariffs could create the perfect condition for altcoins to thrive.

In his opinion, the Asian giant has two options to counter the U.S.: devalue its currency to continue exporting products into the United States or focus on its own domestic market to become stronger. If it chose the second option, it would mean selling its dollar reserves, buying back the renminbi, and making it solvent.

Such a situation, in Van de Poppe’s opinion, would cause the dollar to lose some of its strength, and a weaker dollar coupled with lower yield bonds often leads to increased capital flow into digital assets.

Exponential Gains

Taking everything into consideration, Van de Poppe outlined two likely possibilities. In the blow-off top scenario, he envisions a rapid bull run, similar to the dot-com boom of the ‘90s, which could see BTC shoot up to anywhere between $300,000 and $500,000 before a sharp correction.

Ethereum would follow suit and could climb past $20,000 with the acceleration of institutional adoption, potentially powered by its new marketing initiative, Etherealize.

The second option would be an extended supercycle, leading to a slower but self-sustaining rally that could drive Bitcoin’s value towards $1 million over the next few years. ETH would also benefit from taking advantage of the expected growth of layer-2 networks and institutional DeFi integration to push to $30,000.

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Cryptocurrency

Dogecoin Whales Make a Huge Move: Is DOGE’s Price Poised for a Rally?

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TL;DR

  • Large investors bought 750 million DOGE during the recent dip, potentially setting the stage for a price rebound.
  • While some analysts expect a further drop to $0.17, historical trends suggest the possibility of another explosive bull run for Dogecoin in the coming months.

Time for a Reversal?

The cryptocurrency market has suffered substantial losses in the past week, mainly due to the crash witnessed on February 3. Bitcoin (BTC) is down 6% for that timeframe but it was the altcoins that took the major hit.

The OG meme coin, Dogecoin (DOGE), was among the biggest losers, with its price plunging well below $0.30 and tanking by 21% weekly (per CoinGecko’s data).

DOGE Price
DOGE Price, Source: CoinGecko

However, it seems like whales have interpreted the downtrend as a “buy the dip” opportunity and increased their exposure to the asset. X user Ali Martinez revealed that large investors purchased 750 million tokens (worth almost $200 million) during the correction. “This is a strong sign of confidence in the market,” the analyst claimed.

Whale accumulation is often seen as a bullish signal since it could make some traders follow suit and thus trigger a potential price uptrend. The buying spree also leaves fewer assets available on the open market, meaning DOGE’s valuation might head north (assuming demand remains constant or increases).

The whales’ latest actions contrast to those at the beginning of the month. Back then, they offloaded 270 million DOGE in the span of 24 hours, which was shortly after, followed by a price decline. 

DOGE Predictions

The meme coin’s market dynamics have caused numerous people to speculate on its next potential move. The X user AMCrypto assumed that DOGE might be headed for a further decline to as low as $0.17 before rallying toward a new all-time high.

Trader Tardigrade and KALEO also chipped in recently. The former forecasted a massive bull run, citing the token’s historical performance:

“In the 2016 pullback, DOGE retraced 59.76%, followed by a +9,221% bull run. In the 2020 pullback, DOGE retraced 56.2%, followed by a +30,693% bull run. When in doubt, check the macro chart.”

KALEO was bullish, too, seeing $0.25 as “a solid entry and practically free compared to where we’ll see it a few months from now.” 

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Academic Labs to Be Listed on Bitpanda, Unveils AI-Powered Education Whitepaper 2.0

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[PRESS RELEASE – Singapore, Singapore, February 6th, 2025]

Academic Labs, a notable innovator in the education sector, has announced its listing on Bitpanda, one of Europe’s largest cryptocurrency exchanges. This milestone follows the release of Whitepaper 2.0, which details advancements in its EduFi Ecosystem, built on the Solana blockchain. The whitepaper introduces the AAX Chain and the AI-Agent layer, two innovations aiming to transform education by harnessing AI and Web3 technologies. Notably, Academic Labs has demonstrated remarkable potential, with its cryptocurrency volume doubling and rising by 70% even when the market was down, indicating strong prospects for 2025.

Whitepaper 2.0 introduces two innovations: the AAX Chain and the AI-Agent layer. The AAX Chain, built on the Solana blockchain, harnesses its high-speed, low-cost, and scalable infrastructure to optimize educational resources and facilitate seamless knowledge discovery, curation, and sharing. The native AAX Token, following the SPL token standard, serves as the lifeblood of the ecosystem, enabling value exchange, governance, and incentivization.

The AI-Agent layer enhances personalized learning by leveraging the power of advanced machine learning algorithms. By analyzing large amounts of data from the Universal Library of Knowledge and the comprehensive Learner Data Layer, the AI-Agent generates adaptive learning paths, content recommendations, and targeted support, ensuring that each learner receives a tailored educational experience.

Whitepaper 2.0 also highlights the integration of decentralized identity (DID) within the Academic Labs EduFi Ecosystem. Leveraging the Solana blockchain’s capabilities, learners can create and manage their digital identities securely and transparently, empowering them to showcase their achievements and skills across various platforms while maintaining control over their educational data.

Furthermore, the whitepaper explores the incorporation of decentralized science (DeSci) and decentralized finance (DeFi) applications within the ecosystem. By tapping into Solana’s robust DeFi infrastructure, Academic Labs offers learners and educators novel opportunities to engage with tokenized assets, participate in yield farming and staking programs, and access innovative funding models for educational projects and research endeavors.

The tokenomics of the AAX Token, as detailed in the whitepaper, ensure the long-term sustainability and growth of the Academic Labs EduFi Ecosystem. With a carefully designed token allocation and unlocking schedule, the ecosystem is structured to align incentives and foster long-term commitment to the platform’s success.

Prior to Whitepaper 2.0, Academic Labs had already made steady progress in the EduFi space, launching a successful MVP, hosting hackathons and courses at top universities, and empowering various ecosystems with more than 2 million people.

The whitepaper outlines an ambitious timeline for expanding the Academic Labs EduFi Ecosystem. The platform plans to launch a suite of new products powered by AI and gamification functions in the coming months, enhancing user engagement and learning outcomes. Additionally, Academic Labs aims to secure new listing opportunities for the AAX Token across global cryptocurrency exchanges, increasing liquidity and accessibility for users worldwide.

Following the prior listing on Gate.io, on February 7th, Academic Labs will be listed on Bitpanda, one of Europe’s largest cryptocurrency exchanges. This represents a key step in Academic Labs’ efforts to expand its education-focused initiatives through Web3 and AI.

With the introduction of the AAX Chain, AI-Agent layer, and the planned expansion of its product offerings and token listings, Academic Labs aims to develop AI-driven solutions for the education sector. The integration of advanced technologies, along with the platform’s existing ecosystem, supports its ongoing efforts to enhance digital learning experiences.

About Academic Labs:

Platform: https://acad.live

X: https://x.com/Acad_Labs

CoinGecko: https://www.coingecko.com/en/coins/academic-labs

Gate: https://www.gate.io/tr/trade/AAX_USDT

Bitpanda: https://www.bitpanda.com/en/bitpanda-spotlight

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