In the proof-of-stake model used by Ethereum, stakers secure the network by locking up ETH to validate transactions. This system mirrors the structure of a security, where shareholders exert influence and earn rewards based on their investment level.

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In the proof-of-stake model used by Ethereum, stakers secure the network by locking up ETH to validate transactions. This system mirrors the structure of a security, where shareholders exert influence and earn rewards based on their investment level.

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In a proof-of-stake consensus model, blocks are confirmed not by miners but by stakers—people holding large amounts of the native token (in this case, ETH) that they lock in the network. This fact—which now is key for the operation of the Ethereum blockchain—resembles the nature of a security in which large shareholders decide how a business works and get rewarded for their investments.

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Ethereum ETF approval uncertain amid SEC concerns

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Ethereum News

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What is the reason Ethereum might be classified as a security?

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