# Consensus Mechanism

BounceBit Chain uses a Proof of Stake (PoS) consensus mechanism, where validators are selected to confirm transactions and secure the network based on the amount of cryptocurrency they hold and are willing to "stake" as collateral. In return validators receive transaction fees as staking reward. This system is energy-efficient and encourages participants to act honestly, as they risk losing their staked assets if they are found to be acting maliciously.

In PoS, validators take turns proposing and validating new blocks, making the process faster and more secure than traditional Proof of Work systems. This allows BounceBit Chain to maintain a decentralized and scalable infrastructure while ensuring the integrity and security of transactions across the network.

### Liquid Staking Module and Validator Set

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#### Epoch-Driven Validator Selection and Incentivization

BounceBit’s blockchain operates on an Epoch-based timeline, with each Epoch encapsulating a 24-hour cycle. This systematic approach facilitates the structured selection of validators and the execution of consensus-related operations. Reward distribution, executed at the closure of each Epoch and denominated in BounceBit Tokens, is meticulously calibrated to benefit both validators and stakers, nurturing a cycle of perpetual engagement and network reinforcement.&#x20;

Each Epoch, a new set of active validators is selected. The maximum number of validators in this set is decided by governance. Which validators can join the set is determined by their voting weight. The voting weight takes into account the amount of BB staked by the node operator. If the node operator is not selected, he will be assigned to the candidates set and reevaluated for the next epoch.

### Sustainable Validator Economics:

To try to balance operational requirements, BounceBit empowers validators to impose a commission on staking rewards. This pragmatic approach addresses the economic realities of node operation, ensuring validators are adequately compensated for their critical role in maintaining the network’s robustness and functionality.


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