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I came to learn alot about benefit for proof of stake on Ethereum (staking ether); however, I'm still bit unclear about how that would be applied for ERC-20 Tokens built on top of Ethereum protocol.

Lets assume I have built token called HAPI on Ethereum,

1) Who is responsible to validate transactions that happen between HAPI?

2) Is validation done by the Ethereum protocol, thus using Ether to do so?

3) If that is the case, is there such thing as "staking tokens" for HAPI? is there incentive for HAPI holders to stake their tokens?

4) I've read some article where staking token means, when you stake your token and that token is converted into Ether and is available for staking. If this is true, will the price of HAPI fall if alot of people decide to stake HAPI because HAPI is being converted to Ether to stake?

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1) Who is responsible to validate transactions that happen between HAPI?

The Ethereum miners validate all transactions on the ethereum blockchain. Since "HAPI" will exist on the Ethereum blockchain, all of its transactions are validated by those same miners.

2) Is validation done by the Ethereum protocol, thus using Ether to do so?

Yes. Every call to a smart contract have a "gas" cost.

3) If that is the case, is there such thing as "staking tokens" for HAPI? is there incentive for HAPI holders to stake their tokens?

If you wanted to have any sort of "staking," you would need to implement it in the smart contract. But since the validations are already being verified by Ethereum miners, it doesn't make much sense to add a feature like that.

4) I've read some article where staking token means, when you stake your token and that token is converted into Ether and is available for staking. If this is true, will the price of HAPI fall if alot of people decide to stake HAPI because HAPI is being converted to Ether to stake?

Not sure what you mean by this. If you could provide an link to that article, I could help you parse through it?

Hope this helps.

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