LeoGlossary: Delegated Proof-of-Stake (DPoS)

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LeoFinance
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An alternative to the Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus mechanisms for blockchains.

With PoS, there is no mining. Instead blocks are produced based upon the number of coins that are staked. Those who stake more coins will increase their chances of being chosen to validate new blocks.

DPoS takes this a step further since many who are staking the coins are not interested in being block producers. Under this mechanism, the responsibility is outsourced (delegated) to those who handle it.

Block producers under this system are elected based upon reputation and trustworthiness and can be voted out by the community. Here is where the incentive for good behavior enters. Anyone who operates against the interests of the chain can be voted out.

Those who are voted in are able to validate the transactions, add new blocks and signal to run new code. This allows the other nodes to maintain the ledgers, keep track of all balances in each wallet.

DPoS relies upon super majority for all base layer changes. For example, once a super majority of the elected block producers signal new code, updates are made to the chain.

The super majority system evens out the votes of the consensus block producers. Vote totals from the community determine who is in consensus. There is no weighted voting in these matters. Each consensus block producer has one vote. Once super majority is reached, the changes go live.

Block rewards are also only factored by consensus or not. The actually amount of votes does not matter. In many system, the rotation for block production will go something like this:

  • 1-20
  • #21
  • 1-20
  • #22

And so on.

Having more votes, either through the coin holding on one's wallet or through delegated vote, affected placement only. Governance issues and the number of blocks produced by those in consensus is not impacted. Thus, large stakeholders have a more difficult time controlling governance on their own. It promotes having to get the agreement from other block producers.

Unlike PoS, those with the most coins in a DPoS system might not have the most influence when it comes to block production. One might be able to buy into consensus but, with the super majority system, each block producer is on parity with the others. The amount of coins voted to that node is of no impact at that point.

The most utilized DPoS blockchain is Hive.

General:

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