Delegated Proof of Stake (DPoS)
DPoS is a twist on Proof of Stake consensus that relies upon a group of delegates to validate blocks on behalf of all nodes in the network. Works using witnesses, who generate blocks. Witnesses are elected by stakeholders at a rate of one vote per share per witness. However, with PoA, the appointment of an authority is automatic, meaning that there can be no bias or uneven process caused by unequal stakes. Coin age is irrelevant. All coins that are mature will add the same staking weight (usually 1 in the wallet hover display). Results in stable, consistent interest only for active wallets and only with small inputs. Downtime and large inputs will significantly impact your interest with DPOS. On the plus side, no age means that moving coins is less costly because lost coin age is not detrimental.
With DPoS blockchain consensus protocols, coin holders use their coin balances to elect delegates, called witnesses. These witnesses have the opportunity to stake blocks of new transactions and add them to the blockchain. Voting power is determined by cyberwealth. Those who have more coins or tokens will have a greater impact on the network that those with fewer.
DPoS is the brain-child of Daniel Larimer, and is actually very different from PoS. In DPoS, token hodlers don’t vote on the validity of the blocks themselves, but vote to elect delegates to do the validation on their behalf. There are generally between 21–100 elected delegates in a DPoS system. The delegates are shuffled periodically and given an order to deliver their blocks in. Having few delegates allows them to organize themselves efficiently and create designated time slots for each delegate to publish their block. If delegates continually miss their blocks or publish invalid transactions, the stakers vote them out and replace them with a better delegate. In DPoS, miners can collaborate to make blocks instead of competing like in PoW and PoS. By partially centralizing the creation of blocks, DPoS is able to run orders of magnitude faster than most other consensus algorithms.
Used in
Users who hold tokens on a blockchain adopting the EOS.IO software may select block producers (the more EOS tokens a stakeholder owns, the greater their voting power)
through a continuous approval voting system and anyone may choose to participate in block production and will be given an opportunity to produce blocks proportional to the total votes they have received relative to all other producers.
At the start of each round 21 unique block producers are chosen.
The top 20 by total approval are automatically chosen every round and the last producer is chosen proportional to their number of votes relative to other producers.
Block should be confirmed by 2/3 or more of elected Block producers.
Block Producer rewarded with Block rewards.
EOS is set to be the first blockchain with block times < 1 second!
Pros
Cheap transactions
Scalable
Energy efficient
Coin age is irrelevant: no age means that moving coins is less costly because lost coin age is not detrimental.
All coins that are mature will add the same staking weight (usually 1 in the wallet hover display).
Results in stable, consistent interest only for active wallets and only with small inputs.
Downtime and large inputs will significantly impact your interest with DPOS.
Cons
Nothing at Stake
Partially centralized
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