Every blockchain has its own consensus mechanism protocol, and as new blockchains emerge, they will have more advanced consensus protocols. These protocols are used in the blockchain network to validate transactions. Delegated Proof Of Stake is one of the consensus mechanism protocols (DPoS).
Delegated proof of stake (DPoS) is a type of consensus algorithm that blockchain networks use to agree on the state of a leger. It empowers a subset of network participants known as “delegates” to act on the network’s behalf. Slide down to know more about the delegated proof of stake.
What Is Delegated Proof of Stake (DPoS)?
Delegated proof of stake (DPoS) is a consensus algorithm that makes blockchain networks more scalable and decentralized. There are two types of users on the network with the delegated proof of stake, or DPoS: delegates and voters.
Delegates are elected by voters and can be replaced if they fail to fulfill their responsibilities adequately. The delegate’s job is to secure the network and ensure the validity of all transactions.
Users must first stake their tokens in a delegates’ pool in order to become delegates. They can vote for delegates after they have staked their tokens. The delegates with the most votes are then chosen to validate transactions and create blockchain blocks.
Voters are network users who have not staked their tokens in a delegates’ pool. Voters can cast ballots for delegates but cannot become delegates themselves.
How Delegated Proof of Stake (DPoS) Works
Delegated Proof of Stake was designed in such a way that it relies on the authorization voting of coin holders to achieve consensus within the system. In comparison to the PoS model, DPoS is entirely different, and a coin holder in the DPoS model is any person who owns the number of coins or tokens in their digital crypto wallet.
They will be able to vote and choose a delegate (block producer, witness). Actually, the person who receives the most votes at the end of an election round is chosen to be the network’s block producer. The functioning of Delegated Proof Of Stake (DPoS) has been explained and broken down into the following stages:-
Users must ‘vote’ to select ‘witnesses’ in the Delegated Proof Of Stake (DPoS) consensus protocol (who are other users that they trust to validate transactions). The witnesses with the most votes are granted the authority to validate and verify transactions in the blockchain network. Users can even delegate voting power to other users they trust to vote for witnesses on their behalf.
The size of each voter’s stake in the crypto coins is used to weigh votes. A user with a small stake can even make it to the top tier of witnesses.
However, votes from users with large stakes can result in votes from users with relatively small stakes elevating them to the top tier of witnesses as votes are weighted according to the size of the stake.
Voting is a continuous process, and each top-tier witness is always at risk of being replaced by a user who receives more votes and is thus more trusted. As a blockchain grows in popularity, it becomes more difficult to become or remain a top-tier witness. Users can also vote to remove a top-tier witness who has lost their trust.
Every blockchain has its own set of rules. In most cases, the number of witnesses in the top tier is limited (discussed below, keep reading). These witnesses are in charge of validating and verifying transactions, as well as creating blocks, and are compensated with crypto coins as fees.
In DPoS, “Witness” is equivalent to “Miner” in PoW. Top-tier witnesses can prevent specific transactions from being included in an upcoming block, but they cannot change the details of any transaction. However, because DPoS is a democratic protocol, any witness engaging in malicious behavior can be removed.
Furthermore, because voting is a continuous process in the DPoS network, a poor reputation will have an impact on the witness election. Dethroning a witness will result in a loss of income, so all witnesses will usually act in their best interests. This is how DPoS achieves democracy.
Delegates are the trusted parties in charge of network maintenance. The delegates are in charge of the overall governance and performance of the blockchain protocol, but they do not participate in transaction validation or block production.
Delegates can, for example, propose changing the size of a block or the amount a witness should be paid in exchange for validating a block. When the delegates propose such changes, the blockchain’s users vote on whether they should be implemented. These delegates are also elected through voting by users.
A delegate must demonstrate commitment in some DPoS versions by depositing funds into a time-locked security account (which is confiscated in case of malicious behavior). This type of DPoS is also known as deposit-based proof of stake.
Advantages of Delegated Proof Of Stake (DPoS)
The following are the benefits of the Delegated Proof Of Stake (DPoS) consensus protocol:
- DPoS is more efficient than traditional Proof of Work and Proof of Stake systems.
- Unlike PoW, DPoS does not require a large amount of electricity.
- Similarly, no special or expensive hardware or software is required to become a user, witness, or even delegate. A standard, technologically updated computer is sufficient.
- The incentives and structures of DPoS improve the security and integrity of their blockchains, and each user has an incentive to play their role honestly.
Disadvantages Of Delegated Proof Of Stake (DPoS)
The following are some of the drawbacks of the Delegated Proof Of Stake (DPoS) consensus protocol:
- There is not enough decentralization. The greater the number of validators, the more decentralized the blockchain. However, increasing the number of validators has an impact on scalability. As a result, a balance between decentralization and scalability will be maintained.
What’s The Difference Between PoS and DPoS?
Delegated proof of stake (DPoS) is similar to the proof of stake (PoS), but there are some significant differences. With PoS, all network participants must validate transactions and agree on the state of the ledger. This can cause scalability issues because all participants must agree on the state of the ledger.
Only delegates are responsible for validating transactions and agreeing on the state of the ledger with the delegated proof of stake. Delegates can validate transactions and agree on the state of the ledger faster than all network participants, allowing for a more scalable network.
Conclusion On PoS
In the evolution of consensus mechanism protocols, Delegated Proof of Stake is the next big thing. Delegated Proof of Stake consensus focuses on scalability while foregoing some aspects of decentralization. So there you have it guys! Which method will be the most successful? Will it be PoW, PoS, DPoS, or something else? Tell us in the comments section below.