Liquid proof of stake (LPoS) is a consensus algorithm that was designed to improve on the proof of stake (PoS) and delegated proof of stake (DPoS) algorithms. But that’s not all, scroll down to know more about the liquid proof of stake
What is Liquid Proof of Stake?
Liquid proof of stake (LPoS) is a blockchain consensus mechanism that enables token holders to lend their validation rights to other users without giving up ownership of their tokens.
Delegation is optional with LPoS. As a token holder, you can delegate your validation powers to other holders without having possession. That is, the tokens will stay in the delegators’ cryptocurrency wallets.
Furthermore, with Liquid proof of stake, only validators are penalized in the event of a security flaw.
About Liquid Proof of Stake (LPoS)
LPoS was first launched as part of the Tezos project, which was founded in September 2018 by Kathleen and Arthur Breitman and is still in existence today. The project was completed successfully. The current level of bids is 80%, distributed among 450 validators and over 10,000 delegating users.
Furthermore, the number of delegates is only limited by the minimum size requirement for the steak, so it can easily expand – up to around 100 thousand. This suggests that the project is highly decentralized.
Liquid Proof of Stake (LPoS) Limitations
There are a few drawbacks to liquid proof of stake. For starters, it lacks the decentralized consensus of proof of work (PoW). This is due to the fact that a small group of people still controls the majority of the coinage.
Second, LPoS is more vulnerable to attacks than PoW since attackers only require a tiny portion of the overall supply to command 51% of the network.
What Is Liquid Democracy?
The term “liquid democracy” refers to a blockchain voting system that allows people to elect delegates to vote for them on specific issues, as well as vote individually on the same subjects. The “liquid” in liquid democracy refers to people’s ability to change their delegates at any moment.
Proof of Stake vs Liquid Proof of Stake(LPoS)
There are some fundamental differences between proof of stake (PoS) and LPoS. Users of LPoS are not required to have their money staked at all times. Instead, users can withdraw their coins at any time and continue to get rewards. Furthermore, LPoS does not require users to have a huge number of coins to stake.
Delegated PoS (DPoS) vs Liquid PoS?
The main difference between delegated Proof of Stake (DPoS) and LPoS is that the latter allows users to lend their validation privileges to other users without giving up ownership of their tokens. DPoS, on the other hand, requires users to give up their voting privileges in order to delegate them to another user.
