Nominated Proof of Stake (NPoS)
Nominated proof of stake, or NPoS, is similar to the proof of stake (PoS) in that it allows users to receive rewards for validating new blocks, but it differs in that only nominated nodes are permitted to participate in block validation.
On blockchains, NPoS is intended to promote good conduct while punishing bad behavior. For example, if a block validator attempts to approve a fraudulent transaction, they will be penalized by losing some of their staked tokens.
This correction technique ensures that only honest and dependable nodes are permitted to participate in the selected proof of stake consensus algorithm, which helps to improve network security overall.
Different Roles Within Nominated Proof of Stake (NPoS)
There are two different types of roles that exist within the nominated proof of stake: block validators and nominators.
Validators vs. Nominators
Block validators are in charge of validating new blocks and adding them to the network. A node must first be nominated by another voter before becoming a block validator. After being nominated, a node will be able to validate new blocks and get rewards for doing so.
Nominators are in charge of proposing new nodes to become block validators. Only nodes that have been nominated by other voters will be able to validate new blocks and collect rewards. They are crucial in NPoS since they are in charge of ensuring that only the most trusted and respectable nodes are permitted to validate new blocks.
In summary, the main difference between block validators and nominators is that block validators are responsible for validating new blocks, while nominators are responsible for nominating other nodes to become block validators.
Examples of Nominated Proof of Stake (NPoS)
These projects have all implemented NPoS in different ways, but they all share the common goal of improving upon the existing proof of stake algorithm.