Delegated Proof of Stake (DPoS) is a consensus protocol for scalable blockchains. This consensus protocol tries to solve the scalability problems and at the same time guarantees high security in blockchains.
One of the main features of this protocol is Byzantine Fault Tolerance or BFT. Thanks to this feature it provides high levels of security in public blockchains. Its operation is based on the election of so-called “delegates“. These delegates, once elected, are in charge of creating a group thanks to which the BFT can be implemented.
The delegates are totally reliable. Among them there is a rotation of leaders, that is, each delegate has a turn to create a block of transactions. When a delegate takes his turn, he can generate a block and collect his reward for doing so. It should be noted that in case a delegate cannot create the block in his turn, he will have to wait for the next turn and will lose his turn.
In this consensus protocol, a user’s participation in the network is proportional to his or her voting power. Decisions related to the operation of the network are generally submitted to a vote in order to encourage decentralization. Another important aspect is that delegates can be penalized if they do not act correctly.
History of DPoS
Delegated Proof of Stake was created by Daniel Larimer in 2014 with the goal of being implemented on highly scalable blockchains. The first project to implement Delegated Proof of Stake was Bitshares.
The implementation in this project, according to their whitepaper, was primarily aimed at avoiding the consequences of centralization in blockchains. This was made possible by so-called “delegates“. Delegates have the authority and duty to create and transmit transaction blocks within the blockchain.
How does DPoS work?
The functioning of this Consensus Algorithm starts from three main processes. These processes are delegate voting, block creation and publication of delegate behavior on the blockchain.
- The system starts with the first process, the voting of delegates. To carry out this process, a real-time voting system is used where a limited group of trusted stakeholders is elected. These are called “delegates“.
- The election process is influenced by reputation algorithms and the number of tokens held by each delegate. Depending on the number of tokens they have, they can increase their votes. In short, whoever has more tokens is more likely to be part of the group of delegates.
- After the delegate selection process comes block creation. As mentioned above, delegates have the power to generate blocks and add them to the blockchain.
- In the generation cycle, each delegate has the power to generate a blockchain block. From this point on, the operation is very simple. When a block is generated by a delegate it passes the turn to the next delegate and thus transfers its block generation capacity successively until the cycle ends.
- In the generation of each block the delegate can validate or deny transactions. For each block generated as well as for each transaction validated, the delegates receive an economic incentive or reward.
- The last stage of the Proof of Delegate Participation operation is the publication of the delegates’ behavior on the blockchain. This stage makes it possible for the community to monitor delegate activity at all times.
In case the community finds any misbehavior or disagrees with the attitude of a delegate, it can expel him/her. Constant supervision guarantees the correct functioning of the network, since under supervision the delegates cannot commit abuses.
Main features of DPoS
The Proof of Delegated Participation system has some features that differentiate it from other systems. Some of these features are discussed below:
- One of the most important features of DPoS is Transactions as Proof of Stake. These, also known as TaPoS, allow the option of including in each transaction the hash of a “recent” block. In this way, whoever signs the transaction ensures that it cannot be applied to any other transaction. The main objective of this type of transaction is to avoid Double Spending attacks and to help all parties to prove the integrity of the transaction history.
- Another feature of DPoS is Byzantine Fault Tolerance (BFT). This implementation offers a better level of security to the blockchain.
- This algorithm enables the ability to parallelize tasks on the blockchain.
- Another of its features is the optimization of network resources, including bandwidth.
- The DPoS system, as we have already mentioned, works through a voting system that values the reputation and participation of users in the network to elect them as delegates.
