Delegated Proof of Stake (DPoS)

Delegated Proof of Stake (DPoS) is an evolved fundamental algorithm derived from the concept of Proof of stake. This consensus algorithm was developed by the founder of Bit shares, Steemit, and EOS i.e. Daniel Larimer in 2014. This potent mechanism is widely being used in blockchain-based networks in order to ascertain validators for each block & to conclude unanimously about the appropriate inclusion of data in the chain. The method ensures the security of the crypto currency’s network and also aims to bridge the cons associated with Bitcoin’s PoW system and PoS system of Peer coin and NXT. Thus DPoS is sketched out to cater to the existing need for technology-based democracy, by plying the role of voting and election mechanism in the blockchain. DPoS entails, every person staking the tokens is authorized to be a part of the mintage process which further ensures the selection of layer two nodes by validating the blocks and adding them to the blockchain. These nodes are referred to as “witnesses” or “block producers.” There are 21, 101, 21,101, 51 witnesses for blockchain namely EOS, Bit shares, Steemit, Lisk, and Ark. 


Working on DPoS system:


 Each vote is proportional to the size of each voter’s stake Here; the consensus users can directly cast their vote or delegate their authority to another entity. Selected witnesses are at the helm for verifying the transactions and creating blocks by signing them. The reward for verifying and signing the transactions in a block is usually shared by ones who voted for witnesses. In case the witness fails to provide verification to the transaction, rewards remain undistributed, and then it is further added to the witness who fulfils the criteria. Since transactions are collected by the next witness, therefore such a block is called stolen. 



 The witnesses in the top tier generally vary between 21-101 where the minimum possible count should be 11.Yet this is entirely in the hands of shareholders as to decide upon the number of witnesses to be associated with each transaction. As known so far witnesses are responsible for transactions’ validation and creation of blocks backed by associated fees as a reward. They can decide upon the inclusion or exclusion of transactions in the blockchain but are not authorized to alter the information of any transaction. In the continuous process of voting there is a risk associated with each witness as they can be easily replaced by the ones getting more votes, thus making the process more trusted and competitive.


Shareholders are in Control 

The highlighted feature of DPoS is that shareholder holds the control and makes the process decentralized. The process becomes fairer as it entails the risk of losing authority and stake as the company can be on sale, owing to its ineffective ownership. This consensus market feedback ensures more rationale voting. Each shareholder can .vote for someone to sign their stead, one who gets more than 1% vote is approved to join the board. The representatives become a “board of directors” considering the round-robin manner and signing blocks. If in case any of the directors misses their turn, the vote of the clients will subsequently be switched away from them which gives rise to replacement ensuring the up timed and incentive campaign. 



 The group of delegates in the DPoS is also selected by users for overseeing the blockchain . They are not considered active role-players in transaction control but have a say upon the size of witness and their rewards. 


Block validators 

DPoS refers to complete nodes who verify the blocks created by witnesses by following the consensus rules. Any user can be a block validator for verifying network. There is no incentive attached for being a block validator.


Why DPoS?

The system broadens the way for the shareholders to delegate their votes without sharing any control of mining the coins and further generates better scope for dividend earning. It is potent to be cost-efficient and performance effective. 

  • It is more consensus and democratic approach 
  • Provides financial ease due to lesser staking amount required by the user, thus ensuring decentralization in long run. 
  • It is more scalable as it does not depend on computing power which is generally required to run a network. 
  • It serves as a separate different entity from the production which paves the way for more creative models to alleviate the issues
  • It ensures the feasible, affordable, trusted, governance system in the blockchain. 


Despite certain valid and fair significance having attached to the concept, there are reasons to be cautious of while selecting representatives. As there is a high probability of them not being online where the attackers might gain a lucrative opportunity to dominate the control in proportion to their stake and mining generation without adhering to the peer-review process. To ensure the smooth flow of blockchain format it is required that all related things are considered so that DPoS becomes a widely accepted consensus algorithm for cost and work effective digital development.