Delegated Proof-of-Stake (DPoS)

The popular consensus mechanism of proof-of-stake evolved into delegated proof of stake (DPoS). In this consensus mechanism, the holders of the particular token are given voting rights to choose specific delegates that are also called block witnesses or producers. These are the people who validate a new block. The delegates who receive the highest number of votes once the voting is complete are eligible to become the block producers.

Normally, the delegate is expected to stake a certain amount of coins in the blockchain system in order to remain accountable for the operation and security of the operating network. The stakeholders can publicly view any malicious act done by the delegates, which can even result in issuing of a penalty against them. This can lead to the loss of all the staked coins or tokens and thereby, conduction of another voting round to elect a new delegate.

Proof-of-stake consensus mechanism was an energy-efficient solution to the tedious proof-of-work consensus mechanism used in blockchains like Bitcoin and Ethereum. While the PoW required work to be done resulting in the use of an enormous amount of computing power, PoS required miners to stake a nominal amount of the token in a security account to validate the new block. The more the amount of token staked, the more the chances the validators had to be selected. Cardano, Cosmos, and Synthetic networks were some of the blockchains to use this consensus mechanism. However, according to crypto enthusiasts, this protocol somehow favored the wealthy as large holders of the tokens clearly had an advantage of getting selected. Delegated proof of stake (DPoS) positions itself as an improved version of PoS and PoW. This mechanism runs on the trustworthiness and reputation of the delegates where the power is vested in the hands of the coin holders.

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