Delegated Proof of Stake (DPoS) is a consensus mechanism that involves user-voted “delegates” and “witnesses” that validate transactions of a blockchain network. It is a hybrid form of proof of stake (PoS), invented to surmount the scaling issues of traditional blockchains.
DPoS is analogous to a democratic government in a blockchain, where users are freely able to vote for their chosen candidates. Their voting power is proportional to the amount of coins they own.
It needs to be noted that there are several variations as to how DPoS systems work, depending on which cryptocurrency. However, their fundamental processes work the same way.
Witnesses and Delegates
The roles of delegates and witnesses vary depending on the cryptocurrency and some of their functions can overlap or eliminate the other. Tron’s blockchain, for instance, has the so-called Super Representatives that function as both delegates and witnesses, and therefore, govern the whole network.
Witnesses play a very vital role as they are the ones that validate transactions. They do this by creating and adding blocks to the blockchain. They are compensated through token rewards in the form of transaction fee payments.
Witnesses have the power to prevent some transactions from being added to a block but cannot tamper with their data.
Delegates are generally responsible for blockchain governance. They maintain the system and can propose necessary network changes such as transaction fees, block sizes, election mechanics, etc.
In DPoS systems, elections are held continuously at fixed time intervals. These incentivize the witnesses and/or delegates to do their duties competently and with integrity, otherwise, they risk losing their position. Voters can assess the quality of these leaders through a reputation scoring system.
The interval for elections vary from crypto to crypto; some hold elections every six hours while others have it once a day or once a week.
Like PoS, DPoS systems do not require much electricity to run. Therefore, they are more environment-friendly and cheap to maintain.
As of today, DPoS blockchains are a lot more scalable than PoS and PoW blockchains, which means it can run faster and handle more users on the network.
All in all, the DPoS consensus mechanism provides a faster and cheaper way of keeping a blockchain network’s integrity through on-chain governance. Despite this, some experts question its security and decentralization claims.
This article is published on BitPinas: What is Delegated Proof of Stake? | DPoS Guide