What is Delegated staking
Delegated staking - Delegated Proof of Stake (or DPoS) is a consensus algorithm which is essentially a process of pooling (delegating) the validation stakes with one wallet, called a staking pool. Like with mining, each delegator gets a share of the rewards, corresponding to their share in the delegate’s staking balance.
The Delegated Proof of Stake makes the distribution of coins and influence on the network more uniform and provides a greater degree of decentralization.
In DPoS blockchains each wallet with coins can vote for the so-called “delegates” (a.k.a. Block Producers, Validators) – designated community representatives who have the right to generate blocks and receive an award in the form of transaction fees.
DPoS is resistant to the attack of a corrupt minority. If delegates attempt to harm the network or go offline, network members elect new delegates until the number of honest block producers returns to 100%.
All coins in DPoS blockchains are designated as free (in circulation) and staked. Each person determines the size of his stake and is unable to spend it. Staked coins allow one to become a witness, vote for delegates and take part in managing the network through smart contracts. What are the benefits of staking?
No need to invest in expensive equipment to mint new coins;
No high power consumption;
Infeasibility of the “51% attack”: the attacker must own at least 51% of all tokens;
During airdrops many projects distribute coins faster among the stakers;
Staking in DPoS is used not only to make money but also as a tool to influence the network.
Author: Artem Published on: 20/10/2020 12:24 (edited on: 26/10/2020 13:28)