DPoS vs PoS: The Benefits of Delegating Governance

Started by RafaelJames, Aug 05, 2022, 10:03 AM

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Blockchain is more than just cryptocurrencies, with each blockchain serving a unique purpose and relying on a protocol, which is a set of rules for transferring data securely.

Each blockchain has its own protocol, and a consensus algorithm ensures that every node on the network validates transactions according to these rules. The Proof-of-Work (PoW) consensus technique, which Bitcoin uses, requires miners to solve mathematical puzzles to add blocks to the chain and receive a reward.

However, this protocol is energy-intensive and may incentivize participants to prioritize their own benefits over network development. An alternative is the Proof-of-Stake (PoS) protocol, where validators hold a stake in the network and are chosen to validate transactions based on their stake.

In addition to these commonly used protocols, there are many other terms associated with blockchain and its components. Understanding them requires time and effort, but it's crucial for exploring the potential of blockchain technology beyond cryptocurrencies.

Proof-of-Stake and Delegated Proof-of-Stake are alternative consensus algorithms designed to address the energy consumption and other drawbacks of Proof-of-Work. Proof-of-Stake requires users to lock up cryptocurrency assets as collateral to validate blocks, while Delegated Proof-of-Stake combines staking with a voting and delegation mechanism to select delegates responsible for transaction validation.

 These protocols ensure fast and secure verification, with lower power consumption than Proof-of-Work, and incentivize users to participate in network governance. While there are many other protocols beyond these, their operation is similar in nature, promoting network security through competition and self-interest.


The main idea behind pow consensus is that nobody can predict who will sign the next block, which means that nobody can sign it on their own whim. With pow, signing blocks requires paying with energy costs. On the other hand, pos consensus requires "paying" with blockchain coins, and the first pos consensus used a list of unspent outputs to calculate the probability of signing a block.

Dpos consensus, however, requires obtaining votes from participants holding coins. Nevertheless, every consensus based on trust is vulnerable, and consensus based solely on inner blockchain variables (pos) can be rewritten. This vulnerability has been exploited repeatedly, making pow consensus the only non-vulnerable consensus. Proof of capacity is also vulnerable to blockchain rewriting, but the only non-vulnerable consensus left is pow with no older brother nearby using the same mining algorithm. Proof of identity is an interesting concept, but its protection can be weakened by the high price of coins.


Quote from: RafaelJames on Aug 05, 2022, 10:03 AMThe process of calculating the hash requires a lot of energy
Is where I think "the dog is buried". That is, in fact, energy is the equivalent of a cryptocurrency in terms of value. Although if we take the same fiat (paper money), then energy is also spent on their production, although much less. And this, in turn, means that it is possible, in principle, to determine the real price of bitcoin in dollars, as the cost of the energy spent on its calculation. 8)


Dpos blockchains, such as EOS, determine the order of participation by using a protocol where nodes agree on who will work in what order. If a node misses their turn due to timeouts, they are removed from the list and penalized with fines.

However, pos does not determine the order of participation on its own. Nevertheless, an algorithm is possible, which was used in the classic first pos. This algorithm allows a node to instantly determine whether it can sign a block or not without any time-consuming calculations.

If two or more nodes try to sign a block simultaneously, the next block will be placed by a simple algorithm. Each node chooses whose branch to use, and the one who arrived faster stays.


Delegated Proof of Stake (DPoS) and Proof of Stake (PoS) are both consensus mechanisms used in blockchain networks. They offer various benefits, but delegating governance is a specific advantage of DPoS.

In a PoS system, token holders can participate in the network's consensus protocol by staking their tokens and becoming validators. Validators are responsible for creating new blocks and confirming transactions. However, in PoS, all token holders have an equal chance of being chosen as a validator.

In contrast, DPoS introduces the concept of delegated governance. Instead of every token holder being a validator, token holders can vote to elect a set number of delegates who will be responsible for block validation and governance decisions. These delegates are typically a smaller group of trusted individuals or entities within the network.

One of the key benefits of delegating governance in DPoS is that it allows for more efficient decision-making processes. With a smaller group of delegates, it becomes easier to reach consensus on important matters such as protocol changes, upgrades, or resolving disputes. This can lead to faster and more effective decision-making compared to a system where every token holder has an equal say.

Moreover, delegating governance in DPoS systems can reduce the barrier to entry for participation in block validation. In PoS, validators need to have a significant amount of staked tokens to have a higher chance of being selected. However, in DPoS, token holders can delegate their voting power to trusted delegates, even if they do not possess a large stake themselves. This promotes decentralization and inclusivity within the network, as more people can participate in the consensus process through delegation.

Furthermore, another benefit of delegating governance is the potential for better security. By electing trusted delegates, token holders can rely on their expertise and reputation to ensure the network's security and integrity. Delegates are incentivized to act in the network's best interest, as their reputation and ability to attract votes depend on it.

More details about DPoS and its benefits in terms of delegating governance:

1. Scalability: DPoS is known for its scalability compared to other consensus mechanisms like Proof of Work (PoW). By delegating governance to a smaller group of elected delegates, DPoS networks can achieve faster block confirmation times and higher transaction throughput.

2. Reduced centralization: While DPoS does involve a smaller set of delegates, it still maintains decentralization by allowing token holders to vote for the delegates of their choice. This democratic process ensures that the network remains diverse and not controlled by a single entity or a small group of powerful validators.

3. Flexibility and adaptability: DPoS networks often have built-in mechanisms to update or improve the consensus protocol. Through the power of delegation, network upgrades and governance decisions can be implemented more swiftly and efficiently, enabling the network to evolve in response to technological advancements and community needs.

4. Alignment of incentives: Delegated governance aligns the interests of token holders with those of the elected delegates. Token holders delegate their voting power to delegates they trust, who are incentivized to act in the best interest of the network to maintain their reputation and attract more votes. This alignment of incentives helps ensure the long-term sustainability and integrity of the network.

5. Reduced energy consumption: Unlike PoW, which requires significant computational power and energy consumption, DPoS is more energy-efficient. By delegating the block validation process to a smaller set of elected delegates, DPoS significantly reduces the resource requirements for maintaining the network's security and consensus.

It's important to note that while DPoS provides various benefits, it also has its own set of trade-offs. These may include potential concerns around centralization, the need for continuous voter participation, and the risk of collusion among delegated entities. As with any consensus mechanism, it's crucial to assess the specific requirements and goals of a blockchain network before deciding on the most suitable governance model.