Most have heard of proof of work used by Bitcoin, Proof of stake used by Ethereum, but not many know about delegated proof of stake, so let's discuss this in detail.
Delegated Proof-of-Stake (DPoS) Basics:
Delegated Proof of Stake (DPoS) is a variation of the Proof-of-Stake consensus mechanism used by Ethereum, it is used by several blockchain networks. Some new blockchain projects even combine the two to achieve a better network consensus
DPoS is a consensus mechanism where token holders vote to elect a set of "delegates" also called "witnesses" or "block producers". They are responsible for validating transactions and creating blocks.
As said earlier, the reason is to achieve faster transaction speeds and higher scalability compared to traditional PoS.
Transaction Process (DPoS):
Transaction Creation and Broadcast:
If you create a transaction in your wallet, specifying Mr. A's address, the amount of tokens to send, and the transaction fee and your wallet digitally signs the transaction.It will be broadcast to the network.
Mempool Inclusion:
Nodes on the network will receive your transaction and validate it. This validation process checks are similar to those in PoS, It basically does the following:
💥Digital signature verification.
💥Sufficient balance check.
💥Double-spend prevention.
💥Transaction fee check.
If the above are successful, it means that the transaction is valid and it gets added to the mempool and the next step will be to produce blocks that will be added to the chain, but who will produce the blocks? , well, keep reading
Delegate Selection:
Those that hold the native oken of the blockchain will vote to elect a set number of delegates.The delegates with the most votes are chosen to produce blocks and the amount of tokens a holder possesses typically influence their chance of being voted as a delegate. As I said before, the work of these delegates are validating transactions and creating blocks.
Block Production:
These elected delegates will take turns producing blocks in a predetermined schedule by gathering transactions from the mempool, including your transaction to Mr.A in order to form a new block.
They will also validate the transactions in the block and then sign the block with their private keys.
Block Validation and Confirmation:
The other nodes on the network will receive the newly produced block and validate it too by checking the delegate's signature and the validity of the transactions in the block and if the block is valid, it will be added to the blockchain.
If you are wondering if these elected delegates can be trusted, well, yes, because their actions are observed by the network, there is a high degree of confidence in the blocks they create.
Finally your transaction is now included in a block and considered confirmed.
Transaction Completion:
After it is confirmed, Mr. A's wallet will recognize the incoming transaction and display the received tokens.
Key Characteristics of DPoS:
Elected Delegates: Token holders elect a set of delegates to produce blocks.
Fast Block Times: DPoS typically achieves faster block times compared to PoW and traditional PoS.
High Throughput: DPoS can handle a large number of transactions per second.
Governance: Token holders have a direct say in who validates transactions.
Potential Centralization: A smaller set of delegates can lead to concerns about centralization.
Accountability: Because the delegates are elected, they are held accountable by the token holders.
Differences from PoS:
Delegation: DPoS introduces the concept of elected delegates.
Faster Consensus: DPoS is generally faster than PoS.
Governance: DPoS gives token holders a more direct role in governance.
If you are like me, I like to ask questions if things don't add up. the first time I learnt about this, I wondered why elected delegates would be faster with processing transactions than the randomly selected validators as is the case in proof of stake network,
Think of it this way, Imagine a football team of highly trained and organized professionals competing against a randomly selected group of footballers. Who do you think will have better speed, communication and coordination? I trust you already know the answer, right?
Now let us look at why the a consensus mechanism that uses delegation is faster than the traditional proof of stake.
Key Factors Contributing to DPoS Speed:
Fixed and Smaller Set of Validators:
In DPoS, the number of elected delegates is typically much smaller than the number of potential validators in a traditional PoS system.
This smaller set allows for faster communication and coordination between validators.
They often have dedicated hardware and infrastructure, because they are professional block producers.
Predefined Block Production Schedule:
DPoS networks often use a predefined schedule for block production.This means that each delegate knows exactly when they are responsible for creating a block.This removes the randomness and potential delays associated with validator selection in traditional PoS.
Optimized Communication:
Because the delegates are known and fixed, they can establish optimized communication channels.
This reduces the time it takes to propagate blocks and transactions across the network.
Reduced Overhead:
The smaller set of validators and predefined schedule reduce the overhead associated with validator selection and communication.
This allows for faster block times and higher throughput.
Accountability and Performance:
Delegates are elected based on their reputation and performance.They are incentivized to maintain high uptime and process transactions quickly.If they fail to perform, they can be voted out by token holders.
