Delegated Proof of Stake (Delegated Proof of Stake, DPoS) is an evolution of classic proof of stake in which the right to create blocks is delegated to a limited circle of selected nodes. Instead of each coin holder directly participating in the formation of blocks, balance owners vote for delegates — block producers whom they trust to maintain the operation of the network. The larger a voter's stake, the more weight their vote carries.
The operation of the algorithm is usually divided into two stages. The first is electing a group of block producers through a vote by holders. The second is drawing up a schedule by which the selected nodes create blocks in turn. This approach ensures high throughput and fast confirmation of transactions, since coordination is handled by a small number of pre-known and active participants.
Features of the approach
- coin holders control the network through voting and can re-elect delegates;
- dishonest block producers can be removed by voting for others;
- high speed and efficiency due to the limited number of validators.
The ideas of DPoS were used in projects such as BitShares and were mentioned in a number of other proof-of-stake protocols. Critics point to the risk of relative centralization, since the network effectively relies on a small group of delegates. Supporters, on the other hand, emphasize that the built-in voting mechanism returns control to coin holders, who are the most interested in the stable operation of the network.
