What is DPoS and how the voting system can benefit the crypto world?
Anton Dziatkovskii as a co-founder of Platinum Q DAO Engineering playing an important role in the implementation of the blockchain technology. With 5 years of experience in blockchain, Anton Dzyatkovskiy believes that advanced technology can truly change the future. Read this article to dive into the disruptive technology wave of blockchain technology.
What differs from different types of blockchains? Business model, types of mining, mass adoption ideas, and so on. But one of the most valuable differences is a type of consensus. Consensus is a way the decentralized trust system works. It helps everybody to rely on blockchain as a whole.
There are several developments in the consensus mechanism. The traditional blockchains rely on PoW (Proof of Work). To reduce the mining costs and to increase the speed in the blockchain the PoS (Proof of Stake) was introduced later. The Delegated Proof of Stake (DPoS) consensus algorithm is considered by many as a more efficient and democratic version of the preceding PoS mechanism.
The Proof of Work algorithm makes use of a large amount of computational work to secure an immutable, decentralized, and transparent distributed ledger. Contrarily, PoS and DPoS require fewer resources and are, by design, more sustainable and faster.
In regards to performance, DPoS blockchains are more scalable, being able to process more transactions per second (TPS), when compared to PoW and PoS.
A DPoS-based blockchain includes a voting system where stakeholders outsource their work to a third-party. In other words, they are able to vote for a few delegates that will secure the network on their behalf. The delegates may also be referred to as witnesses and they are responsible for achieving consensus during the generation and validation of new blocks. The voting power is proportional to the number of coins each user holds. Usually, the rewards collected by the delegates are proportionally shared with their respective electors.
The DPoS algorithm creates a voting system that is directly dependent on the delegates’ reputation. If an elected node misbehaves or does not work efficiently, it will be quickly expelled and replaced by another one. The voting system can also be effectively used for any decisions on project development. Thus, any decision affecting the coin future can be voted by the delegates, representing the interests of the majority of stakeholders. Voting within the DPoS blockchain can also be used for any type of development and improvement.
Just as in real life delegates vote for their representatives who are called validators. Furthermore, in real life, voters vote for their representatives into the House of Representatives. In a DPoS blockchain, delegators delegate their votes to the validators. Validators then validate the blocks and also they vote for major blockchain decisions. Thus DPoS blockchain implements a real solution for a true consensus, democratic voting system.
One of the interesting use cases for using the voting system is the token/coin creation and offering is using voting for changing some important parameters of the tokenomics. Listing a token on an exchange is a tough moment for any post-ICO project. The price of the token often falls fast due to an extreme supply peak from the earlier investors and advisors who wish to sell their assets at the first opportunity, and due to lack of new demand from the new supporters. To manage these spikes the community can vote for some gradual token release schedule which will not affect the price in a negative way. The voting mechanism is crucial for achieving a general consensus on any sensitive topics regarding the blockchain project.
The fast development of the DPoS consensus mechanism opens a whole new world of opportunities for the new projects. DPoS blockchains will become more popular due to their flexibility, speed, reliability, and the native voting mechanism. The voting mechanics allow blockchain to quickly adopt the changes in the technologies and to protect the interests of the stakeholders. DPoS introduces real democracy into the crypto world.