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What is DPoS (Delegated Proof of Stake)? ?
Delegated Proof of Stake (DPoS) is a blockchain consensus mechanism designed to improve the scalability and speed of modern blockchains. Unlike PoS, where any token holder can become a validator by meeting a minimum token threshold, DPoS relies on a democratic voting system . Token holders elect a limited number of delegates, called witnesses, who are responsible for validating transactions and producing blocks.
This mechanism offers participatory governance and increased efficiency, but it also introduces risks of centralisation, as power is concentrated among a small number of delegates elected by the community.
Table of contents
How does DPoS (Delegated proof of stake ) ?
The DPoS operates on a collaborative system involving four main actors: voters, delegates (or witnesses), administrative delegates, and validators.
1. The voters
-
Who are they?
All the token holders of the blockchain. -
What is their role?
Voters elect the delegates responsible for validating transactions. The weight of their vote is proportional to the number of tokens held. -
Direct or indirect participation:
Users can vote directly or delegate their vote to a trusted person via a proxy voting .
2. The delegates (or witnesses)
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Main role:
Elected delegates are responsible for validating transactions and producing blocks. -
Rotation and fairness:
Delegates operate in rotation, which ensures a fair distribution of responsibilities. -
Rewards:
Witnesses receive a reward for each block produced, often redistributed to voters to encourage participation.
3. Administrative delegates
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Role:
These delegates, also elected, do not validate transactions but propose modifications to the network (block size, transaction fees, etc.). -
How it works:
Proposals must be validated by a community vote before being implemented.
4. The validators
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Role:
Validators verify that the blocks produced by the delegates comply with the network rules. -
Specificity:
They ensure a control role without directly participating in the production of the blocks.
Steps in the consensus process in DPoS
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Election of delegates:
Token holders vote to elect the witnesses responsible for validating transactions. -
Block production:
Delegates produce blocks in turn, ensuring high scalability while reducing validation times. -
Community control:
Ineffective or malicious delegates can be replaced by a vote. -
Rewards:
Delegates often redistribute a portion of their rewards to voters, increasing the incentive to participate.
Why was it created?
DPoS was developed in 2014 by Daniel Larimer to address the limitations of traditional consensus mechanisms in terms of scalability, while offering participatory governance.
The criteria of the DPoS (Delegated proof of stake )
Scalability: High performance thanks to DPoS
Delegated Proof Proof of Stake (DPoS) is designed to offer remarkable scalability decentralized applications ( dApp ) and other use cases requiring high transaction capacity.
1. A limited number of delegates to optimize validation
DPoS relies on a system where a limited number of delegates (usually between 21 and 101) are elected to validate blocks. Unlike Proof of Stake (PoS) or Proof of Work (PoW), where a large number of validators or miners participate simultaneously in the process, DPoS concentrates responsibilities on a small group.
- Validation speed: This limitation reduces the time required to reach a consensus, often allowing block validation in less than a second.
- Elimination of conflicts: The predetermined rotation of delegates eliminates competition between validators, as in PoW, reducing delays and increasing the fluidity of operations.
2. Reducing the load on the network
By limiting the number of active validators, DPoS reduces the load on the network, thus improving its overall efficiency.
- Simplified synchronization: Fewer participants means less data to synchronize between nodes, which speeds up transaction processing.
- Reduction of resources needed: Unlike PoW, which requires massive computing power, DPoS significantly reduces hardware and energy requirements.
3. High transaction throughput
Thanks to its optimized structure, DPoS can handle a transaction throughput that is generally higher than that of other consensus mechanisms.
- Concrete examples:
- Tron , based on DPoS, displays a performance of approximately 100 TPS (transactions per second) in real time compared to 6 TPS for Bitcoin and 16 TPS for Ethereum 2.0 .
4. Adaptability to high-demand applications
DPoS is particularly well-suited to blockchains requiring large-scale scalability , such as those designed for:
- Decentralized applications ( dApp ): Blockchain games or social platforms, where thousands of transactions must be processed in real time
Comparison of consensus mechanisms: PoW, PoS, DPoS
| Criteria | PoW | PoS | DPoS |
|---|---|---|---|
| Security | Very high (deterrence through computing power). | High (economic deterrent). | Good (community control and rotation). |
| Scalability | Generally low (7 TPS on Bitcoin). | Medium to high (15 to 1000 TPS depending on the blockchain). | High (approximately 100 TPS in real time for Tron). |
| Decentralization | Excellent (almost anyone can mine with the necessary equipment). | Average (influence of large stakers). | Low (limited number of delegates). |
- For financial networks: Blockchains geared towards fast payments or complex transactions, requiring near-instantaneous completion.
- For interoperable solutions: Thanks to its high throughput, DPoS facilitates interactions between blockchains without major slowdowns.
5. Comparison with PoW and PoS
DPoS generally outperforms PoW and PoS in terms of scalability:
- PoW: Limited by the need to solve complex cryptographic puzzles, resulting in significant delays.
- PoS: Although improved over PoW, PoS involves a potentially unlimited number of validators, which can slow down consensus in heavily loaded networks.
- DPoS: With its limited delegates and streamlined structure, it maximizes network speed and efficiency.
A nuance regarding the exceptional scalability of DPoS
While DPoS is distinguished by its remarkable scalability, it's important to note that some PoS-based blockchains, such as Solana and Base (a layer 2 ), achieve even more impressive scalability performance. These blockchains leverage specific technological innovations that transcend the choice of consensus mechanism.
- Solana
and Proof of History (PoH): Solana combines Proof of Service (PoS) with Proof of History (PoH), a unique cryptographic timestamping method that reduces the need for synchronization between validators. This system allows Solana to process approximately 1180 transactions per second (TPS) in real time , far exceeding the typical performance of Decentralized Proof of Service (DPoS) blockchains. This feat relies not only on consensus but also on an optimized network architecture and innovations such as parallel transaction processing. - Base and Rollups on Ethereum
Base, a layer 2 solution built on Ethereum , uses optimized rollups , a technology that groups numerous transactions into a single batch before recording them on the main blockchain. This approach reduces the load on the main network while significantly increasing transaction capacity, enabling real-time performance similar to Tron. Base demonstrates that, in certain cases, the intelligent use of complementary technologies can overcome the limitations of a consensus mechanism like DPoS. - The consensus mechanism is just one factor among others.
The scalability of a blockchain depends not only on the consensus mechanism, but also on:
- Network architecture (e.g., node management).
- Specific technological innovations (PoH, rollups, sharding).
- Optimizing the upper layers, such as transaction management protocols or communication infrastructures.
Summary: Comparison of criteria between PoW, PoS and DPoS
Decentralization and DPoS: A delicate balance
Delegated Proof of Stake (DPoS) is often criticized for its compromises on decentralization, although it attempts to maintain a certain balance through community participation. By limiting the number of delegates (from 21 to 101, depending on the blockchain), DPoS promotes faster governance and increased scalability, but this restriction can lead to risks of centralization and specific vulnerabilities.
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Why is DPoS less decentralized?
a) A limited number of delegates
- In the DPoS, only a small number of delegates are elected to validate blocks and maintain the network.
- Impact: Although this allows for faster validation, it significantly reduces the number of actors actively participating in the consensus, which can concentrate power in a few hands.
b) Risk of disproportionate influence
- Weighted voting: Token holders vote for delegates, but their vote is weighted by the number of tokens they hold. Large token holders ( whales ) can therefore exert a disproportionate influence on the selection of delegates.
- Consequence: This concentration of power can reduce diversity and increase the risk of collusion between delegates.
c) Entry barrier for small holders
- Although all token holders can vote, smaller holders may feel their vote carries little weight compared to large investors. This can discourage their participation, leaving decisions in the hands of a small number of powerful players.
Risks associated with the limited number of validators
a) Collusion between delegates
- Issue : With a small group of elected delegates, collusion becomes a real threat. These delegates could agree to manipulate the network to their advantage, for example by:
- Blocking certain transactions.
- Changing the network rules to ensure re-election.
- Exploiting rewards for personal gain.
- Consequence: This undermines user trust in the blockchain and can even lead to forks or abandonments of the network.
b) Gradual centralization
- Phenomenon: Once elected, some delegates can become very influential through their performance or control over rewards, making them difficult to replace.
- Impact: This can transform a decentralized network into a structure where power is held by an oligarchy of delegates.
c) Vulnerability to targeted attacks
- Problem: With a small number of delegates, a targeted attack (cyberattack or physical coercion) becomes easier to carry out.
- Example: If an attacker manages to compromise a majority of delegates, they could control the network, double-spend, or block certain transactions.
d) Reduction of geographical diversity
- Regional concentration: Delegates may be grouped in specific regions due to favorable conditions (energy cost, regulations, etc.), thus reducing the overall resilience of the network.
- Impact: This can make the blockchain vulnerable to regional disruptions (power outages, local regulations).
The mechanisms that mitigate these risks
Despite these vulnerabilities, DPoS incorporates mechanisms to limit the risks associated with decentralization.
a) Rotation of delegates
- The delegates produce the blocks in turn, which prevents any single actor from monopolizing the validation.
- Advantage: This distributes responsibilities and reduces the risk of short-term collusion.
b) Community control
- Dynamic recall: Ineffective or malicious delegates can be quickly replaced by a community vote.
- Advantage: This encourages delegates to remain honest and act in the best interests of their constituents.
c) Incentives for participation
- Block rewards are often shared with voters, encouraging broader and more active participation in voting.
- Impact: This encourages more token holders to get involved in network governance.
The decentralization/scalability trade-off
Services (DPoS) prioritizes scalability and speed over decentralization. This compromise may be acceptable for blockchains geared towards applications requiring high transaction throughput (such as EOS or Tron), but it could be problematic for financial networks requiring maximum resilience.
Security through economic deterrence: Why and how?
The role of tokens in voting and the power of delegates
- In DPoS, token holders use their participation to vote and elect delegates. The weight of each vote is proportional to the number of tokens held.
- Direct deterrence: Malicious delegates risk being excluded from subsequent votes if they act against the interests of the voters. Dishonest behavior results in the loss of future revenue associated with their role as block producers.
Incentives for delegates
- Delegates receive economic rewards (transaction fees and/or new tokens) for block production. This gives them a strong incentive to act honestly and maintain their position.
- Cost of dishonesty: If a delegate acts maliciously or inefficiently, he is likely to lose his position and, consequently, his potential income.
Comparison with economic deterrence in the PoS
In the PoS:
- Validators must stake a certain amount of tokens to participate in block validation.
- If a validator acts dishonestly (for example by validating fraudulent transactions), they risk losing all or part of their staked tokens through a slashing .
- Direct deterrent: The immediate loss of staked tokens is a significant penalty for malicious behavior.
In the DPoS:
- Delegates do not necessarily need to stake tokens to validate blocks, but their position depends on their reputation and the votes of token holders.
- Indirect deterrence: The loss of their role (and therefore the associated rewards) constitutes an economic lever that encourages them to act honestly. Although less immediate than the slashing effect of the Proof of Service, this mechanism remains effective, especially if voters are active and attentive.
Economic deterrence combined with community governance
The unique aspect of DPoS is that economic deterrence is combined with dynamic community control:
Token holders can revoke their support for a malicious or ineffective delegate at any time, increasing the pressure on delegates to act in the best interests of the community.
Flexibility: Delegates cannot rely on staked tokens to secure their position; they must maintain an impeccable reputation and consistent community support.
Limitations of economic deterrence in DPoS
Although DPoS incorporates an economic deterrent, certain limitations can reduce its effectiveness:
Vote concentration: If large token holders control a significant portion of the votes, they can maintain malicious delegates in place to serve their personal interests.
Lack of participation: If small token holders do not vote actively, deterrent mechanisms lose their effectiveness, as control is concentrated among a few actors.
Conclusion of the DPoS: A compromise between scalability and decentralization
DPoS is an innovative variant of PoS, designed to meet the growing scalability needs of modern blockchains. Its delegation system offers participatory governance and high transaction capacity, but it introduces risks related to centralization and collusion.
This model is particularly well-suited to blockchains that require fast transactions and active governance, such as EOS or Tron. However, its adoption must be carefully considered based on the specific needs of the network and the priorities between security, scalability, and decentralization.
Further reading : To improve your understanding of consensus mechanisms and blockchain criteria, click on the bold words to discover our articles on Proof of Work and our comparison Proof of Work vs. Proof of Stake and the blockchain trilemma .
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Yoann
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
