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What is the Delegated Proof of Stake (DPOs)?

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What is the DPOS (Delegated Proof of Stake) ?

The Delegated Proof of Stake (DPOs) , or proof of delegated issue , is a blockchain consensus mechanism designed to improve the scalability and speed of modern blockchains. Unlike the POS, where any tokens holder can become a validator while respecting a minimum threshold of tokens, the DPOs is based on a democratic voting . Tokens holders elect a limited number of delegates, called witnesses, who are responsible for validating transactions and producing the blocks.

This mechanism offers participatory governance and increased efficiency, but it also introduces risks of centralization, because power is concentrated between a limited number of delegates elected by the community.

Table of contents

How does the DPOS (Delegated proof of stake ) ?

The functioning of the DPO is based on a collaborative system involving four main actors: voters, delegates (or witnesses), administrative delegates, and validators.

1. Voters

  • Who are they?
    All the tokens of the blockchain tokens.

  • What is their role?
    Voters elect responsible delegates to validate the 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 voice to a trusted person via a voting proxy .

2. The delegates (or witnesses)

  • Main role:
    elected representatives are responsible for validating transactions and producing the blocks.

  • Rotation and equity:
    the delegates operate in rotation, which guarantees an equitable distribution of responsibilities.

  • Rewards:
    Witnesses receive a reward for each product block, often redistributed to voters to encourage participation.

3. Administrative delegates

  • Role:
    these delegates, also elected, do not validate transactions but offer changes to the network (block size, transaction costs, etc.).

  • Operation:
    The proposals must be validated by a community vote before being implemented.

4. Validators

  • Role:
    Validators verify that the blocks produced by the delegates respect the rules of the network.

  • Specificity:
    they provide a control role without participating directly in the production of blocks.

Steps of the consensus process in the DPOS

  1. Election of delegates:
    Tokens holders vote to elect the witnesses responsible for the validation of transactions.

  2. Bloc production:
    The delegates produce the blocks in turn, guaranteeing high scalability while reducing validation periods.

  3. Community control:
    ineffective or malicious delegates can be replaced by a vote.

  4. Rewards:
    delegates often redistribute part of their awards to voters, strengthening the incentive to participate

Why was it created?

The DPO was developed in 2014 by Daniel Larimer to resolve the limits of traditional scalability consensus mechanisms, while providing participative governance.

The criteria of the Blockchain Trilemme of the DPOS (Delegated proof of stake )

Scalability: high performance thanks to the DPOs

The Delegated Proof of Stake (DPOs) is designed to offer remarkable scalability , meeting the growing needs of modern blockchains, especially those intended for decentralized applications ( dApp S ) and other use cases requiring high transactional capacity.

1. A limited number of delegates to optimize validation

The DPO is based on a system where a limited number of delegates (generally between 21 and 101) is elected to validate the blocks. Unlike the Proof of Stake (POS) or the Proof of Work (POW), where a large number of validators or minors simultaneously participates in the process, the DPOs concentrates responsibilities on a small group.

  • Validation speed: This limitation reduces the time required to reach a consensus, often allowing blocks validation in less than a second.
  • Elimination of conflicts: the predetermined rotation of delegates eliminates competition between validators, as in the POW, reducing deadlines and increasing the fluidity of operations.

2. Reduction of load on the network

By limiting the number of active validators, the DPOs lightens the load on the network, thus improving its overall effectiveness.

  • Simplified synchronization: fewer participants means fewer data to synchronize between nodes, which accelerates the processing of transactions.
Dpos
  • Reduction of the necessary resources: unlike the POW, which requires massive computing power, the DPOS considerably reduces material and energy requirements.

3. High transactional flow

Thanks to its optimized structure, the DPOS can manage a transactional flow generally higher than that of other consensus mechanisms.

4. Adaptability to high demand applications

The DPOS is particularly suitable for blockchains requiring large -scale scalability , such as those intended:

  • To decentralized applications ( dApp S): blockchain games or social platforms, where thousands of transactions must be treated in real time
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Comparison of consensus mechanisms: POW, POS, DPOs

Criteria Power Pos Dpos
Security Very high (deterrent by calculation power). High (economic deterrence). Good (community control and rotation).
Scalability Generally low (7 TPS on Bitcoin). Average to high (15 up to 1000 TPS depending on the blockchain). High (about 100 TPS in real time for Tron).
Decentralization Excellent (almost anyone can undermine with the necessary equipment). Average (influence of big stakers). Low (limited number of delegates).
  • To financial networks: blockchains oriented towards rapid payments or complex transactions, requiring an almost instantaneous purpose.
  • With interoperable solutions: thanks to its high flow, the DPOS facilitates the interactions between blockchains without major slowdowns.

5. Comparison with the Pow and the POS

The DPOs generally surpasses the Pow and the POS in terms of scalability:

  • Pow: limited by the need to solve complex cryptographic puzzles, resulting in significant deadlines.
  • POS: Although improving compared to the POW, the POS implies a potentially unlimited number of validators, which can slow down consensus in highly loaded networks.
  • DPOS: With its limited delegates and its reduced structure, it maximizes the speed and efficiency of the network.

Nuance on the exceptional scalability of the DPO

Although the DPOS is distinguished by its remarkable scalability, it is important to note that certain blockchains based on POS, such as Solana and Base Layer 2 solution ), however manage to achieve even more impressive scalability performance. These blockchains use specific technological innovations that transcend the choice of consensus mechanism.

  1. Solana
    and the Proof of History (POH) Solana combines the POS with the Proof of History (POH), a unique cryptographic horoditing which reduces the needs of synchronization between the validators. This system allows Solana to treat around 1180 transactions per second (TPS) in real time , far beyond the typical performance of DOPS blockchains. This feat is based not only on consensus, but also on optimized network architecture and innovations such as the parallel treatment of transactions.
  2. Base and the Rollups on Ethereum
    Base, a Layer 2 solution built on Ethereum , uses optimized Rollups , a technology that brings together many transactions in one batch before saving them on the main blockchain. This approach reduces the load on the main network while considerably increasing the transactional capacity to achieve performance similar to Tron in real time. Base shows that, in some cases, the intelligent use of complementary technologies can match the limitations of a consensus mechanism as the DPOS.
  3. The consensus mechanism is only one factor among others
    The scalability of a blockchain depends not only on the consensus mechanism, but also:
  • Network architecture (for example, nodes management).
  • Specific technological innovations (POH, Rollups, Sharding ).
  • Optimization of upper layers, such as transactions management protocols or communication infrastructure.

Summary: Comparison of criteria between POW, POS and DPOs

Decentralization and DPOs: a delicate balance

The Delegated Proof of Stake (DPOs) is often criticized for its compromises on decentralization, although it tries to maintain a certain balance thanks to community participation. By limiting the number of delegates (21 to 101, according to blockchains), the DPOS promotes faster governance and increased scalability, but this restriction can cause specificization and specific vulnerabilities.

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Why is the DPOS less decentralized?

a) A limited number of delegates

  • In the DPOS, only a small number of delegates are elected to validate the blocks and maintain the network.
  • Impact: although this allows faster validation, this considerably reduces the number of actors actively participating in consensus, which can concentrate power in a few hands.

b) risk of disproportionate influence

  • Weighted voting: Tokens holders vote for the delegates, but their vote is balanced by the number of tokens held. Big holders of Tokens ( 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) Entrance barrier for small holders

  • Although all tokens holders can vote, small holders can consider that their vote has little weight in the face of major investors. This can discourage their participation, leaving decisions in the hands of a limited number of powerful actors.

Risks linked to 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 in:
    • Blocking certain transactions.
    • Modifying the rules of the network to ensure a re -election.
    • Operating the awards for personal gains.
  • Consequence: this compromises the confidence of users in the blockchain and can even cause forks or network abandonments.

b) Progressive centralization

  • Phenomenon: Once elected, some delegates can become very influential thanks to their performance or their control over the awards, which makes 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 (cyber attack or physical coercion) becomes easier to make.
  • Example: if an attacker manages to compromise a majority of delegates, he could control the network, make double expenses, or block certain transactions.

d) Reduction of geographic diversity

  • Regional concentration: delegates can be grouped in specific regions due to favorable conditions (energy cost, regulations, etc.), thus reducing the overall network resilience.
  • Impact: this can make blockchain vulnerable to regional disruptions (electricity cuts, local regulations).

Mechanisms attenuating these risks

Despite these vulnerabilities, the DOSS incorporates mechanisms to limit the risks linked to decentralization.

a) Rotation of delegates

  • The delegates produce the blocks in turn, which prevents a single actor from monopolizing validation.
  • Advantage: this distributes responsibilities and reduces the risks of short -term collusion.

b) Community control

  • Dynamic revocation: ineffective or malicious delegates can be quickly replaced by a community vote.
  • Advantage: this pushes the delegates to remain honest and to act in the interest of their voters.

c) Incituration of participation

  • Block rewards are often shared with voters, encouraging a wider and active participation in the vote.
  • Impact: This encourages more tokens holders to get involved in network governance.

The decentralization/scalability compromise

The DPOs favors scalability and speed to the detriment of decentralization. This compromise can be acceptable for blockchains oriented towards applications requiring a high transactional speed (such as EOS or Tron), but it could be problematic for financial networks requiring maximum resilience.

Security via economic deterrence: why and how?

The role of tokens in the vote and power of the delegates

  • In the DPOS, tokens holders use their participation to vote and elect the delegates. The weight of the vote is proportional to the number of tokens held.
  • Direct dissuasion: Malveillant delegates may be excluded during the following votes if they act against the interests of voters. Dishonest behavior leads to the loss of future income associated with their role as block producer.

Incitations for delegates

  • The delegates receive economic awards (transaction costs and/or new tokens) for the production of blocks. This gives them a strong motivation to act honestly and to keep their position.
  • Cost of dishonesty: if a delegate acts in a malicious or ineffective way, it is likely that he will lose his post and, consequently, his potential income.
Dpos

Comparison with economic deterrence in the POS

In the pos:

  • The validators must stike a certain amount of tokens to participate in the validation of the blocks.
  • If a validator acts dishonestly (for example by validating fraudulent transactions), he risks losing all or part of his Staké tokens thanks to a slashing .
  • Direct deterrence: The immediate loss of Stakés tokens is a significant penalty for malicious behavior.

In the DPOs:

  • Delegates do not necessarily need tokens staker to validate blocks, but their position depends on their reputation and the votes of tokens holders.
  • Indirect dissuasion: the loss of their role (and therefore associated rewards) constitutes an economic lever which pushes them to act honestly. Although less immediate than POS slashing, this mechanism remains effective, especially if the voters are active and attentive.
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Economic deterrence combined with community governance

The unique aspect of the DPO is that economic deterrence is combined with dynamic community control:

Tokens holders can revoke their support for a malicious or ineffective delegate at any time, increasing the pressure on the delegates so that they act in the interest of the community.

Flexibility: delegates cannot count on staked tokens to secure their position; They must maintain an impeccable reputation and constant support from the community.

Limits of economic deterrence in the DPO

Although the DPOs incorporates economic deterrence, certain limits can reduce its effectiveness:

Concentration of votes: If big tokens holders control a large part of the votes, they can maintain malicious delegates in office to serve their personal interests.

Lack of participation: if the small tokens holders do not actively vote, the deterrent mechanisms lose their effectiveness, because the control is concentrated between a few actors.

Conclusion of the DPOS: a compromise between scalability and decentralization

The DPOS is an innovative variant of the POS, designed to meet the growing needs of scalability in modern blockchains. Its delegation system offers participatory governance and high transactional capacity, but it introduces risks linked to centralization and collusion.

This model is particularly suitable for blockchains that require rapid transactions and active governance, such as EOS or Tron. However, its adoption must be weighed according to the specific network needs and the priorities between security, scalability and decentralization.

Complementary readings : To improve your knowledge on consensus mechanisms and blockchain criteria, click on fat words to discover our articles on the Proof of Work , our comparison Proof of Work vs Proof of Stake And the Blockchain trilemma .

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Yohan Uzzan

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.