Advantages and Problems of Delegated Proof of Stake

Published by Mario Oettler on

Advantages of Delegated Proof of Stake

  • Higher transaction throughput due to the lower number of block producers and the fixed order of block producers
  • Lower energy consumption
  • Opportunity for voters to partake in the block rewards
  • Low entry barriers for voters. Even with a small budget, voters can participate in the voting process and earn their share of block producer rewards depending on the protocol.
  • Lower technical requirements for witnesses
  • Depending on the protocol, quick replacement of failing nodes
  • Voters can influence protocol changes by electing delegates

Problems with Delegated Proof of Stake

Delegated Proof of Stake comes with several problems.

  1. Collusion: Witnesses can collude and vote for each other. This would foster their position as witnesses. And with the block rewards, their voting power rises, leaving other witness candidates behind. This problem gets even more severe since the active witnesses receive most of the block reward and can increase their voting power.
  2. Protocol changes: In many DPoS blockchains, it is not clear how to deal with changes of the protocol. In PoW or PoS systems, nodes that change the protocol would create a fork making it easy for supporters of the protocol change to follow the amendment. In DPoS, it would require a re-election of the witnesses supporting the fork.
  3. Inattentive voters: As mentioned in the paragraph voting decay, voters need to keep up with news about witnesses and witness candidates. While this is actually positive, because voters must inform themselves about the network, it is cumbersome and in connection with automated voting might lead to undesired outcomes.
  4. Marketing: Witness candidates need to gain popularity to be elected. To achieve this, they can spend money on marketing campaigns and pay voters for their votes. Successful witnesses can finance their marketing efforts with the block rewards, which gives them an advantage over unsuccessful candidates.
  5. Denial of Service: Witnesses are known and thus vulnerable to DoS attacks.