CryptoEducation: Types of Proof-of-Stake

20.01.2023

The Proof-of-Stake (PoS) consensus algorithm has evolved into various models, each designed to improve scalability, efficiency, or decentralization. Here are some key variations: Delegated Proof-of-Stake (DPoS)Token holders delegate their voting rights to selected validators who process transactions and create blocks. This model (used in platforms like EOS) increases speed but may reduce decentralization. Leased Proof-of-Stake (LPoS)Token holders can "lease" their coins to other nodes to boost their chances of being selected for block creation. This model is notably used in Waves. Nominated Proof-of-Stake (NPoS)Used by Polkadot, this model allows nominators to back validators with their tokens. Misbehaving validators risk having the nominators’ staked tokens slashed, ensuring accountability. Effective Proof-of-Stake (EPoS)Introduced by Harmony, this version discourages centralization by rewarding smaller validators over large, powerful ones — promoting network fairness and stability. Pure Proof-of-Stake (PPoS)Used by Algorand, where validators are selected randomly and secretly, making it impossible to predict selection — enhancing the system’s security and reducing manipulation. Proof-of-Authority (PoA)A consensus mechanism based on validator identity and reputation. Widely used in BNB Chain, it requires validators to pass identity verification (KYC), offering fast transactions at the cost of centralization.