What Differentiates DPoS From PoS?
In Delegated Proof of Stake (DPoS), users vote in delegates, also known as validators, to verify and produce blocks. After successfully producing a block, validators may then distribute their block rewards to those who voted for them. Also referred to as ‘witnesses’ or ‘block producers’, only a certain number of these delegates are permitted; and they can change, as others can be voted in instead.
How Are Rewards Distributed in DPoS?
With DPoS, network users pool tokens into a staking pool and vote for the particular delegate they wish. When staking, network users do not need to send their tokens to a particular wallet. Instead, there is a staking mechanism or service provider they can operate through.
Users are incentivised to elect delegates who are likely to act in the network’s best interest. This is because users also receive a part of the rewards that are distributed to the successful delegates.
A user’s reward from their delegate is related to the portion of the total stake they represent. For example, if a user makes up 10% of the entire staking pool, they will receive up to 10% of the total rewards distributed.