Crypto glossary
Delegated proof of stake (DPoS)
Delegated proof of stake is a consensus model in which token holders vote for a small, fixed group of delegates who produce blocks on the network's behalf.
In DPoS, holders do not validate blocks themselves. They use their tokens as votes to elect a limited number of block producers, often called delegates, witnesses or super representatives. The elected producers take turns creating blocks, and holders can move their votes at any time to replace producers who misbehave or perform poorly.
The model was designed by Dan Larimer and used in BitShares, Steem and EOS, which ran with 21 block producers. TRON uses 27 elected Super Representatives. Producers usually share part of their rewards with the voters who back them, which turns elections partly into a competition over payouts.
A small producer set allows fast blocks and high throughput, but it concentrates power. Large holders and exchanges voting with customer tokens can dominate elections, voter turnout is often low and producers can form cartels, a trade-off critics see as weak decentralization.
Example
A holder of 10,000 tokens votes for three candidates; if those producers stay in the top 21, the holder receives a share of their block rewards, perhaps 3% a year.
