Delegated Proof-of-Stake (dPOS)
By CoinGecko | Updated on Mar 03, 2020
A consensus mechanism where selected members of a network are voted as delegates to validate transactions and produce blocks on a blockchain.
Members of the network vote for delegates through their holdings. Usually the highest voted delegates have the most power and tend to produce the most blocks and therefore rewards. Some protocols have built in mechanisms to balance it out.
Overall, the delegated proof-of-stake system was built to counter the energy use and efficiency issues of the proof-of-work blockchain, at the cost of some degree of centralization.
Related Terms
Rug Pull
Sudden removal of liquidity which typically leads to asset prices crashing from the lack of liquidity to absorb buy/sells.
Encryption
In cryptography, encryption is a process of encoding information the original form of information called plaintext via an algorithm called cipher. The encrypted message is now called ciphertext. Only authorized parties can decipher the ciphertext and convert back it to the original plaintext.
Faucet
A faucet usually represents a site or app where a user can navigate to for small rewards repeated over time.
Bull Market
A bull market indicates the direction of the market going in an upward trend.
Hungry for more knowledge?
Back to Glossary or Subscribe to our newsletter.