Proof of Stake

Proof of Stake (PoS) is an algorithm in which the blockchain network validators are selected based on the amount of tokens that have been staked behind them. Validators are entities who are charged with the important tasks of producing blocks (hence processing blockchain transactions) and validating the blocks that are produced by other validators.

Actors

  • Validators are entities who are running nodes to validate the Dock network.
  • Nominators are Dock token holders who stake their tokens on the candidates’ behalf, and receive rewards if the candidates get selected and start producing blocks.

Steps

  • Candidate validators publicize their candidacy on the Dock blockchain.
  • Tokens are staked in support of candidates, by candidates themselves or by nominators.
  • Nomination period ends.
  • Candidates with the largest stakes are automatically selected as validators.
  • Validators produce and validate blocks on Dock mainnet.
  • Validators and nominators are rewarded with Dock tokens.

Why Proof of Stake?

Increased decentralization

PoS distributes validator selection decisions across a network of nominators and validators, hence creating more decentralized power and greater security in the network.

Smaller carbon footprint

Proof of Stake consumes significantly less energy than Proof of Work like Bitcoin as it selects validators based on tokens staked, rather than relying on heavy computation by multiple nodes competing to validate.

Passive income for nominators

Dock token holders can earn passive income by nominating validators and receiving portions of the rewards earned by the validators.

Enhanced utility of Dock tokens

Use of Dock tokens in network governance and nominations greatly enhances their utility.

Further democratization of governance

Under PoS, Dock token holders can vote on proposed changes to the network by locking up their tokens.

Maximum Participation through a Permissionless Blockchain

While many of Dock’s competitors leverage permissioned blockchains and hence limit the access to their networks to the select few, the Dock network is fully permissionless, allowing participation by token holders as validators, nominators, and voters.

It is part of Dock’s vision to build a network that has maximum participation and widespread adoption, and we believe that this can only be achieved through decentralization, democracy, and transparency offered by a public blockchain that is open for all token holders, and free from the control of a single entity.