How to bet cryptocurrencies in 2022 explained

DPoS is a version of PoS where participants can pool tokens in a staking pool to determine a block validator.

In 2013, Daniel Larimer developed an evolution of PoS in which validators are joined by a new group, the Delegates. In the resulting Delegated Proof of Stake (DPoS), delegates exist as community representatives, as indicated by those holding tokens. These can then vote on which validator can create a new block and be entitled to a reward paid through transaction fees. Delegates would also have to approve the network rules and maintain the stability of the blockchain, a position any network member could have, albeit only for a short time.

Any user involved in the staking process and eligible to become a delegate is referred to as a “witness”, the name stemming from their ability to observe transactions and act as nodes in the network. That said, unlike delegates, a witness does not have the ability to set the basic network rules. Both witnesses and delegates are voted on through a reputation model.

Tokens in DPoS-based blockchains are divided into available tokens (that are in circulation) and tokens that are at stake. Each user independently determines their wager amount and, once selected, the wager may not be spent. These coins can only be used to witness, vote for delegates and participate in network management through smart contracts. The concept is currently being applied in Tron (TRX) and EOS, among others.

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