What you should know about Nominated Proof of Stake (NPOS)
It is good to have an understanding of the consensus mechanism of different blockchains if you are interested in growing in the crypto industry.
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You must not become a blockchain developer before knowing about the consensus mechanism of a blockchain network. However, there are many consensus mechanisms like proof of work, proof of stake, and nominated proof of stake which this post is meant for.
| Nominated Proof of Stake |
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Just as it is called nominated proof of stake, it means before becoming a validator some people must nominate you first.
It is like a democratic system of government where every eligible citizen who is qualified to vote will go out to the polls and cast their votes.
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However, when it has to do with Nominated Proof of Stake, it is only the network participant or token holders can choose validator that would be verifying, validating transactions, creating blocks, updating the blockchain, and so on.
Based on what we have discussed so far it is now clear to us that "Nominated Proof of Stake" is simply the variation of the standard (PoS) proof of stake model that is more of a democratic system, unlike proof of stake.
In the NPOS network participants (stakeholders, or token holders) will have to nominate a validator who will be responsible for updating the blockchain, by securing it creating blocks, validating transactions, maintaining price feeds, and so on.
| Components |
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- NOMINATORS and VALIDATORS
Nominated Proof of Stake, has two sets of people who play important roles. Nominators are stakeholders, or token holders who nominate validators with clean records, performance, experience, and trust.
Validators, on the other hand, are like Steemit witnesses responsible for validating transactions, checking price feeds, creating blocks, and maintaining the blockchain.
- STAKING and REWARDS
The fundamental aspect of nominated proof of stake is staking. When it comes to staking participants will have to lock up a certain amount of their holding before becoming nominators.
As for validators they are chosen based on the amount of stake they have. As for rewards both nominators and Validators are entitled to receive rewards which is usually proportional to their stake.
- SLASHING MECHANISM
To ensure the network is trustworthy enough, nominated proof of stake makes us of slashing Mechanism to checkmate the activities of validators so they would conduct any malicious activities, if any validator is found committing fraud, a portion of the validator and nominator stake will be slash or removed.
| Advantages of Nominated Proof of Stake |
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- SECURITY:
The slashing Mechanism that is adopted by NPOS makes the system more secure and expensive for anyone to think of hacking the system.
- ENERGY EFFICIENT
NPOS makes use of less computation power which makes the system more friendly for everyone.
DECENTRALIZATION
It encourages wider participation of people from the community, which makes it more decentralized.
Conclusion
NPOS is more like a democratic consensus mechanism that is fair enough when nominating validators which we have learned in this post. This post only serves as educational material and a guide to educate you about the consensus mechanism in which Nominated Proof of Stake (NPOS) is what the post focuses on.
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