What is Delegated Proof-of-Stake?
A decentralized blockchain network needs a consensus algorithm to replace the accountant, administrator, bank, or company who traditionally decides which transactions are valid and in which order they should appear in the ledger. . It not only functions as a decentralized firewall to prevent attacks and manipulation, but also as a way to store verified transactions page-by-page – or block-by-block – into the distributed ledger.
DPoS is the way Qredit works behind the scenes to form a trustless public ledger of transactions on the network and to replace the central authority. Utilising this trustless system gives the network a way to agree which rules and methods of verification should be applied to reach a universal consensus of the ledger.
Qredit’s DPoS consensus algorithm is a decentralised governance, utilising 51 main nodes to run the network and validate all transactions. Every 8 seconds, all transactions are placed into a block and added to the blockchain if verified by these nodes. Each node verifies a block every 8 seconds. Each nodes position changes randomly each round, around every 7 minutes.
The network rewards every verified block with 2 newly created XQR-tokens. An efficient Delegate can receive about 422 new XQR-Coins every day. This is a way to incentivise node runners to secure the network while introducing a small inflation rate to supply adoption. In this way, it is similar to bitcoin miners and the bitcoin network.
These 51 nodes are chosen by a decentralised voting system where every XQR holder has a voice to elect which delegate nodes should validate transactions and run the network. Delegate Nodes ask for public votes quite similar to a political campaign. The node operator makes a proposal and the public holds them accountable to secure the network. Proposals can offer a wide variety of contributions, from creating a project to grow the ecosystem to sharing part of their earned block creation rewards.
Qredit’s modified delegated proof of stake algorithm is also democratic method to let the whole community decide on future Qredit updates. In contrast to other consensus algorithms, which require thousands of electricity wasting devices and high fees to secure the Blockchain, Qredit receives the same result with 51 forging Delegate nodes, low fees and high transaction speed.