Looking for stability in proof-of-stake based consensus mechanisms
The Proof-of-Stake (PoS) consensus algorithm has been criticized in the literature and in several cryptocurrency communities, due to the so-called compounding effect: who is richer has more coins to stake, therefore a higher probability of being selected as a block validator and obtaining the corres...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2024-12-01
|
| Series: | Blockchain: Research and Applications |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096720924000356 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850137216223805440 |
|---|---|
| author | Alberto Leporati Lorenzo Rovida |
| author_facet | Alberto Leporati Lorenzo Rovida |
| author_sort | Alberto Leporati |
| collection | DOAJ |
| description | The Proof-of-Stake (PoS) consensus algorithm has been criticized in the literature and in several cryptocurrency communities, due to the so-called compounding effect: who is richer has more coins to stake, therefore a higher probability of being selected as a block validator and obtaining the corresponding rewards, thus becoming even richer. In this paper, we present a PoS simulator written in the Julia language that allows one to test several variants of PoS-based consensus algorithms, tweak their parameters, and observe how the distribution of cryptocurrency coins among users evolves over time. Such a tool can be used to investigate which combinations of parameter values allow to obtain a “fair” and stable consensus algorithm, in which, over the long term, no one gets richer or poorer by the mere act of validating blocks. Based on this investigation, we also introduce a new PoS-based consensus mechanism that allows the system to keep the wealth distribution stable even after a large number of epochs. |
| format | Article |
| id | doaj-art-3bca01f87be9460491ec67db28ebf78a |
| institution | OA Journals |
| issn | 2666-9536 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Blockchain: Research and Applications |
| spelling | doaj-art-3bca01f87be9460491ec67db28ebf78a2025-08-20T02:30:55ZengElsevierBlockchain: Research and Applications2666-95362024-12-015410022210.1016/j.bcra.2024.100222Looking for stability in proof-of-stake based consensus mechanismsAlberto Leporati0Lorenzo Rovida1Corresponding author.; Department of Informatics, Systems and Communication, University of Milano-Bicocca, Viale Sarca 336, Milan 20126, ItalyDepartment of Informatics, Systems and Communication, University of Milano-Bicocca, Viale Sarca 336, Milan 20126, ItalyThe Proof-of-Stake (PoS) consensus algorithm has been criticized in the literature and in several cryptocurrency communities, due to the so-called compounding effect: who is richer has more coins to stake, therefore a higher probability of being selected as a block validator and obtaining the corresponding rewards, thus becoming even richer. In this paper, we present a PoS simulator written in the Julia language that allows one to test several variants of PoS-based consensus algorithms, tweak their parameters, and observe how the distribution of cryptocurrency coins among users evolves over time. Such a tool can be used to investigate which combinations of parameter values allow to obtain a “fair” and stable consensus algorithm, in which, over the long term, no one gets richer or poorer by the mere act of validating blocks. Based on this investigation, we also introduce a new PoS-based consensus mechanism that allows the system to keep the wealth distribution stable even after a large number of epochs.http://www.sciencedirect.com/science/article/pii/S2096720924000356BlockchainProof-of-stakeCompounding effectWealth distributionTokenomics |
| spellingShingle | Alberto Leporati Lorenzo Rovida Looking for stability in proof-of-stake based consensus mechanisms Blockchain: Research and Applications Blockchain Proof-of-stake Compounding effect Wealth distribution Tokenomics |
| title | Looking for stability in proof-of-stake based consensus mechanisms |
| title_full | Looking for stability in proof-of-stake based consensus mechanisms |
| title_fullStr | Looking for stability in proof-of-stake based consensus mechanisms |
| title_full_unstemmed | Looking for stability in proof-of-stake based consensus mechanisms |
| title_short | Looking for stability in proof-of-stake based consensus mechanisms |
| title_sort | looking for stability in proof of stake based consensus mechanisms |
| topic | Blockchain Proof-of-stake Compounding effect Wealth distribution Tokenomics |
| url | http://www.sciencedirect.com/science/article/pii/S2096720924000356 |
| work_keys_str_mv | AT albertoleporati lookingforstabilityinproofofstakebasedconsensusmechanisms AT lorenzorovida lookingforstabilityinproofofstakebasedconsensusmechanisms |