DPOS (HIVE) - Let's Talk About It

in LeoFinancelast year (edited)

▶️ Watch on 3Speak

Not all Delegated proof of stake chains (DPOS) are equal. When defending DPOS vs. ignorant attacks, we must first understand the basics of 100% needed for DPOS chains to be sustainably secure and future-proof.

  • No premine. Token distribution is by far the most important metric of any DPOS chain.
  • Long staking period with governance vote delay on the newly staked coin. For example, 90 day lock period, 1-month delay to vote once staked. The reason you need a long lock-up is to avoid exchanges use customer funds to vote on governance. Also, it provides skin in the game for large stakeholders, which deturs several bad habits I'll get into below.
  • Layer 1 immutable account system. Communicating in one dedicated censorship-resistant area is key; being scattered across several web2 platforms is a bad backbone to rely on.
  • Graphene-based. Remove the VM or anything else from layer 1 to create fast, feeless token transfers.
  • PoB token distrubution, (or wide token distrubution).
  1. "In DPOS, you only need about 100 nodes in the network … The problem is that if you have 100 nodes, the system is much more centralized. You can denial of service them. Because you have to vote for them, the nodes that win will be the nodes that everyone knows. So it is much easier to attack the people running the nodes. ISPs can shut them down; companies can shut them down; governments can shut it down fairly easily."

Anon, spread out worldwide, can be far more than 100 nodes. The social dynamic of people jumping in to help. Dog fight mentality. Anyone can see who the largest nodes on PoS are, see who locked up what, and some will be well known. The same with BTC. We know all the largest BTC miners pretty much; most are public. When dealing with large capital, you're not going to be able to hide that esp when onchain. The largest nodes will be doxed. They don't care because they want to be compliant and not break any laws. DPOS, on the other hand, can have anyone join and be a node and get voted in with little to no stake, meaning they need to be a coder, not a giant stakeholder. Even PoS, most won't have 32 eth and will pool to larger, more reputable pools. Being an anon very large stakeholder on PoS is difficult and does more harm finically than not. The more you have at risk, the less you want to break the law. You're not going to have large mafia PoS validators; they'll use underground DEFI if they want to yield on their stake. The rewards for illegally risking that much do not seem attractive.

Node count becomes very irrelevant once a even token distribution has happened.

  1. "Delegates could form cartels:
    Delegates can organize into cartels by concentrating the role of validation in a smaller number of hands. This not only makes it less decentralized but also makes it less resilient."

On BTC or PoS, in the end, you won't get more than a handful of very large mining pools that run the network. This isn't speculation; this is why, by looking at the top hash rate for the top miners, it always consolidates. People will delegate their resources to the most reputable miners; that's how it always will be. The difference between PoS and PoW, where I'm a small miner, and I disagree with the large mining pool, my influence on the network once I break away is very small. However, on DPOS, you get a direct say with your votes, whereas it does not cost money to have your input. For example, let's say I'm a small miner on BTC. Odds are I will never get a block or earn any rewards in my lifetime; that's how competitive BTC mining has become. This means a small miner on a big PoS or PoW network is akin to a tree falling in the forest with no one around to hear it.

Moreover, it cost money to be a node on PoS or PoW, and you must keep infrastructure up and running. So, as a small miner, you get no say and will earn no rewards and be penalized in resource cost for even trying. Therefore you must delegate your resources to larger mining pools. This is the same concept as DPOS. No matter what we do as humans, we consolidate, elites always extra from the common people who do not have the means to participate competitively in the same field. Mining pools are just ghetto DPOS when you break it down.

  1. "DPoS creates incentives for witnesses to form cartels and bribe voters."

Mining pools "bribe" users all the time; that's all they do. They offer competitive rates to noncompetitive individuals who want to earn their small mining rigs and/or stake. The best way to avoid people being bribed is by having long lock-ups at stake. Long lock-ups mean whales prefer better witnesses over earning short-term gains. Imagine it takes 90 days to fully unstake; if you have shitty witnesses by the time you fully unstake, the price could crash, netting you way less than the pennies you earned voting for trash witnesses. This isn't speculation; we have real-life examples of zero witness bribes on the Hive technology.

Social defense is a must for any chain; I explain this in detail; Refer to social defense: https://peakd.com/decentralization/@theycallmedan/decentralisation-in-blockchains-lets-talk-about-it-part-2-social-defense

  1. "On PoS, I can send tokens p2p."

Token distribution for a fair consensus is all that matters—P2p on blockchain myth. You're only allowed to send p2p because the consensus allows you to. You still need agreement from the network regardless. your transaction needs to be updated on everyone else's copy of the ledger. You trust that the token distribution is enough that your transaction gets denied. As long as you have a good token distribution on PoS, you get zero benefits sending it "yourself."

  1. "The rich may get richer:
    People's vote strength is determined by how many tokens they have, which means that people who own more tokens will influence the network more than people who own very few."

DPOS, the large stakeholders do not earn money from being in consensus; only witnesses do. Witnesses without a big stake can still be voted into consensus. To combat the centralisation of token distortion, one must use PoB, which encourages stakeholders to "give away" tokens to receive some themselves. Hive PoB has been perfected over five years to reach a very good equilibrium on game theory for token distribution.

To get into every nook and cranny of the world, one must have a fast-scaled base layer. Token transfers must be fast and feeless, or you cut out a large portion of the population. Hive being so accessible, literally anyone from anywhere can sign up for free, make a intro post and earn some Hive. No other platform in the world offers this, and it's been a very powerful driving force in the network effect we see today.

  1. "Apathy can kill:
    Without a large number of engaged users, the system will not function as intended"

While true, and most DPOS chains you see exchanges are the largest voters, that is due to a short lock-up. Having layer 1 social solves this. This is not speculation. You can see in great detail how involved the community becomes when they know each other. PoB encourages communities to share stories we have witnessed, but I know their lives, likes, and things that you don't know about your ETH/BTC mining pool operators. Social pressure to vote, being able to communicate, wanting to form relationships, all this comes with layer one social.

▶️ 3Speak


lol the bribing you mentioned at 9mins really happened a few months ago and someone dm'd me about it, didn't go well for the briber.

No matter what kind of governance you are talking about,
The Attack is money.

That is super apt and to the point.
Buying votes in the legacy system (propaganda/advertising) acts the same way.

Awesomely informative as always, Dan! I look forward to the ones upcoming - almost four years here on the blockchain, and I'm still having a hard time wrapping my brain around some of this stuff, so videos like this really help.

One slight niggle though - you killed it before the usual, "cheers, peace." Meanwhile, I'm over here like...


haha. thats weird it didnt make it in there, must have got excited and stopped recording just at that time. Well, I'm going to kill it here, cheers, peace!

Yay! Thanks for that. 😂

The difference between POS and DPOS had always been kind of iffy to me, no longer now. Gracias!

Mining pools are just ghetto DPOS when you break it down.

Shots fired!

The thing is that DPoS works only if you have committed and trustworthy community as #Hive.

Not all projects have the community that will fork if the underlying ideology gets "compromised".

The most important layer is layer zero.

Hell yea dan!! Thank you for being such a strong voice for our community!
Just like taskmaster I look forward to every new piece of content you put out! And whenever i hear some discontented hivean bitching about this or that, I just think back to positive things that folks like you have to say.
Thanks Dan! You da man!

Thanks for being inspiration to the community @theycallmedan. Good post. I always learn new things from your post. Keep enlighten us always. Lots of love ❤.

I agree on the witness vote thing and the reputation. I think on DAO fund it could be different.

Think about someone who bought 50M hive over years, could be possible now if someone buys on daily basis.

And now we think he is super evil WEB2 investor that wants to attack massive web3.

If a fork would be premade + a fast and efficient sockpuppet election overnight into play in the premade fork, could be dangerous.

And now I remember, we have 4 weeks gov vote charging. BTW, I think it would not hurt to increase it to 13 weeks and make 2 power-up ways. One short and one long :)

GG hive is impossible to overtake.


Man this is so good. Will share this with every critic, as it really addresses all points.

Insightful post. A great dig into DPoS, I know I learned more than a few things here. Thank you!


Posted Using LeoFinance Beta

Despite my short time in the world of blockchain and cryptocurrencies, I still have a lot to learn😅
I need to please ask you something...And forgive my ignorance 😫😓.
what is this lock-ups ? 🤔

A pesar de mi pequeño tiempo que ando en este mundo de la blockchaim y de las criptomoneda sin duda me queda mucho por aprender😅
Necesito por favor preguntarte algo..
¿ que es eso de lock-ups ? 🤔 y perdona mi ignorancia 😐😓

Interesting news as ever. Thanks

You can't buy passion. You can't buy community.

Well said.

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very informative post sir. thank you for sharing