Proof-of-Stake (PoS)

One of the biggest decisions when designing a Blockchain system is about selecting and then implementing the consensus protocol. The consensus protocol not only dictates how the consensus on the state of the blockchain can be reached within a decentralized network but embodies the governance model designed and imposed upon a blockchain system.

Proof of Stake (PoS) is a consensus mechanism where block validators are selected based on the number of coins they are staking. In this case, the term staking refers to the act of validators committing funds to the system. So validators can only participate in the process of producing new blocks when they stake their coins and are approved by Pools Chain. The locked funds will then act as collateral, meaning that malicious validators will most likely lose their stake and be kicked out of the network. On the other hand, honest validators will be rewarded as new blocks are produced (forged). Thus, we may say that a PoS blockchain achieves distributed consensus according to the economic stake that validators commit to the network.

Pools chain here proposesPoS for consensus, so that:

1. Blocks are produced by a limited set of validators.

2. Validators take turns to produce blocks similar to Ethereum’s Clique consensus design.

3. Validator sets are elected in and out based on a staking based governance.