Consensus algorithms are the most important aspects of blockchains. The reason is not too difficult to understand: without these mechanisms, all distributed systems will remain immutable databases or just mere illusions.
On blockchain platforms, consensus protocols ensure that any data being added to the public ledger is valid. This function keeps the system from being derailed by double spending or constant forking. For example, Proof of Work (PoW) systems use a mining process to achieve consensus. On another hand, Proof of Stake (PoS) platforms depend on minting and staking. In fact, there are hundreds of such protocols each having its own advantages and disadvantages. DAEX is actually following the same trend by developing a new consensus protocol called the Accumulated Signatures for Proof of Stake (ASPoS).
In this article, I intend to take a deep dive into the ASPoS consensus by discussing it under broad categories like:
1 Rewards and Penalties
2 Consensus Process
3 Throughput
4 Security Measures
Rewards and Penalties
Consensus mechanisms deploy different schemes for rewarding transaction verifications. While positive activities are generally permitted and encouraged, malicious acts attract stiff penalties.
On Proof of Work, miners get rewards for investing in the creation of new blocks. PoW systems naturally discourage forking because of the potential high negative costs involved.
On Proof of Stake, however, validators obtain rewards for verifying new blocks and their power depend on their individual stakes or tokens owned. In such an environment, when there is a fork, a validator receives a duplicate copy of his/her stake on the forked blockchain. With this, nothing prevents the validator from signing off on both sides, claim double transaction fees as reward, and double spend the coins . This is actually a description of the classic "nothing-at-stake" threat encountered on all PoS systems.
ASPoS solves this problem by designing a new system comprising five different types of rewards which encourage positive node activities and strictly forbid forking or double-spend. These are:
Rewards for block creation.
Rewards for adding proof of penalization.
Rewards for adding proof of revenue.
Rewards adding proof of idleness.
Rewards for participating in block validation.
These intricate system of rewards carry incentives for participating in block creation and rapid block validation, while idleness and double-spend are swiftly penalized.
The Consensus Process
Issues relating to consensus protocols involve mining or staking, and new block creation. For instance, PoS systems use staking to reach consensus and create new blocks. In fact, each consensus mechanism and its variants have intricate rules for reaching consensus and maintaining security on the network.
As far as new block creation on ASPoS is concerned, there are four different kinds of node involved:
Regular nodes
Validation nodes
Quasi-creator nodes
Creator nodes
The normal or regular nodes transform into validator nodes by paying and securing a certain deposit. After this, validator nodes with the greatest activity levels are selected to become the quasi-creator nodes. Finally, the chosen quasi-creator nodes undergo a lottery process via a Verifiable Random Function (VRF) to determine the lucky one that will become the creator node. Subsequently, this creator node forms and then broadcasts a new block. This elaborate but effective process prevents all sorts of Sybil, long-range, DDoS, and node bribery attacks. The randomness in the system also discourages malicious node activities, since the chance of any node being selected as the final creator node is not certain.
On ASPoS, the fork convergence process during block creation is achieved by an intricate set of rules which discourages and eliminates malicious nodes from the system. This works by awarding staking power to each node based on its deposit amount, activity level, and a Clearing Value Factor or CVF. Nodes with more contributions to the system stand to directly gain more rewards for participating in the consensus process. Therefore, ASPoS has also been called a CVF-PoS consensus, because it promotes the optimal functioning of the system by encouraging nodes to maintain a high CVF.
Throughput
In blockchain, throughput has a lot to do with performance, speed, and scalability. All blockchain platforms always strive to achieve greater throughput and efficiency, no matter the consensus mechanism adopted. There are two effective ways of boosting throughput on a blockchain network which are by sharding and by delegating some nodes to participate in consensus to free up other nodes as seen in DPoS systems.
Sharding in distributed networks is a process for partitioning a large database into smaller, faster, and simpler to manage parts. As seen on Ethereum, sharding improves throughput by implementing consensus in parallel. In contrast, node delegation method uses a simple delegate system during the consensus process, just like in real elections. But, the arrangement is vulnerable to attacks from powerful delegates who may collude together to attack the entire system.
DAEX, on the other hand, adopts the highly efficient ASPoS and sub-chain sharding to handle throughput problems.
Security Measures
To start with, all PoS systems faces one critical issue called the nothing-at-stake problem. This arises from the fact that nodes in such systems have nothing to lose by staking on both sides of a fork to get maximum rewards. Fortunately, ASPoS devised an ingenious technique of removing this threat by using an innovative reward distribution scheme. Unlike other PoS variants, ASPoS rather compensates nodes that participate in the block validation process.
However, the block having the lowest selection coefficient has the greatest chance of being recorded on the network. Nodes with malicious activities have no chance of being selected and lazy nodes that refuses to participate in the process will be penalized. Also, quick-acting validator nodes have greater rewards. By this, the security and smooth operation of the network is safeguarded.
Additional ways by which ASPoS guarantees security on DAEX include:
Double-spend problems are prevented by reporting of any node creating multiple new blocks as a dunkle node and making it to forfeit its deposit.
The VRF lottery function ensures the randomness of the new block creation process, thus eliminating DoS attacks and node bribery.
Long-range attacks are prevented by the system's limited stipulated time between consecutive new block creation.
Finally, isolation attacks are mitigated by using a system of node accumulated signatures.
In conclusion, ASPoS is a formidable consensus mechanism which complements DAEX's unique architecture with an efficient consensus process, greater efficiency and better security measures. Its clearing and settlement processes are safer, cheaper, more efficient, and better suited to DAEX than similar cross-chain technologies.
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