What Is Delegated Proof-of-Stake

A decentralized blockchain network needs a consensus algorithm to replace the accountant, administrator, bank, or company who traditionally decide 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 ARK works behind the scenes to form a trustless public ledger of transactions on the network and to replace the central authority. Utilizing 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.

ARK's DPoS consensus algorithm is decentralized governance, utilizing 51 central 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. The order of each node is randomized after each round, although that is not fundamental to its security.

The network rewards every verified block with two newly created ARK. An efficient Delegate can receive about 422 new ARK every day. This is a way to incentivize node operators to secure the network while introducing a small inflation rate to supply adoption. In this way, it is similar to Bitcoin mining.

These 51 nodes are chosen by a decentralized voting system where every ARK holder has a voice to elect which Delegate Bodes 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.