We talked about "PoS Consensus (1) – History of PoS Birth", 2019 can be called "PoS Year", but the PoS consensus mechanism has been around for 9 years. Why is the PoS that has been tepid in the past nine years the focus of the blockchain world overnight? This starts with the Staking economy.
Staking – "mining" under the PoS consensus
Staking is essentially an interest under the PoS consensus mechanism. In the blockchain with PoS consensus, the node needs to be responsible for packaging transaction information, maintaining network operations, and participating in community governance. This process is Stake. As a reward, the node can obtain a certificate of system issuance, the way of this benefit is Staking. We can even understand it simply and rudely: Staking is the “mining” under the PoS consensus. Of course, Staking and mining have many differences in essence and details. We will make detailed comparisons in the following articles.
Since it can be analogized to mining, there will naturally be roles such as "miners" and "mines". There are three indispensable main roles in the Staking economy. In addition to the blockchain system, there are also currency holders and verification nodes, which can be analogized to miners and mines in the PoS mechanism.
- In addition to halving expectations and institutional entry, Bitcoin eventually won the world's top five reasons
- Ling listening | "V God" is not God: Vitalik Hangzhou line 48 hours close-up observation
- Mining from entry to proficiency (eight) mining industry ecology - peripheral services
- The employee remotely steals 100 bitcoins from Bitland and was sentenced to one year and three months in prison.
- IBM, Softbank and blockchain platform TBCASoft collaborate to promote mobile payment blockchain
- Viewpoint | Economic Considerations for Ethereum 2.0 Migration
First of all, let's talk about holding money users. As we mentioned in the previous article, the PoS mechanism is somewhat similar to the shareholding system in the real world, and the system issued is equivalent to shares. By analogy, a holder of a currency is equivalent to a shareholder in a blockchain system, and shareholders have a range of rights. For most users, the distribution of dividends is the biggest concern for them. In the PoS system, the way to get dividends is very simple, you only need to take your own pass to Staking.
Independent Staking or agency Staking?
Many friends who have just contacted the PoS type pass may have such doubts: Why can't they take their own Staking and need to participate in the agency Staking? In fact, because some projects Staking have higher requirements on technology and equipment, the average user's own Staking cost is higher and the risk is greater, which is not as cost-effective as the participating organization Staking.
In the previous article we mentioned a noun, the Slash mechanism. The introduction of this mechanism effectively solves the problem of “no interest”, and its processing method is simple and rude: once the behavior of the system does not run occurs during the Staking process, the certificate used by the node for Staking will be deducted by a certain amount. In the actual application process, the system can not judge the cause of the node error, and at the same time punishing the evil node, it will also "mistake" a batch of dropped or faulty nodes. For ordinary users, Staking's cost of failure is much higher than its benefits, so it needs the help of “professional agencies” .
And this "professional institution" is the verification node. Different systems have different requirements for verifying nodes. Generally, they are related to the obtained equity voting. For example, Cosmos is the one that gets the voting right in the registration node. Ordinary users can entrust the pass to the verification node, and then the node will perform Staking. The “professional organization” with outstanding strength and abundant funds can better avoid the risk of Slash . In return, the node has the right to determine the distribution of revenue, and the user can also choose the node based on the revenue and visibility.
Verify that the node is an excellent buffer between the user and the system
In addition to avoiding Staking's mistakes and being led by Slash, the flexibility of the organization Staking can also effectively enhance the user experience, allowing users to calmly grasp the rising opportunities and avoid falling risks.
Although Staking allows the holder of the coin to obtain a stable “sleeping income”, its income is calculated based on the currency standard. Due to fluctuations in the currency price, it is likely that there will be “more coins, less corresponding coins”. When the user finds that the price of the currency fluctuates greatly during the Staking process, it cannot be immediately taken out and cashed out. Because most PoS mechanism systems are used to prevent long-range attacks (first dig a pit, and then talk about it later), it is required to lock the Staking pass. The lock period is determined by the system, usually around 15 – 21 days. In other words, the Staking revenue obtained by the user is actually a compensation for the opportunity cost and the liquidity cost .
In order to improve the user experience, some projects refer to the principle of bank deposits, and begin to try to design a dynamic system related to the rate of return and lock time. That is, the longer the lock period, the higher the rate of return, the user can choose to give up the proceeds, and keep it with you. However, whether this system can guarantee network security when the currency price fluctuates sharply needs to be tested: if the currency price plunges, the user will take out the vouchers in the system, and the mortgage rate of the whole network will plummet. At this time, the security of the system Will be greatly threatened. The original intention of the Staking mechanism is to protect the security of the network. If the user of the currency is allowed to carry out Staking but ignores the security of the network, it is actually putting the cart before the horse.
In contrast, it seems preferable to provide a dynamic system of presence and availability to the average user by the verification node. The node can set up a fund pool and meet the needs of the user to raise the money in advance by means of advance payment. Of course, due to the “crowding” risk, the nodes that provide such services must have sufficient financial strength.
The significance of Staking is not only the collateral to get the benefits, but more importantly, let more users participate in the blockchain community governance. The incentive model is essentially to encourage resource holders to actively participate in network construction after decentralizing resources, thereby improving the overall utilization of social resources.
With the development of Staking, blockchain technology is expected to gradually appear in all walks of life, and even the situation that “ everything can be Stake ”: up to finance, big data, down to bandwidth, flow, can all pass Staking economic model Get higher resource utilization and revenue.