Quick Summary

Nominated Proof-of-Stake (NPoS) is a consensus mechanism used by Polkadot where nominators select validators to secure the network.

• In an NPoS system, nominators delegate their cryptocurrency to trusted validators, and the network ensures that stakes are distributed fairly among them.
• NPoS nominators can lose their stake if the validators they choose perform poorly or act dishonestly.
• NPoS enhances fairness, security, and efficiency by ensuring a balanced validator selection process.

‍

Nominated Proof-of-Stake (NPoS) is a unique consensus mechanism employed by Polkadot, the innovative blockchain ecosystem, that combines elements of Proof-of-Work (PoW) and Proof-of-Stake (PoS). In this innovative approach, participants, known as nominators, support validators responsible for securing the Polkadot network. Nominators, in NPoS, carefully select validators they trust and delegate their cryptocurrency to them.

‍

NPoS vs. DPoS

In contrast to the Delegated Proof of Stake (DPoS) consensus mechanism, where validators are often weighed by stake, potentially leading to disproportionate control by high-stake validators, Polkadot's NPoS takes a different approach. Nominators in NPoS select up to 16 validators they trust, and the network automatically distributes the stake among them in an equitable manner. This process utilizes various tools, including election theory, game theory, and discrete optimization, ensuring a fair and secure validator selection process while avoiding the concentration of power among validators.

While DPoS networks do not subject delegators to loss of stake based on a validator's behavior, NPoS in Polkadot introduces a nuanced approach. Nominators in NPoS face potential loss of stake if they nominate a validator that performs poorly or behaves dishonestly. This adds an additional layer of accountability for nominators, contributing to a more robust and secure network.

NPoS prioritizes fairness, security, and efficiency within the Polkadot ecosystem.