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Intermediate
Mar 17, 2022

Nominated Proof of Stake (NPos)

Nominated proof of stake (NPoS) is a type of blockchain consensus algorithm that uses stakeholder voting to determine which nodes are able to participate in the validation of new blocks. Only nodes that have been nominated by other voters are allowed to validate new blocks, and earn rewards for doing so.

Nominated proof of stake, or NPoS, is similar to proof of stake (PoS) in allowing users to earn rewards for validating new blocks, but it differs in that only nominated nodes are allowed to participate in block validation.

NPoS is designed to incentivize good behavior and punish bad behavior on blockchains. For example, if a block validator attempts to validate a fraudulent transaction, they will be penalized by losing some of their staked tokens.

This correction mechanism ensures that only honest and reliable nodes are allowed to participate in the nominated proof of stake consensus algorithm, which in turn helps to improve the overall security of the network.

Nominated proof of stake is a popular consensus algorithm among blockchain projects because it combines the security of PoS with the added benefits of stakeholder voting.

Different Roles Within Nominated Proof of Stake (NPoS)

There are two different types of roles that exist within nominated proof of stake: block validators and nominators.

Validators vs. Nominators

Block validators are responsible for verifying the validity of new blocks and adding them to the blockchain. In order to become a block validator, a node must first be nominated by another voter. Once a node has been nominated, they’ll be allowed to validate new blocks and earn rewards for doing so.

Nominators are responsible for nominating new nodes to become block validators. Only nodes who have been nominated by other voters will be allowed to validate new blocks and earn rewards for doing so. They play an important role in NPoS because they’re responsible for ensuring that only the most trusted and reputable nodes are allowed to validate new blocks. 

In summary, the main difference between block validators and nominators is that block validators are responsible for validating new blocks, while nominators are responsible for nominating other nodes to become block validators.

Examples of Nominated Proof of Stake (NPoS)

The nominated proof of stake consensus algorithm is used by many different blockchain projects, including EOS, Polkadot and Cosmos.

These projects have all implemented NPoS in different ways, but they all share the common goal of improving upon the existing proof of stake algorithm.