Polkadot’s New Proof of Concept Could Enhance Decentralized Governance
The Alexander testnet on Polkadot was upgraded with new features of which the most significant is improved staking governance, as per an announcement by the development team on May 20, 2019. Polkadot was created by Ethereum and Parity co-founder Gavin Wood, who also co-invented the Solidity programming language.
A New Form of On-Chain Governance
To run a functional network on Proof of Stake (PoS), the network needs a high number of nodes and validators along with a huge chunk of capital (in the form of native tokens) to be locked up on the network.
In response to this, Polkadot has introduced a new staking feature, Nominated Proof of Stake (NPoS), which allows for a more decentralized governance implementation relative to PoS consensus.
Imagine a form of human governance where the voters who brought an incompetent leader to the helm were punished along with the leader. Voters would be asked to contribute to their candidate’s campaign financially and would reap the rewards if the candidate was successful, but also share in the punishment if they’re incompetent.
By stretching accountability to the masses, collective decision making takes a more meritocratic approach and allows only worthy candidates to end up in power.
This is precisely how NPoS works. In giving nominators an incentive to pick strong validators and punishment for picking weak ones, the network’s best interests will always be at the center of decisions. Validators can choose a particular stake, say 60 percent of their total stake with the remaining 40 percent staked by nominators who feel these validators will not endure the punishment.
Validators are punished for being offline because their presence is essential for the network to function correctly. Hence when a nominator feels a validator is likely to stay online, they will stake and vote for them.
The higher the validators token contribution to the stake, the lower the rewards will be; rewards will be distributed pro-rata based on participation.
Punishment on Polkadot’s NPoS
Punishment for being offline is allowed a maximum of four times before being booted off the network until users can improve their Internet connectivity issues and rejoin. New options on the network upgrade will enable them to choose the amount of risk and safety they prefer.
Validators can now choose to be found offline ten times before being booted off with the implied understanding that it means they are risking more of their capital.