The PoS (Proof-of-Stake) consensus algorithm and its modifications are becoming the preferred method of protecting cryptocurrencies in the market. Ethereum, the third-largest cryptocurrency network by capitalization, is preparing for a full transition to PoS, which not only reduces power consumption but also significantly increases the level of security of the entire network. The market demand for services for working with assets of PoS networks, such as the P2P Validator, is growing. Launched this year, the project provides users with the ability to manage their own assets in PoS networks without having to trust third parties. What the key advantages of this service are and how it will help in the development of P2P economy will be explained in this write-up by DeCenter.
Advantages of PoS over PoW
For the first time, the idea of using an alternative to PoW (Proof-of-Work) consensus algorithm was proposed back in 2011 at the Bitcointalk forum. The crypto community took another year to implement the new PoS protocol as an algorithmic method of protection, in which the probability of finding a new block is proportional to the ownership share of the internal cryptocurrency of the network. For the first time, this protocol was successfully used in 2012 in the cryptocurrency PPCoin.
Today, PoS networks have several key advantages over those running on PoW. First of all, it is a solution to the problems of PoW networks associated with high electricity consumption. Since instead of the user’s computing power, the leading role is played by the amount of cryptocurrency in the account, PoS networks save significant funds to protect their blockchains. Also, 51-percent attacks become impractical, since it will lead to destabilization of the cryptocurrency, which is unprofitable for the attacking side in the first place.
Within the PoS algorithm, validators are responsible for maintaining the network operability. Unlike miners, for whom the computational power of their nodes plays a key role, what’s important for validators is their stake, or share of network cryptocurrency. The more the stake that is offered as a deposit, the higher the reward for each block. Other members of the network can support the validator and delegate their coins to them. For this, they will receive a portion of the remuneration proportional to the amount delegated.
About the P2P Validator Project
The P2P Validator platform was founded in 2018 after the success of projects launched by Chaincode developers and crypto entrepreneurs. The goal of the project is to open up new opportunities for a developing P2P economy to users of PoS networks. For this, the project team launched the gateway platform for managing and staking digital assets with a user-friendly interface. Thus, the project not only optimizes the operation of existing networks but also promotes the development of new PoS technologies.
Today, the platform supports the operation of Tezos XTZ (mainnet), Polkadot (testnet), Cosmos (testnet), IRISnet (testnet), and Solana (testnet) blockchains, where users can delegate their assets to validators. Soon, Nucypher and Dfinity networks will be added to this list, as well as the possibility of using cross-platform analytical tools that will help you track delegated stakes and available rewards.
Through the P2P Validator, users will be able to delegate their assets to validators, vote and participate in the further development of networks, as well as maintain key values and a set of rules of their decentralized community, thereby fully complying with the social and algorithmic PoS consensus. The platform will also help in stake management and represent the interests, rights, and wishes of each user, who for one reason or another cannot take an active part in the development of the network. At the same time, the user will still receive rewards from validators minus 10% of the platform fee.
Project Commercial Values
Among the fundamental values that the team supports are five key areas worth noting:
Security. Protecting ownership and user information is a priority of the project. Each member of the P2P Validator community has the right to anonymity and is not required to disclose its financial data to other project participants. Also, each user has the right to arbitration in case of violations as a result of actions of other users or the work of the service.
Transparency. The project community can track all actions and decisions of the team, which provides data on project development, revenue, the size of stakes and the amount of delegated assets, as well as the status of PoS networks.
High tech. P2P Validator provides users with a single interface through which they can manage their assets in various PoS networks. Soon, the team will also add the possibility of staking through open-source DApps, among other tools needed by the project community.
Side benefits. The goal of stacking is to generate revenue and introduce new coins into the network. Project participants receive all rewards for stacking operations except 10% of the commission charged by the P2P Validator service. In this connection, the project team is interested in working with the most successful PoS networks, the competent management of which ensures the growth of the value of the entire system and a high level of income for delegates.
Efficiency. The project team is an interested party in the successful development of each of the presented PoS networks, because, like users, it has assets in staking. In this regard, each business decision is based on detailed financial analysis and experience of the team to avoid excessive delegation and help each network thrive.
P2P Validator Development Plans
The P2P Validator project team aims to become a leader in the field of education and training to work with all components of PoS networks. To this end, part of the profits will be directed at the creation of an international educational center and to the production of educational materials: webinars, guidelines, and news platforms.
Obviously, one of the key priorities of the project is to create a cohesive and educated community that will contribute to the successful and long-term development of the entire P2P economy. In this regard, a significant part of the income will be directed to the support of all project participants and attracting new members who support the values of the PoS consensus.
The project will also launch support for open-source DApp developers. Development and launch of effective decentralized applications will help in the development of the entire PoS community, and therefore one of the key aspects will be the availability of code on GitHub, where anyone can offer their modifications and upgrades. Moreover, by supporting independent developers and their projects, the entire P2P Validator ecosystem will reach a new level of productivity.