Konstellation Network (DARC) Outlines Proof of Stake System

As we pivoted our project from a simple DApp with a blockchain back-end to a fully-formed ecosystem for the financial services niche, we trained our research team on blockchain’s classic debate: Proof of Work vs. Proof of Stake.

The Future “Truth Machine” Will Be Based on Proof of Stake

In 2009, the Proof of Work consensus mechanism introduced by Bitcoin brought society to a new level. All of a sudden, in transactions that previously required a trusted, and often highly compensated, intermediary, one was no longer needed. Although we still have not fully realized the potential of this “truth machine,” the limitations of Satoshi Nakomoto’s original design have already manifested themselves in myriad ways. Immense power consumption requirements, limitations to scalability and vulnerability to 51% attacks are the main issues. The only problem is that we only kind of know what the better alternative is, namely the Proof of Stake (PoS) consensus mechanism.

Proof of Stake, for the most part, remains mostly easier said than done. At its base, PoS is simply a way to avoid relying on compute power to determine the state of each block of transactions in a blockchain. Instead, with PoS, the validator of each block is determined by each validator’s amount of stake, or number of tokens held, rather than their cumulative compute power. But even #2 cryptocurrency Ethereum, despite announcing plans to transition their chain from its current Proof of Work design to a PoS one in early 2017, still has not implemented the consensus mechanism that many blockchainers agree is needed before the industry sees the widespread adoption necessary to justify the hype seen in early 2018.

Introducing Konstellation Network’s Unique PoS Consensus Mechanism

The governance system within the Konstellation ecosystem will be based on three classes of nodes. These nodes are called, respectively from lowest to highest token requirements: Moon Nodes, Star Nodes, and Singularity Nodes. Staking requirements are briefly highlighted below and further information will be shared in more comprehensive node documentation at a later date.

The highest node class is the Singularity Nodes. These nodes will be operated by network participants with the most substantial staking requirement of DARC tokens. To operate a Singularity Node will require a minimum of 1,000,000 DARC. As the number of Singularity Nodes within the Konstellation Network ecosystem increases, the threshold of this staking requirement will increase. Operators of these types of nodes within the Konstellation Network will have the ability and responsibility to participate in the technical and economic decisions for the network. Singularity Nodes may also participate as service providers, either by operating a business and/or providing a technology that brings value to our financial services ecosystem. In this manner, Singularity Node operators are able to create a revenue stream from the other participants on the Konstellation Network. All new services, must be approved by the then active Singularity Nodes.

As a means to govern the main chain of the Konstellation Network, the Singularity Nodes will form a council to govern the blockchain. The number of Singularity Nodes will be static for the first year of blockchain operations, but will afterwards be determined based on the governance standards drafted and approved by the council of existing Singularity Nodes active at that time. Singularity Nodes will also act as block validators and collect transaction fees, which creates an additional revenue stream for these node operators. This fee schedule, as well as the distribution schedule for any delegated stakes, will be outlined in further detail within the Konstellation Network node documentation.

Star Nodes have the second highest staking requirement of a minimum of 100,000 DARC. By staking their DARC onto the network, Star Node operators will earn the ability to provide a service and/or technology to the active participants in the Konstellation Network ecosystem. Star Nodes must delegate their stake to a Singularity Node of their choosing in order to be eligible to provide their service and/or technology.

Finally, any participant of the community has the ability to become a Moon Node with a minimum staking amount of 10,000 DARC. Moon Node operators will be required to delegate their DARC stake to a Star Node of their choosing.

This brief overview of the future of staking DARC on the Konstellation Network is provided in conjunction with our view that PoS is a non-negotiable part of blockchain’s future. Further information, including specifications on staking rewards, will be provided within more detailed specifications of the Konstellation Network node documentation.

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