An open question for all POA validators

Hi everyone,
Considering that the overall “Crypto” community’s fundamental core values are of decentralization and cross-border (global), permission-less access to this emerging technology and associated economy,

in the possibility of a transition from Proof of Authority (POADAO), to a Proof of Stake (POSDAO) consensus, for the benefit of all the stakeholders,

would you, as POA validator, vote in favor of such transition?

Thank you,
a community member.

Hi @nrgskill,

What value do you see in having POA run on top of PoS over PoA? Would love to see data behind the argument - e.g. examples of PoS networks that actually grew their compelling value switching to PoS.

POA today is positioned as one of the most efficient ETH sidechains (orders of magnitudes cheaper and faster), capable of running anything ETH can, while arguably having higher security than ETH. It’s the public version of what many mature enterprises are now experimenting with for their internal immutable consensus needs. How does that improve if the network switches to anonymous parties securing consensus and what makes it different from the other PoS networks?

Best, MM


Hi Micwebnet
The rapid adoption of xDAI chain (POSDAO) from multiple projects is the evidence that many stakeholders decide to avoid the inherent regulatory risks of POA network.
Specifically, because all validators are United States notaries, US regulators can impose sanctions and legal actions against POA Network, including its development team and validators.
As a result, regulators such as the SEC (or other regulatory bodies in the US) can interfere heavily on the future development of POA Network’s ecosystem. This is also aggravated by the fact that POA Network has been funded via a token sale in 2017, which increases the regulatory uncertainty over the project.

In other words, POADAO compared to POSDAO has a single point of failure in the regulatory risk.

Best regards,

Hi @nrgskill,

POA and XDAI are both developed by the same POA Network team. They are globally distributed with members from all over the world. One could argue that having US notaries secure a public blockchain network with proof of autonomy is far more secure than having anonymous entities secure it with proof of stake. The network attack is far less likely imo with known and regulated validators than it is with anonymous unregulated validators. Taking over consensus and thus security of a PoS network is a matter of buying power. POA network doesn’t suffer from this problem, which makes it uniquely positioned as one of the most secure public blockchains running on OpenEthereum. This enables POA to host such high value smart contracts as POAMania.

For fast value transfers (ledger) XDAI DPOSDAO model is a good fit and builds on the governance foundation used in POA, offering efficiency of a sidechain for stable token (DAI). For long-term security of smart contracts (compute state) POA model seems like a much more secure model.

When we improve systems we think of the scenarios improvements would bring and apply the right tools for the job. With POA staking is offered via POA Mania. With XDAI staking is offered via DPOS. So you can stake in either network. In both cases validators also secure the network and depending on your use cases one or both of the networks could be applicable (e.g. value transfer on XDAI sidechain, smart contracts on POA sidechain, both bridged to ETH mainnet). Need to do a lot of value transfers? Bridge from mainnet to XDAI. Need to run a lot of smart contracts? Bridge from mainnet to POA.

Keep in mind that many enterprises won’t touch public PoS/PoW blockchains - they do however rely on private PoA blockchains for consensus. That’s the model that POA offers to the public and afaik it’s unique in this regard in the Ethereum ecosystem.

Best, MM

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