POSDAO questions

#1

I really like the idea of the POSDAO. We have a few questions:

  • What does the 70/30% split means? How is a validator selected to which group, and what do they get?

  • What are the slashing conditions or loss options for the validators, so that staking becomes a risk?

  • Can the block reward be the native cryptocurrency? From the chart it doesn’t look like, same for the transaction fees, Those should be spread between the validators.

Those are only quick question coming from reading the summary, not the paper itself.

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#2

What does the 70/30% split means?

The split is between delegators and validators: The reward portion for each validator node is split between the validator themselves and their delegators proportional to their stakes, with the exception that the validator always receives at least 30%. (See chapter 3, and specifically section 3.2, for details.)

What are the slashing conditions or loss options for the validators, so that staking becomes a risk?

Detected misbehavior results in the validator node being banned (no further rewards) and their stakes being frozen for 90 days (that period is configurable).
Misbehavior can be detected on the smart contract level (e.g. not revealing randomness input) or in the consensus layer, e.g. sending an invalid message. Details depend on the implementation, i.e. Aura vs. hbbft (see chapter 7).

Can the block reward be the native cryptocurrency?

The block reward can be native or ERC20, yes.

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#3

Thanks to the flexibility of BlockReward contract in Parity-Ethereum we can define different strategies for rewards. For the reference implementation of the xDai DPOS, the native token will be mintable only with locking of corresponding Dai on Ethereum mainnet. The supply of xDai will be one to one to locked Dai.

The protocol will mint DPOS token for the delegators and stakers on a form of ERC20 tokens.

#4

the locking of Dai works here through the bridge, right? So the security is on the bridge side? Or can the BlockReward contract verify the existence of Dai on the mainnet smart contracts? This could be possible using zero knowledge proofs.

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#5

The DAI<->xDai bridge locks DAI tokens on Mainnet side and mints the same amount of native coins on the xDai side through the BlockReward contract.

In an opposite case (when the funds go from xDai to DAI), the funds are burnt by the bridge on xDai side and the corresponding DAIs are unlocked on Mainnet side.

So yes, the security is mostly on the bridge side.

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