Glossary
The Nominated PoS. A Proof-of-Stake system where nominators back validators with their own stake as a show of faith in the good behavior of the validator. Nominated Proof-of-Stake differs from the more generic concept Delegated Proof-of-Stake in that nominators are subject to loss of stake if they nominate a bad validator; delegators are not subject to loss of stake based on the behavior of the validator. Note that some other blockchain technologies may use the term Delegated Proof-of-Stake, even if delegators can be slashed. Polkadot uses the Phragmén method to allocate stake to nominees.
The Delegated Proof of Stake (DPoS) consensus algorithm was developed by Daniel Larimer, in 2014. Bitshares, Steem, Ark, and Lisk are some of the cryptocurrency projects that make use of DPoS consensus algorithm. A DPoS-based blockchain counts with a voting system where stakeholders outsource their work to a third-party. In other words, they are able to vote for a few delegates that will secure the network on their behalf. The delegates may also be referred to as witnesses and they are responsible for achieving consensus during the generation and validation of new blocks. The voting power is proportional to the number of coins each user holds. The voting system varies from project to project, but in general, each delegate presents an individual proposal when asking for votes. Usually, the rewards collected by the delegates are proportionally shared with their respective electors.
Therefore, the DPoS algorithm creates a voting system that is directly dependent on the delegates’ reputation. If an elected node misbehaves or does not work efficiently, it will be quickly expelled and replaced by another one.
Parachain Lease Offering. Polkadot is a blockchain network that scales by spreading transactions across multiple parallel blockchain shards called parachains. Parachains are specialized shards of Polkadot that give projects and their communities agency over their respective goals. Parachain slots are limited, and will be auctioned off in unpermissioned candle auctions. Rather than auction many parachain slots together, it's more likely (though not yet confirmed) that they will be auctioned off one-by-one, so that there’s only a single parachain auction occuring at any given time.
Decentralized Finance. DeFi is an umbrella term for a variety of applications and projects in the public blockchain space geared toward disrupting the traditional finance world. Inspired by blockchain technology, DeFi is referred to as financial applications built on blockchain technologies, typically using smart contracts. Smart contracts are automated enforceable agreements that do not need intermediaries to execute and can be accessed by anyone with an internet connection. DeFi consists of applications and peer-to-peer protocols developed on decentralized blockchain networks that require no access rights for easy lending, borrowing, or trading of financial tools. Most DeFi applications today are built using the Ethereum network, but many alternative public networks are emerging that deliver superior speed, scalability, security, and lower costs.
Decentralized Exchanges. DEX are a type of cryptocurrency exchange which allows for direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary.
Decentralized Applications. A decentralized application (DApp, Dapp) is a computer application that runs on a distributed computing system.DApps have been popularized by distributed ledger technologies (DLT) such as the Ethereum Blockchain, where DApps are often referred to as smart contracts.
Last modified 1yr ago