Delegated Proof of Contribution

Ricky Dodds
Feb 12, 2019 · 5 min read

Unpacked Part II: Increasing Community Engagement Drives Value

DPoC is a modified version of delegated proof of stake, a scaling and governance alternative utilized by a number of smart contract platforms (e.g. EOS and Tron), built with enterprise adoption in mind, that seeks to reward engagement in the network. DPoC is designed to provide: 1) a clear governance structure, 2) better throughput, 3) more efficiency and 4) less centralization than some other DPoS and PoW mechanisms.

In a later post, I’ll explore ICON’s technical capabilities vs. other layer 1 consensus protocols; how we stack up and where we can improve.

That said, in this post, I’ll provide a brief refresher on DPoS, breakdown DPoC into its components and highlight its similarities to DPoS. Lastly, I’ll discuss why I believe ICON’s model will work.

Delegated Proof of Stake refresher

In traditional proof of stake systems, members stake their tokens, and thereby gain the ability to confirm transactions, create blocks and receive rewards for their efforts. In delegated proof of stake, community members stake their tokens to other members who will perform these same functions on behalf of the group. In most cases, this staking/voting is weighted proportionally to the stake in which one owns. For example, if you own five tokens, you’ll have five votes. Comparably, if you own 500 tokens, you’ll have 500 votes. In EOS, however, 1 EOS = 30 votes. In general, those who collect the most votes from their respective community members will earn the right to manage the network.

How is DPoC different

First, let’s start with the similarities. Fundamentally, delegated proof of contribution is quite similar to DPoS in that a community member (an ICONist) will stake his/her tokens to a candidate that will manage the network on behalf of others. In ICON’s design, the top 22 vote receivers will be elected as P-Reps. A P-Rep is tasked with validating and confirming transactions, maintaining the network and implementing upgrades. For this effort, P-Reps will receive a portion of the block rewards via I_Score (which can be converted to ICX through the public treasury). Additionally, P-Reps will be responsible for managing the economic policy of the network (i.e. new block reward distributions). We discuss this in more detail below.

New block rewards

Block rewards will be generated after the acceptance of each block and are then sent to the public treasury. For each new block reward, all ICONists who participate in the network as a delegator or as a receiver of delegation will receive an amount of I_score reflective of their respective contribution. This I_score is redeemable for ICX at any time.

Where ICON’s model is unique is in the ability for an ICONist to receive staking rewards not only for being a P-Rep or delegating to a P-Rep, but also for voting for DApps and EEPs and/or running a DApp or EEP. In short, this provides an opportunity for all ICONists to contribute; no matter how technically inclined you may or may not be. In other DPoS systems, staking rewards are typically only received for voting in block producers. DPoC is the first to implement a model which will benefit not only the elected P-Reps, but also those that contribute to the network in other ways.

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Sample rewards for an ICONist staking to Reps, EEPs and DApps
  • As a point of reference, there is no economic incentive for voting for an EOS BP. The only benefit is governance. As of now, ~25% of EOS community members have voted, and 47% of EOS outstanding is staked. For Tron, the amount voted for super representatives is even smaller at ~7% based on total supply. However, the 27 Super Representative Nodes with the most votes create new blocks and share the rewards with their voters. Based on estimates, this annual return is close to ~5%.

DApps and EEPs will receive rewards reflective of the delegation they receive. This is an essential difference vs. any other platform. Instead of the foundation providing grants to whomever they see fit (e.g. how it currently works at Ethereum), the community itself will be able to decide who receives the grants (in the form of block rewards) by delegating their respective ICX to projects or improvement proposals they feel best improve the network.

Why ICON’s model will work

As ICONists, incentives for participating in the network will be defined by P-Reps. As noted above, DPoC is designed to provide a few incentive structures. The first is to be engaged. Rewards for this engagement will come in the form of block rewards from staking to 1) P-Reps, 2) DApps and 3) EEPs. Similar to other delegated proof of stake systems, ICONists will receive rewards proportional to one’s respective holdings based on pre-determined yields for delegating to 1) P-Reps, 2) DApps and 3) EEPs respectively.

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Illustrative example of staking to Reps, EEPs and DApps

The second form of incentive is to be working as either a P-Rep, a DApp or as an EEP. A key difference in ICON’s proposal relative to other platforms is the economic incentives provided to DApps and Economic Expansion Proposals (“EEPs”).

DApps will receive rewards based on 1) delegation by ICONists and the 2) ability to achieve certain DAU and/or Tx level thresholds (to be determined). Currently, ICON is building out its virtual step capabilities to limit friction from the user standpoint. Once implemented, DApps will be able to stake ICX in order to generate virtual step which will be able to be used to cover ICX transaction fees associated with DApp usage.

As discussed in a previous post, these rewards can be meaningful especially when compared to traditional business models. Recall, even a modest delegation of 5% of the network could amount to $20,000 in USD monthly (under previously stated conditions).

Another exciting adaptation in the DPoC framework is the concept of EEPs. ICONists can propose an EEP, receive delegation from peers and receive funding for their respective initiatives via block rewards. EEPs can be wide-ranging in purpose and reach. At one end of the spectrum, one could envision a group of developers looking to improve ICON’s core code to run as an EEP, providing monthly updates on their respective progress and receiving funding in turn. Note, this is similar to Zcash, where the core developers/foundation receive 20% of all block rewards to further development. On the other end of the spectrum, an EEP could be as simple as a community manager looking for funding to host a local meetup on a specific date.


As discussed above, DPoC is designed to encourage all ICONists to find a way to contribute to the ecosystem and be rewarded for their respective efforts. Given this, we anticipate a high engagement rate throughout the P-Rep campaign process and an oversubscribed list of P-Rep candidates ahead of the on-chain voting in September. As you can see, this is an exciting time to be apart of the ICON community. We hope you will continue to look for ways to broaden ICON’s reach and look forward to partnering with you along the journey.

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