Our Delegated Proof-of-Reputation Consensus Algorithm and the solution for the centralization problem many Blockchains are running into
In the Blockchain world, EOS is known as one of the pioneering blockchain solutions for the problem of scalability. With the Delegated Proof-of-Stake consensus algorithm allowing for 21 block producers to produce blocks, the EOS network has reached nearly 2,000 TPS (Transactions per second). As written in the whitepaper, the network’s ultimate target is to reach 10,000–1,000,000 TPS in the long run.
However, on account of the small number and the unchangeableness of Block Producers, EOS has come up with rumors that the system is manipulated by sharks and whales. Eventually, rumors have come true when the Huobi scandal, where the exchange is alleged to be involved in EOS voting manipulation, was out. It seems like not only did Huobi buy votes from small token holders by issuing HPT token, the exchange also colluded with 20 other Block Producers to vote for each other.
At Umbala Network, we have developed a new consensus algorithm that can effectively solve the problem of centralization that the EOS network is running into.
The consensus algorithm named 108 Delegated Proof-of-Reputation (108 DPoR). Voting procedure is implemented on the basis of accounts’ score, which represent their reputation in the system, instead of the number of tokens accounts stake into the system.
Basically, we can call the solution from Umbala Network Blockchain and 108 DPoR is to ‘find the equilibrium between decentralization and scalability’. To learn more about the108 DPoR, please stop by Umbala Network’s official website umbala.network.
What’s new about Umbala Network Blockchain?
To confront with the centralization problem where power in the system belongs to a small group of people, 108 DPoR is designed with two highlights: the Reputation Scoring System and the Reputation Voting structure. Block producers are selected through a Reputation Voting procedure conducted on the basis of reputation score which each account receives in the Reputation Scoring System.
Reputation Scoring System
Umbala Network Blockchain (now let’s call that ‘UN Blockchain’) has proposed a Reputation Scoring System for all accounts. All wallet addresses in UN Blockchain are scored and the scores will be updated constantly as the way of measuring their reputation in the system.
Reputation Scores of all accounts are re-calculated every 270 seconds with the inputs measured averagely in the recent 30 days. The Reputation Score formula is composed of three variables:
Reputation Score = f (Power Score, Token Traffic Flow, Evaluation on The Usage of Allocated Resources)
Here is a deep-dive on all three variables:
1.Power Score: Assume that an account has at least 1 million tokens being staked into the system. The Power Score calculating mechanism is as following:
On the first day, 10% of the number of staked tokens will be converted to Power Score. For every subsequent day , 10% of the number of staked tokens that have not been converted to Power Score will be converted into Power Score and added to the cumulative Power Score.
For instance, an account U ******************* in UN Blockchain stakes 1,000,000 tokens into the system. On the first day of calculating process, Power Score of such account is 1,000,000 * 10% = 100,000. The amount of tokens that have not been converted to Power Score is 1,000,000–100,000 = 900,000.
On the second day, the Power Score is 900,000 * 10% = 90,000 and added into the Power Score the account got yesterday (which is 100,000). Now the cumulative Power Score is 100,000 + 90,000 = 190,000. The amount of tokens that have not yet been converted to Power Score is 900,000–90,000 = 810,000.
It can be seen that the cumulative Power Score of the account is described as the following sequence:
The Power Score will increase gradually and reach 1,000,000 if the number of staked tokens remains unchanged and the staking time is long enough. It can be deemed as a challenge for the account to demonstrate its level of contributing to the system’s stability. As long as the contribute time is long enough, the number of staked tokens will be converted totally to Power Score, meaning the account gets the maximum possible Power Score.
As for accounts have less than 1 million token staked, their Power Scores are all zero. Notice that the larger the Power Score is, the higher the Reputation Score an account can get.
2. Token Traffic Flow: The principle used to create this variable is that score of an account has ‘positive’ token flows (traffic volume of inflow tokens is greater than traffic volume of outflow tokens) is greater than that of an account has ‘negative’ token flows (traffic volume of inflow tokens is less than traffic volume of outflow tokens).
Why can it be deemed that? Because it can be implied easily that the account which has ‘positive’ token flow is the one getting to receive many tokens from other accounts in the system, meaning that its reputation in the system is high when compared to others. Unlike normal accounts whose sending and receiving tokens is the only activities in the system, this account is possibly running a real business on UN Blockchain.
Notice that the larger the Token Traffic Flow is, the higher the Reputation Score an account can get.
3. Evaluation on The Usage of Allocated Resources Staking tokens into the system, an account will be given a specific amount of system resources (‘Allocated Resources’). These resources include RAM, Net Bandwith and CPU. The larger the number of staked token is, the richer system resources an account can be allocated.
The relationship between the score for ‘Evaluation on The Usage of Allocated Resources’ and the actual usage of allocated resources of an account is described as the following curve:
For any accounts, utilizing 70–90% of the allocated resources is considered to be ideal. At this level, accounts cannot just prove that they are active folks in the system but ensured that they always have available backup resources can be used when needed as well. This proper usage also helps the system to be able to have backup resources can be used in emergencies, for example, the system is congested by the dramatic increase in the number of transactions.
Utilizing less than 70% of the allocated resources, accounts are not considered to be active participants in the system. Utilizing more than 90% of the allocated resources, the account is exhausting their given resources and utilizing up close to or more than 100% of the allocated resources, the account is wasting resources of the whole system.
The larger the score of ‘Evaluation on The Usage of Allocated Resources’ is, the higher the Reputation Score an account can get. Notice that among the three variables, the variable being mentioned has the strongest influence on the Reputation Score of an account.
Why do we choose ‘reputation’ instead of ‘wealth’?
The heart and soul in our solution for the centralization problem is nothing but the Reputation Scoring System. UN Blockchain evaluates participants in the system under their reputation, not how wealthy they are. In the most cases, accounts have high Reputation Score in UN Blockchain are decentralized applications — the ones who operate actively in the system.
It is not the rich, but the accounts operating actively in the system are the most significant characters in Blockchain movie. They can be decentralized applications or decentralized business models built on top of and based on Blockchain. They create real value and enrich UN Blockchain’s ecosystem, thereby helping to bring Blockchain closer to the real life.
The mentioned scoring mechanism is also designed to make decentralized applications to be superior in terms of Reputation Score:
- Applications operating healthily and effectively will receive a large number of tokens transferred from other accounts. This state will also be maintained for a long time, making the ‘Power Score’ of applications higher.
- Applications operating healthily and effectively are the ones providing services in the system and attracting many users. This can mean that they receive many token deposited from users, meaning their scores of ‘Token Traffic Flow’ are always positive and even tended to grow.
- Applications operating healthily and effectively normally reach the efficient usage of allocated resources, making their scores of ‘Evaluation on The Usage of Allocated Resources’ higher.
Reputation Voting
UN Blockchain proposed a new mechanism of voting named Reputation Voting to replace the Stake Voting. From this point on in the article, we will use the terms ‘account’ instead of ‘token holders’ as written in many papers on current DPoS consensus algorithms.
Only accounts have positive Reputation Score can participate in the Reputation Voting. It is for the quality of the voting because these accounts are most concerned about Blockchain’s operations (as it will affect their own operations), thereby having the real motivation to vote out.
Like Stake Voting, accounts use their votes to select out the Block Producers in Reputation Voting. However, votes’ strength is determined by the Reputation Score, not by the number of staked tokens.
In other words, if in Stake Voting the ‘rich guys’ can manipulate the vote results, then in Reputation Voting only those with high reputation— accounts that actively contribute to the system and create real value in the business ecosystem —are the ones, if desired, can influence the system.
108 Delegated Proof-of-Reputation consensus algorithm
The 108 DPoR consensus algorithm operates as following steps:
Step 1: Accounts vote out to the list of Block Producers (BPs) in a Reputation Voting round
Step 2: Select 108 BPs who are most voted from the list of BPs
Step 3: Select Top 45 Active Block Producers (Top 45 ABPs) from 108 BPs
41 ABPs in the Top 45 ABPs are ones who are most voted in 108 ABPs. The rest 4 ABPs are randomly selected from 67 ABPs who do not make it in the top 41 ABPs.
Step 4. Top 45 ABPS in turn produce blocks, 3 blocks per each and 1 block to be produced in exactly 1 second
Step 5. After an epoch of 135 seconds, accounts’ vote are updated, leading to the possible change in the list of BPs in Step 1. After that, step 2, 3 and 4 are implemented as the way described above
Step 6. After 2 epochs of 270 seconds, Reputation Score of all accounts are updated, leading to the possible change in the list of accounts eligible to participate in Reputation Voting in Step 1. After that, step 2, 3, 4 and 5 are implemented as the way described above
How is the centralization problem solved?
With UN Blockchain and 108 DPoR, the centralization problem of EOS Blockchain is solved by two following points:
The list of Block Producers is updated in the matter of minutes
With the recent Huobi-EOS scandal, it is possible to witness the ‘game’ between the 21 unchangeable Block Producers in EOS Blockchain.
21 Block Producers — 21 of the biggest token stakers can easily collude with each other. The situation is still unchanged as the rich ones continue to vote for themselves and anyone who want to change the game but have a tiny amount of token staked almost cannot do anything.
In contrast, the voting mechanism in 108 DPoR makes the list of Top 45 ABPs can’t help but to be changed after every epoch.
First of all, in Step 5, after 135 seconds, the votes of accounts participating in Reputation Voting in Step 1 are updated, leading to a change in the list of BPs. From here, the ABPs selected in Step 2 may change, leading to a change in the Top 45 ABPs in Step 3.
Even in the case that the votes of accounts remain the same, resulting in the list of BPs and 108 ABPs remain unchanged, Top 45 ABPs are still subject to change. Remember that the 4 ABPs in this group are randomly selected from the rest 67 ABPs. This pure randomization can make the constant change in the list of this 4 randomly selected ABPs.
In Step 6, even accounts participating in the Reputation Voting in Step 1 can be changed as their Reputation Scores are updated after every 270 seconds. Let’s take it in this way: the eligibility of voters in the election is ‘checked’ to satisfy the unchanged condition that only legitimate voters have the right to vote out the President. At the end, the change in the list of accounts can lead to the major change in the selected groups in the following steps (the list of BPs, 108 ABPs and finally Top 45 ABPs).
Those who are selected from Reputation Voting deserve to control the system
As a matter of facts, in every hierarchy (Blockchain consensus algorithm system, political system …), the problem of advocacy group is inevitable and hard to be fully resolved.
The situation can also happen particularly with UN Blockchain. In Step 1, a group of accounts who have the highest Reputation Score can vote for themselves, easily making them to be in the list of BPs, the 108 ABPs, and finally the Top 45 ABPs.
After an epoch, there is an possibility, though small, that the list of accounts participating in Reputation Voting and their votes in Step 1 remain unchanged, leading to Top 45 ABPs can also remain unchanged.
However, this is not a big problem for UN Blockchain. As discussed, accounts have high Reputation Score are decentralized applications or business models built on Blockchain. How Blockchain operates, in specific, how Blocks are produced or how transactions are confirmed, will affect their operations.
They represent the value of the entire ecosystem of applications, thereby deserving to be empowered to control the system. For applications operating on UN Blockchain, serving the system on behalf of their benefits and on behalf of the benefits of all ecosystem are undoubtedly two equivalent things.
‘ The politics of decentralization are a farce at best’, so it is best to have a voting mechanism that the real value makers of Blockchain can manipulate.
Meltem Demirors, Chief Strategy Officer at Coinshares, once wrote ‘The politics of decentralization are a farce at best’. However, we all understand that ‘The politics of decentralization’, with social-hierarchy-like consensus algorithms, is one of the pioneering and most important ways that can make Blockchain faster. For this reason, the option that UN Blockchain has chosen is to create a voting mechanism where real value makers of Blockchain can manipulate.
FOLLOW US TO LEARN MORE ABOUT UMBALA NETWOR:
* Landing Page: http://umbala.network
* One Pager: http://bit.ly/umbalanetwork-onepager
* Pitch Deck: http://bit.ly/umbalanetwork-deck
* Whitepaper: http://bit.ly/umbalanetwork-whitepaper
* Whitelist: http://bit.ly/umbwhitelist
* UMB | Umbala Network Vietnam Community: https://t.me/UmbalaNetworkVietnam
* UMB | Umbala Network Vietnam Announcements: https://t.me/UmbalaNetworkVietnamAnn
* UMB | Umbala Network Global Community: https://t.me/UmbalaNetwork
* UMB | Umbala Network Global Announcements: https://t.me/UmbalaNetworkAnn
* Facebook Fanpage: http://fb.com/UmbalaNetwork
* FB Vietnam Group: https://fb.com/groups/umbalanetworkvietnam/
* FB Global Group: https://fb.com/groups/umbalanetwork/
* Twitter: https://twitter.com/UmbalaNetwork
* Linkedin: https://www.linkedin.com/company/umbalanetwork/
