Scaling Blockchains: Can Elected Committees Help?
49 Pages Posted: 1 Sep 2021 Last revised: 6 Dec 2021
Date Written: October 7, 2021
In the high-stakes race to develop more scalable blockchains, some platforms (Cosmos, EOS, TRON, etc.) have adopted committee-based consensus protocols, whereby the blockchain's record-keeping rights are entrusted to a committee of elected block producers. In theory, the smaller the committee, the faster the blockchain can reach consensus and the more it can scale. What's less clear, is whether this mechanism ensures that honest committees can be consistently elected, given voters typically have limited information. Using EOS' Delegated Proof of Stake (DPoS) protocol as a backdrop, we show that identifying the optimal voting strategy is complex and practically out of reach. We empirically characterize some simpler (suboptimal) voting strategies that token holders resort to in practice and show that these nonetheless converge to optimality, exponentially quickly. This yields efficiency gains over other PoS protocols that rely on randomized block producer selection. Our results suggest that (elected) committee-based consensus, as implemented in DPoS, can be robust and efficient, despite its complexity.
Keywords: Approval Voting, Blockchain Consensus Protocols, Blockchain Economics, Token Voting, Committee-Based Consensus, Delegated Proof of Stake, DPoS, Stake-Weighted Voting
JEL Classification: G14, D82, C11, O32, O14
Suggested Citation: Suggested Citation