Cosmos Proof-of-Stake: An Introduction
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The document outlines the fundamentals of the Cosmos proof-of-stake system, highlighting key mechanisms like validator requirements, slashing conditions, and incentivization structures. It explains how staking tokens function within the network, the role of validators and delegators, and the distribution of rewards. Additionally, it calls for contributions to improve economic models and contribute to the open-source codebase.
Cosmos Proof-of-Stake: An Introduction
- 1. COSMOS Proof-of-Stake Sunny Aggarwal - Tendermint & Cosmos
- 5. Tendermint BFT • 1 Block Finality • Requires +2/3 of the validator set to sign on a block to commit • Proposer changes every round • Doesn’t scale as # of validators increases
- 7. Why Proof of Stake?
- 8. Basics of Proof of Stake
- 13. Slashing
- 17. Unbonding
- 27. Out of Band Delegation
- 28. Out of Protocol
- 29. Out of Protocol
- 30. Out of Protocol
- 31. Out of Protocol
- 32. Out of Protocol
- 33. Out of Protocol
- 34. Out of Protocol
- 43. Delegation Criteria Delegators will choose validators off of criteria such as: • Validator track record • Validator’s security setup • Self-declared, protocol- enforced minimum self-bond • Commission rate on fees/rewards
- 70. Incentives
- 71. Rewards
- 72. • Atoms are just a staking token for the Cosmos Hub • Staking tokens are similar to ASICs • Capital you need in order to be able to be a validator, and thus earn transaction fees Staking Token
- 73. • Governance can maintains a whitelist of fee tokens • Each validator maintains a local relative weighting of values of the different whitelisted tokens • Validators can choose to order transactions based on this ordering. • Can also require these to be submitted to the chain in order to enforce a global min fee (using the median) Atom: 5 Photon: 3 BTC: 5000 ETH: 0.2 DAI: 1 Multi Fee Tokens
- 74. • Inflation schedule is designed to encourage staking (the lower the percentage of staked atoms, the higher the inflation rate) • Block rewards split amongst all staked validators • Block rewards start off unbonded Block Rewards
- 75. • Majority of collected fees gets split amongst the validators • Proposer gets a special dedicated percentage in order to incentivize them to not produce empty blocks Proposer 5% Split amongst all validators 95% Transaction Fees Proposer Reward
- 76. 𝑃 = 0.01 + 0.02 ∗ 𝑆 + 0.02 (0.9 𝑅 ) 𝑃 = Proposers dedicated percentage 𝑆 = Percentage of stake whose precommits from previous block were included in the proposal 𝑅 = Round number that a proposal was first proposed Proposer Reward
- 77. • Passive Accounting to avoid iterating over the entire set of stakers every block • Transaction Fees and block rewards are added to a pool • Shares in the pool are distributed to validators, who themselves have shares distributed to delegators • Validators can charge commission rate on Distribution
- 78. Punishments
- 88. Liveness Slashing • Validator gets a slight slash and is automatically put in an jail period of 2 days • After a jail period (2 days) the validator can choose to rebond • Unless delegators redelegated or unbonded, they will be delegated to the validator when he gets out of jail • The jail period time gets credited to the unbonding period, for both validator operators and delegators
- 90. Consensus Fault Slashing • The consensus engine tracks and generates evidence for BFT faults • Double signing on a block • Breaking a Tendermint locking condition • Signing a block while you’re in the unbonding period • There can be a delay between the time an infraction occurs and the time that evidence is found
- 91. Consensus Fault Slashing • At time of evidence, the validator is slashed and killed. • A killed validator has all of his delegators unbonded and the validator cannot revive itself • Only the worst slash infraction is tracked • Compromised key can’t be used to slash 100% of a validator’s funds • Prevents evidence DoS attacks
- 101. Further Work
- 102. Help us! • Attack and improve our economic and theoretical models • Properly parameterize constants • Help simulate real world attacks in Game of Stakes • Test and contribute to the open source codebase • Come up with a name for Cosmos Proof of Stake
- 104. Help us! • Attack and improve our economic and theoretical models • Properly parameterize constants • Help simulate real world attacks in Game of Stakes • Test and contribute to the open source codebase • Come up with a name for Cosmos Proof of Stake
- 106. Help us! • Attack and improve our economic and theoretical models • Properly parameterize constants • Help simulate real world attacks in Game of Stakes • Test and contribute to the open source codebase • Come up with a name for Cosmos Proof of Stake
- 108. Help us! • Attack and improve our economic and theoretical models • Properly parameterize constants • Help simulate real world attacks in Game of Stakes • Test and contribute to the open source codebase • Come up with a name for Cosmos Proof of Stake