1. Approach to Alleviate Wealth Compounding in Proof-of-Stake Cryptocurrencies
- Author
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Naderi, Zahra, Shariatpanahi, Seyed Pooya, and Bahrak, Behnam
- Subjects
FOS: Computer and information sciences ,Computer Science - Computer Science and Game Theory ,Information Theory (cs.IT) ,Computer Science - Information Theory ,Computer Science and Game Theory (cs.GT) - Abstract
Due to its minimal energy requirement the PoS consensus protocol has become an attractive alternative to PoW in modern cryptocurrencies. In this protocol the chance of being selected as a block proposer in each round is proportional to the current stake of any node. Thus, nodes with higher stakes will achieve more block rewards, resulting in the so-called rich-getting-richer problem. In this paper, we introduce a new block reward mechanism called the FRD (Fair Reward Distribution) mechanism, in which for each block produced, in addition to a major reward given to the block proposer, a small reward is given to all other nodes. We prove that this reward mechanism makes the PoS protocol fairer in terms of concentration of wealth by developing on the Bagchi-Pal urn model., 7 pages, 10 figures
- Published
- 2022