Proof of Stake Security

The Netdex chain leverages LPoS, which is a leaderless PoS protocol, in favor of DPoS, that is, Delegated Proof of Stake. It has no leader selection or voting process and no concept of “master nodes”. The LPoS requires 2/3rd validator participation: meaning that a malicious actor would have to successfully deny more than 1/3rd of participants to successfully mount an attack.

In DPoS, a fixed number of elected nodes, the delegates, are selected to create blocks. The delegates are voted for by token holders, whose voting power directly depends on the number of tokens they own. The issue is that the silver spoon effect creeps into such a system as tokens and, therefore, voting power spreads unevenly.

So, while DPoS does well in terms of transaction throughput, it does not guarantee decentralization.

The LPoS protocol does not have any delegates. Instead, validators lock tokens as a "stake" to be allowed to generate blocks.

Restrictions are enforced within the Netdex chain ecosystem to ensure that validators do not behave maliciously. That is, they have to accept meaningful levels of risks (along with their delegators). These restrictions include enforcing an upper ratio of the validator’s stake to the delegator’s stake. The upper threshold is set at 1:10, i.e., for every 1 token staked by a validator, the upper limit of its delegator pool is a 10 token stake.