EgonCoin Consensus

Consensus refers to the agreement process between nodes in a network. The nodes must agree on which transactions to include in the next block on the chain before these transactions are committed.

There are 2 aspects to the process - the actual consensus mechanism to add transactions to blocks, and Sybil protection and validator incentives.

Sybil protection and incentives via delegated proof of stake

EgonCoin uses a form of delegated Proof of Stake (dPoS) to provide Sybil protection and align the validator incentives.

In order to participate in securing the network consensus, a node operator must stake a minimum required amount of EGON coin (currently set at 50,000 EGON). Becoming a validator on EgonCoin is permission-less, meaning that a node operator just needs to satisfy certain technical requirements. The need to stake EGON ensures that an entity cannot create multiple seemingly distinct validators without incurring a significant cost. Hence, the Sybil protection. Currently, the maximum number of Active validators on EgonCoin is 51.

The validator who publishes a block agreed upon during a given consensus round is rewarded by the network transaction fees like seen on other DPoS chains, while EgonCoin development team added a secondary reward mechanism for active nodes through a stake contract which all validators earn from turn by turn. Over time, validators can expect to publish a share of blocks equal to their share of the overall stake.

One major difference with EgonCoin EPoS with other DPoS is that there is no additional block reward. This also means there is no delegation role, instead holders can make use of the Elevated stake contract to stake and get rewarded over time. About 20% of the total supply is allocated into this Elevated staking contract for both validators and holders alike to stake and earn more EGON over time.

Validators who violate the consensus rules (by, for instance, not revealing random numbers) can expect their Elevated stake to be revoked. This provides a strong incentive for validators to behave in the desired manner.