This article was first published on Wanchain - Medium
Economic Incentive Mechanism
In our previous article, we introduced Galaxy Consensus’s delegation mechanism. The delegation mechanism was designed with several fundamental goals in mind: to allow even small stake holders the chance to participate in consensus, and also to ensure that high performing non-malicious nodes represent the majority of stake in the system. As we all know, a blockchain system is essentially an ecosystem comprised of a network of nodes, and the goal of a consensus protocol is to ensure the normal operation and development of that ecosystem. What, then, is the driving force which ensures the proper functioning of this ecosystem? In short, economic incentives. This article takes a close look at the design principles, consideration, and functioning of Wanchain’s Galaxy Consensus incentive mechanism.
1. The significance of economic incentives
Economic incentives are one of the core elements of Galaxy Consensus. A rational economic incentive mechanism is the fundamental force which suppresses malicious behavior and ensures that consensus nodes operate honestly.
In a narrow sense, the economic incentive mechanism is a basic guarantee for maintaining node operation, ensuring the chain’s safety and liveness.
We know that for blockchain systems, consensus nodes are responsible for packaging transactions, generating blocks, and shouldering the heavy responsibility of chain development. The active and honest participation of consensus nodes is key to ensuring chain safety and liveness. In our consensus design, we have payed close attention to a variety of technical elements, such as leader selection and random number production, which we have explored in earlier articles of this series. The core purpose of each of these designs is to establish a healthy and efficient consensus system. However, after ...
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