Security and Governance
In order for any decentralized blockchain, such as Lisk, to be secure, its participants must agree to the same set rules. Those rules are governed by a consensus mechanism. While there are many types of consensus mechanisms, Lisk utilizes Proof of Stake (PoS).
PoS Consensus Mechanism - What is it?
As with other consensus algorithms, the goal of PoS is to secure a blockchain. Unlike Proof of Work (PoW), it is energy efficient and environmentally friendly. It also has additional security considerations and tradeoffs.
Lisk's PoS utilizes advantageous voting and delegation mechanisms to make it more democratic in nature when compared to others. This also results in higher scalability as transactions can be verified and processed much faster.
PoS Consensus for Lisk
Staking is the core component for determining which delegates secure the network. For a much more in depth explanation of how these stakes are calculated, and how users may stake for validators themselves, see the Lisk Staking Process blog post.
Block rewards were introduced for active delegates securing the network shortly after the Lisk Mainnet launch in 2016. While the rewards started at 5 LSK tokens per block, they were gradually reduced by 1 LSK token at a time. New, with https://github.com/LiskHQ/lips/blob/main/proposals/lip-0071.md, block rewards are calculated on the stake of the validator.
101 active delegates secure the Lisk Network by processing blocks and transactions. These 101 active delegates are the top 101 of all Lisk validators, sorted by stake weight. Each active validator will have a turn minting a new block before the process starts all over again.
In addition, stand-by validators, ones that are outside of the top 101 by stake weight, also have an opportunity to mint blocks. During each block round, 2 validators are randomly selected to mint a block as well. Validators have a greater chance of being selected with more stake weight.