A Minimal Agency Scheme for Proof-of-Stake Consensus

We present a Proof-of-Stake (PoS) consensus scheme for a decentralised ledger that is designed to achieve strict transaction ordering, rapid confirmation times and greater security than existing technologies. The protocol uses a cryptographic random beacon for electing a committee of nodes that are tasked with reaching an agreement on a candidate transaction set. This is achieved by the committee members appending lists of proposed transactions as vertices of a Directed Acyclic Graph (DAG). The DAG is closed by a member of the committee, elected as leader, who proposes a set of tip vertices that serves as a compact representation of the candidate transaction set. After this transaction set is notarised, the next block to be appended to the blockchain is constructed by executing a function that performs a deterministic mapping from the partially ordered transactions stored on the DAG to a block with a strict ordering. The protocol incorporates a deterministic notion of finality to provide fast confirmation times and guard against well known avenues of attack on Proof-of-Stake consensus schemes. The protocol is designed with a minimal agency principle to restrict the control that any individual participant has on the changes of state that are applied to the ledger. The random beacon, collaborative block production, deterministic mapping and other elements of mechanism design restrict the agency of individual nodes, and thereby enhance the ledger’s security.