PoA vs PoS

Learn the differences between Proof of Authority and Proof of Stake Validator Manager contracts.

Overview

At a high level, the ValidatorManager abstract can be used to manage the validator set on the P-Chain.

Proof of Authority networks are secured by validators who can be added or removed from the PoAValidatorManager implementation by an owner address.
Proof of Stake networks are secured by validators who stake some type of tokens for a duration into an implementation of PoSValidatorManager.

Once the transaction confirms, the ValidatorManager (which both PoAValidatorManager and PoSValidatorManager inherit) emits a warp message.

The warp message is signed off by quorum of the current validator set and submitted to the P-Chain.

The P-Chain then adds, removes or modifies the validator in the registry using information from the warp message.

Proof of Authority

There is one implementation of Proof of Authority based on the ValidatorManager abstract called PoAValidatorManager.

In the PoAValidatorManager implementation, the owner of the contract can add and remove validators from the set. The owner can also set the weight of the validator. The owner can either be a smart contract or an EOA.

Rewards

By default, no rewards are distributed to validators in the PoAValidatorManager implementation. However, rewards can be distributed to validators by extending the PoAValidatorManager contract and adding the desired functionality.

Parameters

The PoAValidatorManager has a couple of parameters that it can be initialized with to fit the needs of the network. These parameters include:

ChurnPeriodSeconds: The time period in seconds that a validator must wait before being removed from the set.
MaximumChurnPercentage: The maximum percentage of the validator set that can be removed in a single churn period.

Proof of Stake

There are two implmentations offered of Proof of Stake based on the PoSValidatorManager abstract:

NativeTokenStakingManager: This contract is used for staking native tokens.
ERC20TokenStakingManager: This contract is used for staking ERC20 tokens.

These are both permissionless implementations, meaning that anyone can stake tokens and become a validator.

The PoSValidatorManager abstract also comes with a notion of delegation. Delegators can delegate their tokens to a validator. This will increase the validator's weight and the delegator will receive a portion of the rewards.

Rewards

Rewards are calculated using a RewardCalculator contract. The PoSValidatorManager will distribute rewards to the validator based off their node's liveliness in consensus and after the validator is removed from the set.

In the NativeTokenStakingManager implmentation, rewards are minted through use of the NativeMinter precompile. Which the address of NativeTokenStakingManager is enabled on.

In the ERC20TokenStakingManager implementation, rewards are minted through calling the ERC20 token's mint function.

Parameters

The PoSValidatorManager has a number of parameters that it can be initialized with to fit the needs of the network. These parameters include:

MinimumStakeAmount: The minimum amount of tokens required to stake.
MaximumStakeAmount: The maximum amount of tokens required to stake.
MinimumStakeDuration: The minimum duration that tokens must be staked for.
MinimumDelegationFeeBips: The minimum fee charged to delegators for delegating their tokens.
MaximumStakeMultiplier: The maximum multiplier that can be applied to a validator's weight.
WeightToValueFactor: The factor used to convert a validator's weight to a value.
RewardCalculator: The address of the reward calculator contract.

Customization

The ValidatorManager abstract contract is designed to be flexible and can be easily extensible to fit the needs of the network.

For example, the PoSValidatorManager abstract could be extended to include additional parameters or functionality. This can be done by creating a new contract that inherits from the PoSValidatorManager abstract and adding the desired functionality such as NFT staking, slashing, or additional rewards for certain actions.

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