BitSong’s decentralized network is based on a robust system of governance and a Delegated Proof-of-Stake (DPoS) consensus.
In 2014, Daniel Larimer developed the Delegated Proof of Stake (DPoS) mechanism as a variation on the Proof-of-Stake consensus. DPoS has since been adopted and adapted by several networks, including BitSong.
BitSong DPoS allows users to commit their balances as votes, which are used to elect a fixed number of delegates to validate incoming transactions on the blockchain. As such, validators manage blockchain operations on behalf of their delegators, guaranteeing security and consensus.
The DPoS model tends to reduce latency and increase the performance of a network, meaning it can process more transactions per second. This is mainly due to the fact that it allows consensus to be reached with a lower number of validating nodes. Currently, there are 64 validators on the BitSong mainnet.
Changes to the BitSong network and its rules are subject to governance votes. Examples of decisions that may be put to a governance vote include mainnet upgrades, changes to voting periods, changes to the size of the validator set, or allocation of Community Pool funds.
The BitSong Network relies on a set of validators that are responsible for committing new blocks in the blockchain. These validators participate in the consensus protocol by broadcasting votes which contain cryptographic signatures signed by each validator's private key.
Validator candidates can bond their own BTSG and have BTSG delegated or staked to them by BTSG token holders.
The BitSong Network currently has slots for 64 validators, but over time this will increase to 100 validators, subject to a governance vote. Validators are selected according to the total amount of bonded BTSG – whether the BTSG is staked from the validators own wallet, or delegated to them by delegators.
The top 64 validator candidates with the most stake will become BitSong Network validators. At every block, a validator is chosen to sign that block, based on their voting power (determined by the amount of bonded tokens) at the time of the block. Validators with higher voting power will sign blocks more often than validators with lower voting power.
Validators and their delegators will earn BTSG as block provisions and tokens as transaction fees through execution of the Tendermint consensus protocol. Initially, transaction fees will be paid in BTSG. Note that validators can set commission on the fees their delegators receive as additional incentive. Choosing the right commission level is a balance, as the validator must be able to remain competitive enough to attract delegators to stake their BTSG.
Warning: If validators double-sign, are frequently offline or fail to participate in governance, their staked BTSG, including BTSG delegated to them, may be slashed. The penalty depends on the severity of the violation.
Becoming a validator comes with a set of prerequisites, including hardware and software requirements.
Delegating your BTSG to a validator on the BitSong mainnet provides a relatively straightforward way to help secure the network and earn BTSG rewards. It requires no hardware setup, although there are some installation requirements.
As a delegator, your role is to choose a validator or validators and stake your BTSG to them. Your rewards may vary according to various factors, including the amount of BTSG staked to your chosen validator(s) and the commission your chosen validator(s) charge.
Rewards are liquid, meaning you can decide what to do with them. You could re-delegate them for a compound effect, or spend them in the BitSong music ecosystem, or trade them for crypto or fiat currencies.