How dPoS works

How Cardano's dPOS works:

Cardano’s delegated Proof-of-Stake consensus protocol (dPoS) is unique from other PoS blockchains in that the community of ADA holders, or delegators, can participate directly in the protocol. First, Cardano relies on full nodes, or Stake Pool Operators (SPOs), to secure the network.

Cardano has around 3,000 SPOs that validate, propagate, and add blocks of transactions to the blockchain. To become a SPO, one must first set up a stake pool using the appropriate software and hardware.

The higher the total combined stake of the SPO and its delegators, up unto a maximum threshold, the higher the chance the SPO has of getting selected to add a block of transactions as a slot leader. When a SPO is selected and successfully adds a block of transactions, they are rewarded with ADA, which is split between the SPO and the pool’s delegators. ADA rewards accrue each epoch, which occurs every five days.

Delegation on Cardano is non-custodial, meaning that ADA never leaves a delegator's wallet and the SPO has no control over a delegator’s funds. Delegated funds are never locked and can be withdrawn or transferred at any time by the delegator.

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