Proof-of-Stake Protocols Modelling: A Extensible Framework for Incentives Design

With the rapid development of blockchain technology, more and more platforms and various protocols keep emerging. The specifications of Proof-of-Stake (PoS), delegated Proof-of-Stake (DPoS) as well as many variants are designed together with the creation of these protocols. However, a general, formal scientific foundation to model incentives in different blockchain and distributed ledger technologies (DLT) systems is still lacking. In this paper, we introduce a general and extensible framework to model and evaluate the design of incentive mechanisms in PoS networks. And we apply the framework to the Hedera system, a Directed Acyclic Graph (DAG)-based PoS system where we measure its decentralisation and inequality of wealth distribution. Our framework serves as a generic framework to investigate the staking selection and reward dynamics with the concomitant effects on the crypto economics of various PoS-based systems.