# Consensus (DPoS) Mosaic Chain uses a custom Delegated Proof of Stake (DPoS) consensus mechanism. It's efficient, cost-effective, and sustainable—and it works differently from traditional DPoS systems. It is a bit similar to Polkadot's nominated proof-of-stake scheme. Here's how it works. *** ### **Why Consensus Matters** Consensus mechanisms are essential to blockchain networks. They ensure everyone agrees on what's valid, who can produce blocks, and how the network stays secure. Mosaic Chain uses DPoS instead of Proof of Work (which requires massive computational power) or traditional Proof of Stake (which can be inefficient). DPoS balances decentralization, security, and performance. *** ### **The Actors: Validators and Delegators** #### **Validators** A validator is an active participant in block production. **Validators:** * Run full validator nodes on Mosaic Chain hardware * Produce new blocks every 6 seconds * Earn MOS coins as staking rewards (from block rewards and transaction fees) * Redistribute rewards to delegators who backed them * Must bind a Validator NFT (PoS or DPoS) to participate in block production Validator rights are represented by NFTs—they're transferable and sellable, democratizing the right to validate on Mosaic Chain. **In Polkadot terminology**, Mosaic Chain validators are technically **collators** because they collect and batch transactions before sending them to Polkadot's relay chain for finalization. Learn more about actors [here.](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators.md) *** #### **Delegators** Delegators are passive participants who help secure Mosaic Chain by delegating their capital to DPoS validators. They earn staking rewards without running validator infrastructure. By delegating their stake to DPoS validators, delegators participate in block production and earn rewards (and slashing) proportional to their contribution—without the technical overhead of running a node. **How Delegators Participate:** Delegators participate by staking MOS coins and/or Delegator NFTs to DPoS validators. Learn more on the [Staking →](/documentation/mosaic-chain/architecture-and-technology/staking.md) page. *** ### **Validator Subset Selection Algorithm** Here's where Mosaic Chain's DPoS gets interesting. Traditional DPoS systems require tons of validators to maintain decentralization. But more validators means slower networks—peer-to-peer connections become difficult, and computational overhead grows exponentially. Mosaic Chain solved this with the **Validator Subset Selection Algorithm**. #### **How it works:** * Mosaic Chain has **2,500+ validators** participating in consensus (when fully onboarded) * Each session (1 hour = \~600 blocks), approximately **200 validators** are randomly selected into the **active set** * These active validators produce blocks and earn rewards * Remaining validators stay in **waiting status**, ready for the next session *** #### **Validator Statuses:**
StatusDescription
ActiveElected into the active set for this session. Producing blocks and earning rewards.
WaitingOnline and participating in consensus, but not producing blocks yet. Waiting to be elected.
SelectedThe algorithm announced this validator will be elected into the active set in the next session.
ChilledOffline and not participating. Can be voluntary (validator chose to go offline) or automatic (auto-chilling triggered by slashing).
*** #### **The Benefit:** By randomly selecting \~200 validators per session instead of requiring thousands, Mosaic Chain maintains: * ✅ **Fast block production** (6-second blocks) * ✅ **True decentralization** (all validators get a fair chance) * ✅ **Network efficiency** (no exponential computational overhead) *** ### **Multiple Validator Selection (Unique to Mosaic Chain)** Here’s a key difference from many traditional DPoS systems: In some DPoS blockchains, each delegator can stake with only one validator at a time, which can concentrate voting power and increase centralization risk. Mosaic Chain takes a more flexible approach — delegators can distribute their stake across multiple validators simultaneously. Since Mosaic’s active validator set rotates every session, delegators earn rewards only when their chosen validators are active. By spreading their stake, delegators can smooth out their earnings and help secure the network more evenly. *** #### **Why this matters:** **Recommended strategy:** * Distribute MOS stakes to multiple validators * Delegate Delegator NFTs to multiple validators * Diversify to reduce slashing risk * If one validator gets slashed, only the amount staked with that validator is affected—not your total assets *** ### **Staking Rewards & Commission** Validators earn rewards by producing blocks. These rewards come from: * **Block rewards** - Newly minted MOS coins (calculated via expansion formula) * **Transaction fees** - Split between validators and the treasury Validators share rewards with delegators proportional to their stake, minus a commission (minimum 1% set by the validator). **Transaction fee split:** * 40% - Burnt (removed from circulation) * 50% - Goes to the validator who produces the block * 10% - Goes to the Mosaic Treasury Tips (anything on top of the mandatory fee) go 100% to the validator. ### **Staking Contracts** When delegators stake with validators, they create staking contracts with: * **Staked amount** - MOS coins or NFT nominal value * **Minimum staking period** - Global minimum: 28 days (672 sessions) * **Commission rate** - Set by validator (minimum 1%) After the minimum staking period ends, delegators can unstake (nearly instant, 1 session processing time). Learn more on the [Staking →](/documentation/mosaic-chain/architecture-and-technology/staking.md) page. *** ### **Slashing: Penalties for Misbehavior** If a validator misbehaves (goes offline, acts maliciously, etc.), it gets slashed—a percentage of staked assets is removed and sent to the Mosaic Treasury. #### **Slash Amount** Each slashing event removes **0.1% of the user's stake**. **What Gets Slashed:** * Validator MOS coins - Reduced by 0.1% of stake * Validator NFT nominal value - Reduced by 0.1% * Delegator stakes - Proportionally reduced if their validator is slashed * Delegator NFT nominal values - Proportionally reduced *** #### **Auto-Chilling Protection** If a validator is slashed in two consecutive sessions, **auto-chilling** is triggered automatically. The validator is removed from the normal validator set to protect delegators from further losses. **Threshold:** If a Validator NFT's nominal value drops below **80% of its initial value**, the validator loses block production rights until they top up the NFT. *** #### **Validator Slacking Period** When a validator is **chilled** for more than a **72-session (3-day) slacking period,** delegators can exit without penalty (even before the minimum staking period ends). This protects delegators from validators who repeatedly misbehave. Learn more on the [Slashing & Auto-Chilling →](/documentation/mosaic-chain/architecture-and-technology/slashing-and-chilling.md) page. *** ### **Why This Design Works** Mosaic Chain's DPoS combines: * ✅ **Large validator set (2,000+)** for true decentralization * ✅ **Efficient active set (\~200 per session)** for fast blocks * ✅ **Multiple validator selection** for steady rewards and reduced risk * ✅ **NFT-based participation** for transparent, transferable rights * ✅ **Auto-chilling protection** for safety * ✅ **Fair reward distribution** with transparent slashing (0.1% per event) * ✅ **Treasury funding** from block rewards and transaction fees **The result:** A consensus mechanism that's decentralized, secure, efficient, and fair. *** ### **Ready to learn more?** * [Actors (Validators and Delegators) →](/documentation/mosaic-chain/architecture-and-technology/actors-validators-and-delegators.md) - Learn about the three participant types * [NFT-Based Validator System →](/documentation/mosaic-chain/architecture-and-technology/nft-based-validator-system.md) - Understand the NFT technology * [Staking →](/documentation/mosaic-chain/architecture-and-technology/staking.md) - Detailed staking mechanics and rewards * [Slashing & Auto-Chilling →](/documentation/mosaic-chain/architecture-and-technology/slashing-and-chilling.md) - Penalties and protections --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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