Timothea Horwell | April 14 2020
Timothea Horwell | April 14 2020
Delegated Proof of Broker (DPoB) is the latest staking model that underpins Orion's ecosystem, built on a network of brokers and stakers. Both will enjoy high-yield results on their assets for the best staking in DeFi.
Mining is one of the most commonly known consensus mechanisms, yet for a technology that arose out of the need for a decentralized and democratic alternative to the centralized finance world, mining (and crypto in general) is becoming increasingly centralized. Two thirds of all BTC mining, for example, now takes place in China through the exploitation of cheap hydro-electric power. The democracy of mining is no more – smaller players simply can’t match the computing power of these mining behemoths which creates a large barrier to entry. The emergence of monopolies in consensus mechanisms like Proof of Work (PoW) unveil inherent flaws in these networks; instead of democratically benefiting all members of the chain, only a select few can reap the benefits.
With that said, mining is not nearly as beneficial as it once was, and results are expected to continue to decline in the wake of events like the Bitcoin halving. And while it might be a useful way to control the release of new tokens, it’s incredibly energy-inefficient and damaging to the environment, making it difficult and costly to scale.
Staking has grown as a solution that doesn’t require the computing power of mining - allowing stakers to commit cryptocurrency, instead of computing power, to blockchains and DLTs. Because there are no labor-intensive PoW puzzles, it’s far more energy-efficient. But Proof of Stake (PoS) is not without its flaws. In return for locking up tokens, users create master nodes that manage transactions; the more they stake, the greater chance they’ll be chosen to process the transaction. As a result, PoS is not free from the emergence of monopolies, and high monetary barriers to entry still exist.
Perhaps most critically though, due to the inherent inflationary nature of existing consensus mechanisms, miner/staker benefits are typically minted as new tokens - hurting the underlying asset over time.
The Latest in Staking: Delegated Proof of Broker
Astutely aware of these issues and driven by a mission to create a truly decentralized crypto landscape, Orion Protocol has created a new staking model that underpins their entire ecosystem - a DeFi platform building B2B and B2C solutions on the most comprehensive liquidity aggregator in market.
Designed using features and advantages of PoS, Delegated Proof of Broker (DPoB) governs their network, allowing consensus on their platform in the most efficient, beneficial, scalable, and decentralized way.
Every product and function on the Orion platform operates using DPoB, from their Trading Terminal (which aggregates the liquidity of every major centralized and decentralized exchange into one trustless and decentralized platform) to their B2B DeFi solutions (including a DEX launch kit for blockchains, Liquidity Boost Plugin for exchanges, and Enterprise Trade widget for crypto projects with non-crypto clients).
Through DPoB, individuals that stake assets will enjoy high-yield results on their digital assets. The consensus mechanism is comprised of two core components:
As per the name, the entire ecosystem is built on a network of Brokers running Orion Broker Software with accounts across multiple exchanges. This software allows their computers to automatically execute trades routed from the liquidity aggregator via their trading accounts - depending on which exchange is currently offering the best price. Nothing is mined and brokers’ machines are simply used to execute transactions via their own account, making DPoB incredibly efficient and scalable. Similar to traditional staking models, Brokers are chosen to execute trades based on how much ORN, Orion’s native token, they stake in the Decentralized Brokerage. Brokers receive a portion of fees from each trade they execute.
However, Orion set out to create a governance mechanism more democratic than its predecessors, without the high-barriers to entry or opportunities for monopolies to form. To combat the possibility of monopolies emerging on its platform via the Decentralized Brokerage, Orion has built a secondary integral component into the mechanism: Non-Broker Stakers.
On the Orion network, not everyone has to be a broker to enjoy staking results. A Non-Broker Staker (NBS) is rewarded for simply staking ORN tokens, without the resources necessary to be a broker (accounts on multiple exchanges and the necessary resources to stake) or the need to fulfill a broker’s task. Instead, Non-Broker Stakers can stake ORN tokens to ‘vote’ for their choice of Broker, choosing Brokers by the variable reward share they offer. Each token is equivalent to one vote towards a potential Broker, contributing to the total amount of ORN a Broker stakes and increasing the respective Broker’s chance of being chosen for trade execution.
This is a win-win for the integral components of the network - and the network itself. Brokers are incentivized to offer attractive rates to Non-Broker Stakers in order to grow their Decentralized Brokerage stake - a larger stake will increase their chance of being chosen and increase their results. Brokers can share any amount of results from their trading revenues to Non-Broker Stakers: a variable reward process means Brokers with smaller stakes can dynamically offer more favorable rates upon seeing other Brokers' stakes growing, in turn growing their own stakes and preventing monopolies emerging on the network. Non-Broker Stakers can join larger Decentralized Brokerage stakes without the resources necessary to become a Broker themselves, lowering the barrier to entry for staking.
And the network? It remains decentralized, non-monopolized, and democratic, giving stakers everywhere the chance to earn benefits - regardless of capital or computing power. Brokers and Non-Broker Stakers receive results generated via Orion’s various revenue streams, preserving the necessity of the underlying ORN token over time.
Taking Staking Further
Given the dynamic and democratic nature of the variable reward share, the staking process alone has the opportunity to be a highly-beneficial way to earn passive benefits. But, not satisfied with this alone, Orion has partnered with several DeFi providers to provide the crypto industry with the most beneficial staking mechanism in DeFi, further monetizing Orion’s Decentralized Brokerage via lending platforms. Orion will monetize the ORN tokens staked in the Decentralized Brokerage to earn additional interest via these lending platforms. The interest is then distributed back to Brokers and Non-Broker Stakers for increased results: achieving optimal results for their Decentralized Brokerage and the highest yield for stakers.
Application Beyond Staking
The benefits of DPoB reach far beyond staking itself. The network of Brokers powers every aspect of the Orion platform, from order execution, to clearing, to the governance of choosing a broker, and everything in between, this ensures true decentralization.
It’s through this governance mechanism that Orion is able to aggregate the liquidity of all the entire crypto market (from all major centralized and decentralized exchanges) into one decentralized platform - making it available for trading in a decentralized and non-custodial way. Users simply connect their wallet and execute orders among multiple exchanges (even centralized exchanges they don’t have accounts on) without ever losing ownership of their assets. This unrivaled liquidity in a decentralized place means the best price, every time, with zero risk.
Each of their B2B DeFi products work via transactions from their liquidity aggregator; every transaction acts as a trade being carried out by a broker, further utilizing the Decentralized Brokerage and the ORN token at its foundation.
The staking mechanism plays an integral role in the preservation of the all-important ORN token, too. DPoB encourages all parties to stake and remove their ORN tokens from the circulating supply in return for maximum results. Additionally, Orion will take 100% of the licensing fee revenue generated from their DeFi products to buy ORN from the open market and locking them into the Decentralized Brokerage forever - further decreasing circulating supply.
The Future of Staking
The crypto landscape is continuously evolving, looking for solutions to problems that emerge as it does so. From the origins of mining, staking has grown as an effective way for users to commit resources to maintain crypto’s infrastructure and be rewarded for doing so. But for the integrity of our industry’s future, we need to continue to work to improve inefficiencies.
Orion aims to do just that, having taken careful consideration of the advantages and disadvantages of consensus mechanisms that have come before in order to create DPoB - the consensus mechanism powering their entire ecosystem. What they have created aims to be a decentralized and democratic solution, without the barrier to entry or monopolization of legacy mechanisms - and far more efficient and scalable.
Unlike other traditionally inflationary mechanisms, DPoB stakers receive results generated via Orion’s revenue streams, preserving the necessity of the underlying ORN token. And, perhaps most importantly, Orion is monetizing the Decentralized Brokerage even further: promising high-yield passive benefits through the most beneficial staking mechanism in DeFi.