An environmentally sustainable, verifiably secure proof-of-stake protocol with rigorous security guarantees.
The blockchain revolution started with bitcoin.
It continues now with Ouroboros:
A proof-of-stake protocol that provides and improves the security guarantees of proof-of-work at a fraction of the energy cost. Ouroboros applies cryptography, combinatorics, and mathematical game theory to guarantee the protocol’s integrity, longevity, and performance, and that of the distributed networks that depend upon it.
What is Ouroboros
Highly scalable and sustainably secure, Ouroboros is the foundation of Cardano and of a blockchain-built future
Ouroboros is the first provably secure proof-of-stake protocol, and the first blockchain protocol to be based on peer-reviewed research. Ouroboros combines unique technology and mathematically-verified mechanisms - which, in turn, combine behavioral psychology and economic philosophy - to ensure the security and sustainability of the blockchains that depend upon it. The result is a protocol with proven security guarantees able to facilitate the propagation of global, permissionless networks with minimal energy requirements - of which Cardano is the first.
At the heart of Ouroboros is the concept of infinity. Global networks must be able to grow sustainably and ethically: to provide greater opportunities to the world while also preserving it. This becomes possible with Ouroboros.
Ouroboros facilitates the creation and fruition of distributed, permissionless networks capable of sustainably supporting new markets.
Ouroboros exists to define the parameters of the new world: a protocol more secure, scalable, and energy-efficient than anything that has come before.
Ouroboros features mathematically verifiable security against attackers.
The protocol is guaranteed to be secure so long as 51% of the stake – in the case of Cardano, ada – is held by honest participants, which, in addition to other novel concepts, is achieved through random leader selection. The protocol continues to evolve through new iterations and rigorous security analysis.
Incentives & Rewards
To ensure the sustainability of the blockchain networks using Ouroboros, the protocol features an incentive mechanism that rewards network participants for their participation.
This can either be operating a stake pool or delegating a stake in ada to a stake pool. Rewards (in the form of ada) can be earned by completing either of these activities.
Stake Delegation And Stake Pools
Ouroboros is a proof-of-stake protocol. It distributes network control across stake pools: node operators with the infrastructure required to ensure a consistent and reliable connection to the network.
For each slot, a stake pool is assigned as the slot leader, and is rewarded for adding a block to the chain. Ada holders may delegate their stake to a specific stake pool, increasing its chance of being selected as the slot leader, and share in the stake pool’s rewards.
Ouroboros solves the greatest challenge faced by existing blockchains: the need for more and more energy to achieve consensus. Using Ouroboros, Cardano is able to securely, sustainably, and ethically scale, with up to four million times the energy efficiency of bitcoin.
Ouroboros ensures the continuity of each moment: the incremental building of an unbreakable chain. Through it, every addition – transaction, agreement, sharing of information – becomes part of an immutable past.
Proof of Stake
Proof-of-Stake And Proof-of-Work
There are two main blockchain protocols: proof-of-stake (PoS) and proof-of-work (PoW). These protocols are consensus algorithms for distributed networks: rulesets that dictate how networks – made up of thousands of nodes – agree on new additions (blocks) in a permissionless setting.
Proof-of-work is the blockchain protocol used by bitcoin. Proof-of-work began a revolution: it enabled the creation of secure, permissionless, distributed networks. But to achieve consensus for each new block, proof-of-work requires an enormous amount of energy: an amount so large that the supported blockchains struggle to sustain and scale to the performance requirements of global networks.
Proof-of-stake answers the performance and energy-use challenges of proof-of-work, and arrives at a more sustainable solution. Instead of relying on 'miners' to solve computationally complex equations to create new blocks – and rewarding the first to do so – proof of stake selects participants (in the case of Cardano, stake pools) to create new blocks based on the stake they control in the network.
This enables networks to scale horizontally, increasing performance by incorporating additional nodes, rather than vertically, through the addition of more powerful hardware. The resulting difference in energy use can be analogized to that between a household and a small country. PoS is positioned scale to the mass market; PoW is not.
How Ouroboros Works
Ouroboros processes transaction blocks by dividing chains into epochs, which are further divided into time slots. A slot leader is elected for each time slot and is responsible for adding a block to the chain. To protect against adversarial attempts to subvert the protocol, each new slot leader is required to consider the last few blocks of the received chain as transient: only the chain that precedes a prespecified number of transient blocks is considered settled. This is also referred to as the settlement delay, and is the mechanism through which the ledger is securely passed between participants.
Ouroboros is a meld of innovative technology and philosophy. Its research explores how we behave as a society, to discover an ideal balance - defined through game theory - between individual and collective interests. Ouroboros’ incentive mechanism rewards participants for their honest participation, and disincentivizes dishonest actors. It is a stable and sustainable foundation for permission networks that are built to endure: the infrastructures of the future.