QP-ASR-001 | Rev 001 Eff Date: 09-08-2023 Polkadot Cryptocurrency Consensus Mechanism Nominated Proof-of-Stake (NPOS) Polkadot implements Nominated Proof-of-Stake (NPOS), a relatively novel and sophisticated mechanism to select the validators who are allowed to participate in its consensus protocol. NPOS encourages DOT holders to participate as nominators. Any potential validators can indicate their intention to be a validator candidate. Their candidacies are made public to all nominators, and a nominator, in turn, submits a list of up to 16 candidates that it supports, and the network will automatically distribute the stake among validators in an even manner so that the economic security is maximized. In the next era, a certain number of validators having the most DOT backing get elected and become active. For more information about the election algorithm go to this page on the wiki or this research article. As a nominator, a minimum of 250 DOT is required to submit an intention to nominate, which can be thought of as registering to be a nominator. Note that in NPOS the stake of both nominators and validators can be slashed. For an in-depth review of NPOS see this research article. MINIMUM NOMINATION TO RECEIVE STAKING REWARDS Although the minimum nomination intent is 250 DOT, it does not guarantee staking rewards. The nominated amount has to be greater than minimum active nomination, which is a dynamic value that can be much higher than 250 DOT. This dynamic value depends on the amount of DOT being staked, in addition to the selected nominations. For more information, see: https://wiki.polkadot.network/docs/learn-staking, https://polkadot.network/blog/polkadot-consensus-part-1-enhanced-economic-security-via-npos/ Note: Each question carries 1 Mark Question 1: Having read the excerpt above, choose a consensus mechanism relatively similar to that used by Polkadot from options below: a. b. C. d. فن Proof-of-work Proof-of-stake Delegated proof-of-stake Proof-of-Capacity Question 2: Why would Polkadot choose Proof-of-Stake over Proof of Work? a. b. C. Lower energy utilization Better decentralization Enhance resistance to 51% attacks Faster transaction speed Page 2 of 10