Hybrid PoW/PoS

What Is Hybrid PoW/PoS?

A hybrid PoW/PoS network supports both proof-of-stake and proof-of-work consensus distribution mechanisms. This strategy tries to combine the security of PoW consensus with the governance as well as the energy efficiency of PoS.

Exploring the Idea of Hybrid PoW/PoS

The goal of hybrid Proof of Work and Proof of Stake systems is to harness the benefits of both technologies and use them to compensate for each other's shortcomings. Decred is one of the few cryptocurrencies that uses both PoW and PoS in identifiable forms, combining them to create a multi-factor or a hybrid consensus method. 

"Masternode coins" are hybrids in that they feature a recognizable Proof of Work component that serves a comparable duty to Bitcoin and an additional role for special nodes. Similar to Proof of Stake, these special nodes are often required to keep a specific amount of the currency as collateral to show that they can be trusted to behave in the network's best interests. Dash is the first master node coin and calls this technology Proof of Service. 

Moreover, PoS voters cannot retain their relative proportion of circulating DCR solely by staking because they receive 30% of the block reward. In exchange for their assistance in safeguarding the network and alleviating the "nothing at stake" dilemma of pure PoS systems, the majority of newly generated DCR goes to PoW miners. To fulfill their operational costs, miners would likely have to sell a considerable percentage of the rewards they get, ensuring a fair supply of DCR in the market.