The Security of Delegated Proof-of-Stake Wallet and Stake Pools

The proof-of-stake paradigm is used to implement a robust ledger, i.e., immutable and decentralized collection of records via the blockchain data structure, achieving similar security properties of the proof-of-work paradigm without the drawback of centralization risks and energy high costs and, at the same time, allowing a richer and more complex system, where spending transactions are not the only transactions. For example, it allows the delegation, or staking, transaction, where the users delegate the rights over their stake. This crucially important action allows the creation of stake pools, i.e., nodes that accumulate stake. In this chapter, we review the basic security properties in this blockchain-based consensus protocol with a short review of the proof-of-work design, comparison, and known attacks to proof-of-stake-based protocol. Finally, we focus on the security of delegated proof of stake and its wallet, the main contents of this chapter. We introduce main requirements for a wallet, address, and account framework and its security in the presence of stake pools and newly identified attacks named malleability attacks.