4.2 – Proof-of-Stake Consensus

When confirming transactions over TRRUE Chain, the Network will reach consensus between Validators using a delegated Proof-of-Stake (dPoS) mechanism. Each Validator must first lock a fixed Validator Stake of [TRRUE] in order to run the Validator Node and participate in the consensus to earn a reward.

In selecting a consensus mechanism for TRRUE Chain, the advantages of PoS over Proof-of-Work (PoW) and Proof-of-Authority (PoA) are significant.

Fig 10. Proof-of-Stake Consensus Mechanism:

	Owner stakes their native tokens in staking pools
	Algorithm pseudo-randomely selects next validator
	This selected validator proposes a block of transactions
	Other validators verify and approve the transaction
	The block is added to the existing blockchain
	The validator earns a transaction fee

Compared with other blockchain systems, dPoS offers a more suitable foundation for Trrue Chain, aligning seamlessly with the project’s environmental concerns, scalability requirements, and overall sustainability objectives. 13

	ESG-Related Considerations PoS stands out for its energy efficiency, a paramount concern in the modern ESG-conscious landscape. Unlike PoW, which demands substantial computational power and electricity, PoS relies on validators who stake a portion of their tokens. This approach drastically reduces the carbon footprint associated with mining or validating operations, making PoS an environmentally responsible choice. Given the TRRUE focus on environmental sustainability, PoS aligns harmoniously with its core values.
	Scalability & Transaction Throughput PoS offers superior scalability when contrasted with PoW. In PoW systems, scaling often involves complex and contentious protocol upgrades. PoS, on the other hand, facilitates seamless scalability by enabling higher transaction throughput as the network grows. TRRUE Chain, with its diverse ecosystem of projects and transactions, necessitates a mechanism that can adapt to increasing demands efficiently. PoS meets this requirement by allowing the network to scale gracefully as the User base expands.
	Security & Decentralisation PoS systems maintain a high level of security through economic incentives, not solely via granted permission as is the case for PoA. Validators who stake their tokens have a vested interest in the integrity of the TRRUE Chain Network, as malicious activities would result in financial penalties. This economic disincentive makes PoS networks inherently secure. Moreover, PoS can enhance decentralisation, as participants are not limited by the computational constraints seen in PoW or the costly hardware requirements. This decentralised nature aligns with the TRRUE ethos of fostering a transparent and inclusive ecosystem.
	Governance & Network Control TRRUE Chain PoS will incorporate on-chain governance mechanisms. This allows token holders to participate in community governance decisions while Validators are responsible for Network and protocol governance, ensuring a democratic and community-driven approach to protocol upgrades and network modifications. This inclusivity empowers stakeholders and fosters a sense of ownership, aligning the development of the Consortium Network with the interests of all other Ecosystem Members.
	Token Utility & Economics The financial incentive of staking creates a secure Network that is able to become more decentralised over time, but it also benefits the [TRRUE] token economy by increasing demand and locking value.

Aside from the systematic benefits of PoS, the Consortium Members for the TRRUE Chain DLT can earn a variable yield from their Validator Stake and Node operations, resulting from three simultaneous earning opportunities:

	1. Network Fees Are paid for any transaction or data record being broadcast to TRRUE Chain DLT. Users define the Network Fees as a bid so that fees are variable based on Validator availability in a free-market mechanism.
	2. Network Rewards Are paid out by the TRRUE Chain protocol to enhance Validator yield and encourage growth of the Network Consortium. These will be paid for the first 5-10 years, following which Validators will not need supplementary rewards because the increased activity of the established User base will provide sufficient Network Fees to compensate them.
	3. Validator Stake Value Will fluctuate while the [TRRUE] is locked, resulting in potential appreciation of the TRRUE Coins as demand of the TRRUE Chain Network grows over time. Consortium Members may also be able to leverage the locked value via third-party DeFi protocols.