Terminology

Bonds are equivalent to a capital expense in Proof of Work. A miner buys hardware and electricity, and commits it to a single branch in a Proof of Work blockchain. A bond is coin that the validator commits as collateral while they are validating transactions.

Slashing The proposed solution to the nothing at stake problem in Proof of Stake systems [7]. When a proof of voting for a different branch is published, that branch can destroy the validator's bond. This is an economic incentive designed to discourage validators from confirming multiple branches.

Super Majority A super majority is 2/3rds of the validators weighted by their bonds. A super majority vote indicates that the network has reached consensus, and at least 1/3rd of the network would have had to vote maliciously for this branch to be invalid. This would put the economic cost of an attack at 1/3rd of the market cap of the coin.

Bonding A bonding transaction takes an amount of coin and moves it to a bonding account under the users identity. Coins in the bonding account cannot be spent and have to remain in the account until the user removes them. The user can only remove stale coins that have timed out. Bonds are valid after super majority of the current stakeholders have confirmed the sequence.

Voting It is anticipated that the Proof of History generator will be able to publish a signature of the state at a predefined period. Each bonded identity must confirm that signature by publishing their own signed signature of the state. The vote is a simple yes vote, without a no. If super majority of the bonded identities have voted within a timeout, then this branch would be accepted as valid.

Unbonding Missing N number of votes marks the coins as stale and no longer eligible for voting. The user can issue an unbonding transaction to remove them. N is a dynamic value based on the ratio of stale to active votes. N increases as the number of stale votes increases. In an event of a large network partition, this allows the larger branch to recover faster then the smaller branch.

Elections Election for a new PoH generator occur when the PoH generator failure is detected. The validator with the largest voting power, or highest public key address if there is a tie is picked as the new PoH generator. A super majority of confirmations are required on the new sequence. If the new leader fails before a super majority confirmations are available, the next highest validator is selected, and a new set of confirmations is required. To switch votes, a validator needs to vote at a higher PoH sequence counter, and the new vote needs to contain the votes it wants to switch. Otherwise the second vote will be slashable. Vote switching is expected to be designed so that it can only occur at a height that does not have a super majority. Once a PoH generator is established, a Secondary can be elected to take over the transactional processing duties. If a Secondary exists, it will be considered as the next leader during a Primary failure. The platform is designed so that the Secondary becomes Primary and lower rank generators are promoted if an exception is detected or on a predefined schedule.