POSDAO : Proof of Stake Decentralized Autonomous Organization

In this paper we introduce POSDAO, a Proof of Stake (POS) algorithm implemented as adecentralized autonomous organization (DAO). It is designed to provide a decentralized, fair,and energy efficient consensus for public chains. The algorithm works as a set of smartcontracts written in Solidity. POSDAO is implemented with a general purpose BFT consensusprotocol such as Authority Round (AuRa) with a proposer node and probabilistic finality, orHoney Badger BFT (HBBFT), leaderless and with instant finality. Validators are incentivized tobehave in the best interests of a network through a configurable reward structure. The algorithmprovides a Sybil control mechanism for managing a set of validators, distributing rewards, andreporting and penalizing malicious validators. The authors provide a reference POSDAOimplementation, xDai POSDAO, which uses xDai as a stable transactional coin and arepresentative ERC677 token (STAKE) as a staking token. The reference implementationfunctions on an Ethereum 1.0 sidechain and utilizes the AuRa consensus protocol. Assets arebridged between the Ethereum mainnet and the xDai POSDAO network using several instancesof the POA TokenBridge