To increase security, the Plasm Network will have consensus and reward algorithm upgrades over time. Plasm will start using a Proof of Authority model run by community selected validators.
The next upgrade will change reward and consensus to collator which is a Parachain requirement. Ultimately Plasm will move to NPoS which is used by Polkadot's Relaychain. More details about reward distribution can be found in the PLM Token Ecosystem chapter.
Proof of Authority is a consensus-building algorithm that operates only with a validator selected by the community. Public blockchains can be vulnerable when there are a low amount of reliable validators. For this reason, PoA will operate until sufficient token distribution and potential validators can be confirmed. The validator reward structure will follow PoS convention.
Plasm Network uses NPoS a Polkadot relay chain feature. This consensus algorithm consists of 3 steps:
A Nominator selects a validator NPoS
A validator verifies transactions and makes a new block BABE
Validator finalizes the block that was delivered in the network GRANDPA
The block reward is distributed to the validator who created the block and respective Nominator. A reward is also paid to the Plasm Network contributors.