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validators, there is a greater risk that the network will slow down. So, a balance around greater scalability must be struck. Although DPoS promotes greater decentralization, in some instances, such as where participation in the voting process is low, concerns about centralization can arise. For example, having a limited number of token holders could impact and influence the network. As with PoS, DPoS stakeholders can use their power from larger stakes to form cartels, which can make the network more centralized and less resilient to attacks—resulting in both regulatory

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Technology plays an increasingly important role in financial services. With the pace of technological inno-vation moving ever faster, the role new technology plays in the provision of financial services is becoming increasingly fundamental. New technology can generate efficiencies for firms, lowering costs that can be passed on to end users. It can increase access to financial services and products for consumers, particularly the most vulnerable; however, new technology can also create new risks and unintended consequences that can harm financial stability, consumer protection, and market integrity. This primer is designed for financial supervisors at central banks, regulatory authorities, and government departments. It adds to existing literature by summarizing key aspects of popular consensus mechanisms at a high level, with a specific focus on how such mechanisms may impact the mandates of supervisors and policymakers when deployed in financial services markets. It could also help inform IMF staff on policy development and technical assistance related to crypto assets, stablecoins, and blockchains.