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Consensus Mechanism Used in Shardeum

Shardeum is a new layer 1 blockchain network that will go live after its mainnet launch in Q4 of 2022 as per its litepaper. It uses a novel combination of Proof of Stake (PoS) + Proof of Quorum (PoQ) consensus mechanism. 

Proof of Stake ensures that anyone with the minimum required stake can participate in validation. Proof of Quorum determines how the transactions are validated within a consensus group.

POQ Compliments Dynamic State Sharding

Shardeum’s consensus is designed to increase TPS linearly with each node joining the network. This is of significance since Shardeum will be a dynamically state sharded network. ‘State’ is considered the latest record of information of the account balances and smart contracts on a network at any given time.

In typical blockchain networks, the state of the network does not change until a majority of the nodes agree on the current state of the chain. Thus, the computing power of unsharded networks is as good as the node with the lowest processing power. However, dynamic state sharding enables Shardeum to maintain atomic composability through transaction-level consensus. Further, on typical 1st and 2nd generation blockchain networks, transactions at best, are processed sequentially and at a block level which slows down the network significantly. On Shardeum though, transactions are processed simultaneously across multiple shards or partitions.

What is Proof of Quorum or PoQ?

As opposed to other consensus algorithms in use today, nodes in PoQ validate the transactions individually as soon as they are received with a time stamp (with no possibility of double spends). This is followed by gossiping the transactions to all the other nodes in a consensus group/shard on the network instead of every node on the network. Every node, essentially, will know that every other node in the group knows about a particular transaction. This enables a trustless and leaderless collection of electronic votes (or quorum) in the form of receipts.

Electronic voting enables consensus nodes to digitally sign transactions without the need to ‘send’ votes preventing forgery. And when there are more than 50% of the receipts, transactions are committed on the network. Gossip protocols and leaderless validation ensures the network attains aBFT security level in my opinion. It is virtually impossible for a malicious node to take over the network.

Further, processing individual transactions at transaction level instead of block level eliminates limitations of a fixed block time and block size as is the case on typical blockchains. Thereby, finality is reached very quickly with low latency which helps to avoid network congestion. It would also mean the network won’t need excessive energy more than what is required to process transactions. Well, that is pretty much the case with Visa or Mastercard and existing data centers anyways, right?

A Fast Internet Connection is Enough to increase TPS

The processed transactions are grouped into blocks or partitions and passed on to archive nodes. This allows the consensus nodes to not have to deal with storing the transaction history and only maintain the current state of each account. That means a fast internet connection alone could be enough for nodes on the network to significantly increase its throughput at any given time.

According to the chief scientist of Shardus (the protocol layer of Shardeum), Omar Syed – once you’ve done the consensus for the transactions, the data structure you use to store them does not matter. The reason why it matters for other networks is because the data structure is tightly coupled with the consensus.

Staking is an essential component in the validation process of Shardeum to discourage and slash bad actors. Thus, PoS + PoQ will render the Shardeum highly scalable and secure while fee on the network remains low and stable.

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Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum foundation.

About the Author : Shriraam Sekar is a crypto writer/marketer involved in the space since 2019. He covers Layer 1s, DeFi, NFTs, Metaverse, GameFi, SocialFi, and crypto regulations. Follow him on Twitter for collaboration related to crypto/Web 3.0

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