Transaction Consensus

Shardeum uses a combination of Proof of Stake (PoS) and Proof of Quorum (PoQ) as its consensus mechanism to validate every transaction.

Proof of Stake

Every Validator node in Shardeum is required to stake a minimum stake amount to start participating in the network. These validator nodes are incentivized to earn SHM as long as they are validating transactions honestly and if a node acts maliciously, its staked SHM is slashed, ensuring the network security.

Proof of Quorum

Shardeum uses transaction-level consensus instead of block-level consensus like other popular networks. Transaction-level consensus eliminates the complexities needed to ensure atomic processing, otherwise required by block-level consensus platforms. This further results in immediate finality and low latency, which prevents network congestion.

Transactions are validated individually as soon as they are received with a time stamp (with no possibility of double spending). This is followed by gossiping the transactions to all the other nodes in a shard on the network instead of each & every node. 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.

E-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 (quorum), transactions are committed on the network. Along with its unique gossip protocol, the consensus algorithm used on Shardeum will also auto-rotate the validator nodes on the network, making it extremely difficult for bad actors to attack the network.