Consensus Layer

Key Considerations

  1. Network Topology

    1. Shows the type of interconnection between nodes (decentralized, hierarchical, centralized).

    2. HDAG

  2. Immutability and Failure Tolerance:

    1. aBFT (33% fault tolerance)

    2. Narwhal/Tusk/Bullshark (50% fault tolerance)

  3. Gossiping:

    1. Witness, different gossiping protocols using TCP/IP

  4. Consensus agreement:

    1. Nodes communicate between themselves to handle Byzantine failures.

HDAG - ABFT (consensus agnostic)

Top set of validator nodes approved by the governing network DAO validate transactions within a Directed Acyclic Graph(DAG) based structure rather than a traditional linear blockchain.

Network staking requirements for these nodes are adjusted over time. The initial staking requirement is to be set by the UmbrellaDAO and enumerated in $UMBRA (Umbrella Network Tokens).

Umbrella innovates upon Fantom's Lachesis consensus model created by Andre Cronje to offer aBFT consensus within our EVM environment.

HDAG - Narwhal/Tusk by Sui

Umbrella plans to continue to implement and upgrade on existing consensus models within DAG networks. We currently appreciate Sui's approach the most but as they're not live yet will launch with the proven aBFT consensus mechanism.

PoS

Bonds are equivalent to a capital expense in Proof of Work. A miner buys hardware and electricity and commits it to a single branch in a Proof of Work blockchain. A bond is a coin that the validator commits as collateral while they are validating transactions.

Slashing

The proposed solution to the nothing at stake problem in Proof of Stake systems. When proof of voting for a different branch is published, that branch can destroy the validator's bond. This is an economic incentive designed to discourage validators from confirming multiple branches. Slashing occurs when a validator votes for two separate sequences. A proof of malicious vote will remove the bonded coins from circulation and add them to the mining pool. A vote that includes a previous vote on a contending sequence is not eligible as proof of malicious voting. Instead of slashing the bonds, this vote removes the currently cast a vote on the contending sequence. The generator is expected to randomly generate an invalid state, which would trigger a fallback to Secondary

Super Majority

A super majority is ⅔ of the validators weighted by their bonds. A super-majority vote indicates that the network has reached a consensus, and at least ⅓ of the network would have had to vote maliciously for this branch to be invalid. This would put the economic cost of an attack at ⅓ of the market cap of the coin.

Proof of Relative Stake - PoS + DPoS + PoH + PoI + PoA

Delegated Proof of Stake (DPoS) is a staking model whereby validators put up a stake in the network’s native tokens to get a chance to validate transactions and create blocks. Technically, anyone with a minimum stake of the required tokens can become a validator, but the network would become sluggish if this were allowed. DPoS networks allow token holders to vote in a specified number of delegates to become validators. In the case of BSC and EOS, that number is 21 validators. Proof of Authority (PoA) as it applies to the Binance Smart Chain, represents a model in which validators are chosen or picked by a central party, in this case, Binance. The exchange vets all validators before they can be voted on by the delegators (token holders). Think of it like a validator KYC where Binance approves who gets to participate in block creation. Proof of History (PoH) is a sequence of computations that can provide a way to verify the passage of time between two events cryptographically. It uses a cryptographically secure function written so that output cannot be predicted from the input, and must be completely executed to generate the output. The Proof of Importance (PoI) mechanism is similar to the proof of stake algorithm, another technique involving showing the relations of parties to a transaction, but while there are similarities, proof of importance uses other various metrics to evaluate nodes. These metrics include net transfers, amount of vested currency, and activity clusters – in one sense, the development of proof of importance is intended to address loopholes and problems with proof of stake where hoarding or other behavior could result in a higher proof of stake score, but the proof of importance score with its more sophisticated measurements seeks to find better outcomes.

Now that we understand all of these various consensus mechanisms we can begin to break down Proof of Relative Stake.

Proof of Relative Stake (PoRS) is inspired by a combination of the aforementioned consensus algorithms. Let's go one by one. PoRS is a delegated system (DPoS) that allows users to stake their tokens with validators and allow them to vote on their behalf. Even though there can be an infinite number of validators, not *everyone* can actually be a validator due to the stringent requirements. This allows users to contribute to the security of the chain and receive proof of stake rewards without having to run any nodes themselves

Binance uses a centralized system called Proof of Authority to decide on the validators for a set amount of time. For Umbrella's case, we utilize what we call Proof of Decentralized Authority where the UmbrellaDAO is responsible for overseeing which nodes can be considered part of the Supernode validator set.

Lastly Proof of History and Proof of Importance were inspirations for using onchain history as a component that derives the final Proof of Relative Stake score. While we don't use the implementations, Solana and NEM created they did inspire us to prevent purchasing power from leading to chain control.

Proof of Relative Stake is a mechanism that utilizes the onchain history of interactions to create a relative stake score. This means that users who have high onchain value and history are weighted greater than users who only hold tokens.

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