The solution to performance-related problems comes from the consensus algorithm provided by Tendermint (on which Baseledger is built). Tendermint, an algorithm for reaching consensus among known validator nodes, utilizes Byzantine Fault Tolerance, which means that it avoids limitations from which regular PoW/PoS consensus algorithms suffer performance-wise. From the Cosmos Network whitepaper :
Despite its strong guarantees, Tendermint provides exceptional performance. In benchmarks of 64 nodes distributed across 7 datacenters on 5 continents, on commodity cloud instances, Tendermint consensus can process thousands of transactions per second, with commit latencies on the order of one to two seconds. Notably, performance of well over a thousand transactions per second is maintained even in harsh adversarial conditions, with validators crashing or broadcasting maliciously crafted votes.”
The performance of Baseledger comes from two facts. Firstly, the validator nodes in the network are known, so there is no need to have additional algorithm checks in place to make sure that the behavior is not malicious. Validators can join the network based on a predefined process which is defined outside of the technical implementation, and are accountable for their actions on the network. In the case of Baseledger, it is the job of the governing body to set up a process through which an entity can become a validator, and through which that entity commits to a legal framework that ensures accountability and security of the network. Additionally, Baseledger utilizes proof of stake on top of the Tendermint BFT algorithm, further increasing the security of the network by having an option to financially penalize malicious behavior of validator nodes.
Secondly, since the validators are known, the network does not need a large number of validators to keep it safe, as is the case with public blockchain. For example, the Cosmos Network launched with a maximum of 100 validator nodes with plans to increase this number to not more than 300 in the next 10 years .This means that state can be quickly propagated through the network without fear of chain forks, further improving throughput while enabling transaction finality times on the order of one or two seconds .
The Baseledger consensus algorithm solves in multiple ways another problem related to performance: performance predictability or the Noisy Neighbor problem. Firstly, the Tendermint BFT proof of stake algorithm greatly increases throughput thus increasing the level of activity needed to affect the performance of the network. Secondly, since every participant's identity is known, malicious behavior is discouraged. Thirdly, the governing body ensures SLAs related to uptime and performance are fulfilled, because operators (nodes) are legally bound to these agreements.
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