Polkadot vs Cardano vs Venom: A Comprehensive Comparison For Blockchain Developers
As the blockchain technology landscape continues to evolve, we have witnessed the emergence of blockchain networks that bring new functionality and features into the space, building on the giants of the industry, such as Bitcoin and Ethereum.
In this comparison, we will look closer at Polkadot, Cardano, and Venom and delve into their unique advantages and disadvantages. In addition, we will explore their consensus mechanisms, scalability solutions, decentralization levels, and the number of projects built on their platforms. By understanding the similarities and differences between these blockchain networks, we can gain insights into their potential use cases and implications for the future of the blockchain industry.
When evaluating blockchain platforms, understanding the underlying technology is crucial. In this section, we will comprehensively compare the technology used by Polkadot, Cardano, and Venom, exploring their unique features, protocols, and capabilities to gain insights into their technical prowess and potential use cases.
Polkadot is a multi-chain blockchain platform that aims to connect multiple blockchains, allowing them to share data and assets in a secure and scalable manner. The technology behind Polkadot is based on several key components that work together to enable its unique features.
Relay Chain: The Relay Chain is the main chain in Polkadot, which coordinates communication between different parachains (sub-chains) and maintains the overall network consensus. It is responsible for managing shared security and interoperability among the connected chains. The Relay Chain uses a consensus algorithm called Nominated Proof-of-Stake (NPoS) that involves nominators and validators to secure the network and validate transactions.
Parachains: Parachains are independent blockchains that run in parallel to the Relay Chain. Each parachain can have its own consensus mechanism, governance, and token economy, allowing developers to customize their blockchain according to their specific needs. Parachains can connect to the Relay Chain through a slot auction mechanism, where they bid for slots to become part of the Polkadot network.
Bridges: Bridges are connectors allowing Polkadot to interoperate with other blockchains, including those not built on Polkadot. Bridges enable the transfer of assets and data between different blockchains, facilitating cross-chain communication and interoperability.
XCMP (Cross-Chain Message Passing): XCMP is the communication protocol used by Polkadot to enable cross-chain transactions and data transfer. It allows parachains to send messages to each other and to the Relay Chain, facilitating interoperability between different chains.
Polkadot Runtime Environment (PRE): The PRE is a framework that allows developers to build parachains on Polkadot. It provides a sandboxed environment for developers to write custom logic in different programming languages, such as Rust or WebAssembly (Wasm), and deploy it as a parachain on Polkadot.
Polkadot Governance: Polkadot has a decentralized governance model that allows token holders to participate in the decision-making process of the network. This includes voting on proposed upgrades, parameter changes, and the addition of new parachains to the network.
Cardano is a blockchain platform that aims to provide a secure, scalable, and decentralized environment for building decentralized applications (dApps) and executing smart contracts. The technology behind Cardano consists of several key components that work together to enable its unique features.
Cardano Settlement Layer (CSL): The CSL is the foundational layer of Cardano, responsible for handling transactions and maintaining the ledger. It uses a consensus algorithm called Ouroboros, which is a proof-of-stake (PoS) protocol that ensures the security and integrity of the blockchain. Ouroboros is based on rigorous cryptographic research and offers provable security guarantees.
Cardano Computation Layer (CCL): The CCL is the layer where smart contracts are executed on Cardano. It uses a unique approach called the Extended UTXO (Unspent Transaction Output) model, which combines the security of the CSL with the flexibility of the account-based model used in other blockchains. As a result, the Extended UTXO model allows complex smart contracts to be executed efficiently and securely.
Cardano Improvement Proposals (CIPs): Cardano has a formalized governance process through which stakeholders can propose and vote on changes to the protocol. These proposals are known as Cardano Improvement Proposals (CIPs) and are designed to ensure that the network can evolve and adapt over time in a decentralized manner.
Cardano Virtual Machine (CVM): The CVM is a unique feature of Cardano that allows developers to write smart contracts in different programming languages. Initially, Cardano supports Plutus, which is a domain-specific language (DSL) for writing smart contracts in Haskell. However, Cardano plans to support additional programming languages in the future, making it more accessible to developers with different language preferences.
Cardano Treasury: Cardano has a built-in treasury system that collects a portion of transaction fees and distributes it to fund ecosystem development, project proposals, and community initiatives. This self-sustaining treasury is managed through the Cardano governance process, allowing stakeholders to have a say in the allocation of funds.
Proof-of-Stake (PoS) Consensus: Cardano uses a PoS consensus algorithm, specifically Ouroboros, which allows ADA holders to participate in block validation and earn rewards by staking their tokens. PoS is energy-efficient compared to proof-of-work (PoW) used in some other blockchains, making Cardano more environmentally friendly.
The Venom blockchain uses sharding technology to process smart contracts concurrently in smaller "shards" with shared datasets among "shard validators." The platform also uses a Proof-of-Stake (PoS) consensus mechanism to secure the network.
Dynamic Sharding Protocol: The Venom blockchain utilizes sharding to concurrently process smart contracts in smaller "shards" with shared datasets among "shard validators." The Dynamic Sharding Protocol in Venom enables the network to adapt to changing loads by regulating shard quantity and size.
Shardchain: A shardchain is a reduced portion of the blockchain state responsible for a specific subset of accounts. Initially, a single set of validators process all transactions, but as transaction volume increases, the shardchain may be divided into multiple shardchains to distribute the load.
Split Events: The Venom blockchain employs a split event that is announced in advance in the headers of the corresponding shardchain and masterchain blocks. If shardchain blocks are at least 90% full for a configurable period of time (e.g., 100 seconds), the split occurs.
A subset of validators is selected to execute transactions for a specific range of addresses in the shardchain, and this subset is rotated. When a shard is split into two, additional validators are chosen to maintain performance and security. This enables efficient resource utilization and concurrent transaction processing while ensuring security.
Merge Events: The Merge event in Venom blockchain is triggered when the sum of sizes of sibling shardchains stays below 60% of the maximal block size for 100 seconds. Validators then produce a "want merge" flag, signaling the two shardchains to merge.
Validators commit a "merge commit" flag in the headers of their respective shardchains and stop creating new blocks in separate shardchains. Combined blocks and transactions are used to create a new state for the merged shardchain, reducing the number of shardchains, improving efficiency, and reducing costs.
Masterchain: The masterchain is the secure backbone of Venom blockchain, benefiting all connected workchains. Validators with large stakes generate new masterchain blocks, while other validators create shardchain blocks.
The masterchain facilitates coordination among workchains, maintains network configuration, and stores shard configuration and latest block hashes. Shardchains generate blocks simultaneously, and the masterchain block is generated slightly later to include hashes of shardchain blocks for finalization.
Basechain: Venom is made up of two networks: the Masterchain and the Basechain. The Basechain is the initial layer-1 workchain for end users, enabling dApps and acting as a platform for smart contract execution. For smart contract execution, both networks use the Threaded Virtual Machine (TVM), with the Basechain having cheaper storage and execution expenses than the Masterchain.
Consensus mechanisms are vital for the security, scalability, and efficiency of blockchain networks, and popular platforms like Polkadot, Cardano, and Venom have unique approaches to achieving consensus.
In this section, we will compare the consensus mechanisms used by these blockchains to understand how they operate.
Polkadot's consensus mechanism, known as Nominated Proof-of-Stake (NPoS), is designed to achieve consensus among the parachains (multiple blockchains) in the Polkadot network. NPoS combines elements of both Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS) to ensure the security and integrity of the network.
In NPoS, stakeholders, also known as "nominators," participate in the consensus process by selecting a fixed number of validators through a staking process. Nominators lock up their DOT (the native cryptocurrency of Polkadot) as collateral in a process called "nominating." Validators, on the other hand, are responsible for producing blocks and validating transactions.
The validators in Polkadot are elected in a decentralized manner through a voting process called "phragmén," where nominators have the ability to change their nominations at any time. The top validators with the most nominations are selected to participate in block production.
This ensures that the consensus process is dynamic and can adapt to changes in the network.
Once the validators are elected, they work together in a relay chain to finalize transactions and achieve consensus among the parachains. The relay chain serves as the main chain in Polkadot and is responsible for coordinating communication and consensus among the parachains.
In addition to nominators and validators, Polkadot also includes "fishermen," who monitor the network for any malicious behavior. Fishermen can challenge the actions of validators, and if a challenge is successful, the nominated DOT of the challenged validator may be slashed, reducing their staking rewards.
The NPoS consensus mechanism in Polkadot aims to achieve high security, scalability, and decentralization by combining the benefits of PoS and DPoS. It allows stakeholders to participate in block production and decision-making while ensuring the network's overall integrity and stability.
Cardano's consensus mechanism is called Ouroboros, which is a proof-of-stake (PoS) protocol designed to achieve consensus among nodes in the Cardano blockchain. Ouroboros ensures that transactions are validated, added to the blockchain, and secured without the need for resource-intensive mining, as in proof-of-work (PoW) protocols.
Cardano's Ouroboros PoS protocol is based on a system of epochs, slots, and epochs, where epochs are divided into slots, and each slot has a designated slot leader. Slot leaders are responsible for producing blocks in their assigned slots and validating transactions within those blocks.
The selection of slot leaders is determined through a randomized process called a "lottery," where stakeholders, also known as "ADA" holders, participate by staking their ADA (the native cryptocurrency of Cardano) as collateral. The more ADA a stakeholder holds, the higher their chances of being selected as a slot leader.
Cardano also employs a concept called "decentralized block production" (DBP), where the slot leaders for each epoch are selected in advance, allowing them to prepare and validate transactions efficiently. This helps to achieve high transaction throughput and low transaction confirmation times.
To ensure security and prevent malicious behavior, Cardano's Ouroboros PoS protocol also includes a "coin-age" mechanism, which requires stakeholders to "age" their ADA holdings before they can participate in the lottery. This discourages frequent stakeholder behavior changes and promotes long-term commitment to the network.
Moreover, Cardano's Ouroboros PoS protocol also allows for the delegation of stake, which means that ADA holders can delegate their stake to a trusted stake pool to represent them in block production and transaction validation. This allows for participation in the consensus process even for ADA holders with a smaller stake, promoting decentralization and inclusivity.
In summary, Cardano's Ouroboros consensus mechanism is a PoS protocol that relies on epochs, slots, and slot leaders to achieve consensus among nodes in the blockchain. Furthermore, it utilizes a lottery-based system with stake delegation and coin-age mechanism to ensure network security, efficiency, and decentralization.
Venom's blockchain employs the Proof of Stake (PoS) consensus technique in combination with the Byzantine fault-tolerant (BFT) algorithm to guarantee that validators can agree on a common set of rules.
The validator protects the network's safety by staking its VENOM coins and consenting to participate in consensus with other validators.
The validator guarantees the network's security by staking Venom tokens and participating in consensus rounds with other validators. In addition, each validator is responsible for submitting candidate blocks and voting on those presented by other validators.
Due to delegated staking pools, users with a modest VENOM stake may participate in the validation process. In addition, network users may utilise this mechanism to nominate other users or institutions to serve as validators.
Token holders may give more weight to validators who have earned more token stakes during the consensus voting process. In addition, token holders may vote for new validators by allocating their stake to certain applicants for the position. This helps to ensure that the validator set appropriately represents the requirements and objectives of the whole community.
There are three primary sorts of validator sets:
- Overall validator set: A list of all validators who were chosen to participate in the validation process, sorted by weight.
- The Masterchain validator set: We choose the group with the largest cumulative stake from the pool of available validators.
- The Shardchain validator set: The block processing of each shard chain is overseen by a subset of validators chosen from the whole validator pool.
To prevent a single party from monopolizing consensus, the protocol employs a round-robin role transfer structure in which validators take turns producing blocks. Each shard utilizes its own set of validators to operate the consensus mechanism.
Each protocol round has its own set of validator nodes responsible for proposing, validating, and committing blocks. Before a proposed block can be permanently added to the distributed ledger, two-thirds of the network's validator nodes must agree on it. If the proposed block is not accepted after a specific length of time, it is passed over, and the next round begins.
There are two types of consensus algorithms: those that allow forks (the concurrent development of several chains) and those that do not. As a result, a consensus may be either probabilistically or deterministically definitive.
Once a transaction is committed in a block and uploaded to the blockchain, it is considered final and cannot be reversed; this is known as "deterministic finality." This ensures that once a transaction is recorded on the blockchain, it cannot be altered, which is critical for the network's security and integrity. A transaction, for example, is only considered final in a probabilistic sense in the Bitcoin context. The risk of the transaction being reversed decreases as more blocks are added to the chain after the transaction.
The Venom Consensus Protocol stands out among algorithms with deterministic finality. It ensures that the transaction's commitment phase is legally binding. Forks are very improbable when utilizing a BFT since a fork requires inappropriate conduct on the side of the majority of validators.
Scalability refers to a blockchain's ability to handle increasing transaction volumes without sacrificing speed, efficiency, and security. In this section, we will look at how Polkadot, Cardano, and Venom enable their networks to be scalable and efficient.
Polkadot employs a relay chain, also known as the Polkadot main chain, which serves as the central hub connecting multiple parachains (individual blockchains). The relay chain coordinates the consensus and communication between parachains, while the parachains can operate independently and process their own transactions.
This sharded architecture allows Polkadot to achieve horizontal scalability, where each parachain can process transactions in parallel, significantly increasing the overall transaction capacity of the network. Furthermore, as new parachains can be added to the Polkadot network without disrupting the existing ones, it enables seamless scalability without sacrificing security or decentralization.
Polkadot also employs a unique consensus mechanism called Nominated Proof-of-Stake (NPoS), which involves a set of validators selected by token holders to secure the relay chain. This consensus mechanism is designed to be efficient and scalable, allowing for fast block finality and reducing the overhead associated with traditional Proof-of-Work (PoW) consensus mechanisms.
In addition, Polkadot's interoperability feature also allows different parachains to communicate and share data through the relay chain, enabling efficient data exchange and collaboration between blockchains. This enables developers to build decentralized applications (dApps) that can leverage the functionalities of multiple parachains, further enhancing the scalability and versatility of the Polkadot ecosystem.
Overall, Polkadot's sharded architecture, Nominated Proof-of-Stake consensus mechanism, and interoperability features are designed to provide scalability to the network, allowing for high transaction throughput and efficient communication between different blockchains it a promising solution for building scalable and interoperable blockchain applications.
Cardano's layered architecture consists of two main layers: the Cardano Settlement Layer (CSL) and the Cardano Computation Layer (CCL). The CSL handles the settlement of transactions and is designed to be simple and efficient, while the CCL is responsible for running smart contracts and supporting decentralized applications (dApps). This layered approach allows for separate transaction settlement and computation processing, enabling efficient network scaling.
Cardano's consensus mechanism, called Ouroboros, is based on Proof-of-Stake (PoS) and is designed to be scalable and secure. Ouroboros divides time into epochs, and within each epoch, slot leaders are randomly selected to propose blocks and validate transactions. This allows for parallel processing of transactions, making Cardano more scalable compared to traditional PoW-based blockchains.
Cardano also employs a unique approach called "Hydra," which aims to further enhance scalability by enabling off-chain processing. Hydra allows for the creation of multiple "heads" or parallel processing channels, which can handle transactions independently and in parallel with the main blockchain. This can significantly increase the transaction throughput of the Cardano network.
Furthermore, Cardano has a research-driven approach to development, focusing on formal methods and peer-reviewed research to ensure the security and scalability of the platform. The Cardano team actively engages in ongoing research and development to continually improve the scalability and performance of the blockchain.
Overall, Cardano's layered architecture, Ouroboros consensus mechanism, and Hydra off-chain processing approach are designed to provide scalability to the network, enabling high transaction throughput and efficient processing of transactions and smart contracts, making it a promising solution for building scalable blockchain applications.
The Venom blockchain employs sharding to partition the processing of smart contracts into smaller units, referred to as "shards," that are subsequently executed concurrently by distinct validator groups. In contrast to database sharding, which involves the partitioning and disseminating data across numerous machines, computation sharding entails the retention of a shared dataset among all "shard validators," who are tasked with executing distinct threads of the computation.
The Venom blockchain incorporates the Dynamic Sharding Protocol as a pivotal characteristic, which serves as a resolution to facilitate the network in adapting to the prevailing load by dynamically regulating the quantity and dimensions of shards.
A shardchain refers to a reduced portion of a blockchain state that is solely accountable for a specific subset of accounts, as defined by a binary prefix. A set of validators are assigned to authenticate each range, with the responsibility of processing a distinct subset of transactions solely for that particular range.
At the outset, a singular set of validators affiliated with a shardchain is responsible for processing all transactions. As the volume of transactions escalates and the shardchain experiences an excessive burden, the network initiates a division process, resulting in the bifurcation of the shardchain into two distinct shardchains. If a shardchain experiences a high load, it may be subdivided until the load is adequately distributed.
In the event of a reduced network load, the network can initiate a "merge event" whereby the shardchains are consolidated into a singular shardchain.
In conclusion, Polkadot, Cardano, and Venom are three prominent blockchains offering unique approaches and innovations to decentralized technology. We have explored their respective technologies, consensus mechanisms, scalability solutions, interoperability, governance models, and more through our detailed comparison. Furthermore, each blockchain has strengths and limitations, making it suitable for different use cases and applications.
Polkadot stands out with its vision of a multi-chain network connected through parachains, offering interoperability and scalability. Cardano's ambitious proof-of-stake (PoS) consensus mechanism and emphasis on academic research showcase its commitment to scientific rigor and robustness. Meanwhile, Venom's Dynamic Sharding feature promises faster and more efficient transactions for users.
It's worth noting that the blockchain space is dynamic and rapidly changing, with new technologies, protocols, and projects constantly emerging. Therefore, conducting thorough research and staying up-to-date with the latest developments is crucial to make informed decisions in this ever-evolving landscape.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.