Introduction

MultiversX, a novel architecture which goes beyond state of the art by introducing a genuine state sharding scheme for practical scalability, eliminating energy and computational waste while ensuring distributed fairness through a Secure Proof of Stake (SPoS) consensus. Having a strong focus on security, MultiversX’ network is built to ensure resistance to known security problems like Sybil attack, Nothing at Stake attack and others. In an ecosystem that strives for interconnectivity, their solution for smart contracts offers an EVM-compliant engine to ensure interoperability by design. Ethereum Virtual Machine (EVM) is a crucial component of the Ethereum blockchain, serving as a decentralized and runtime environment where smart contracts are executed.

Cryptocurrency and smart contract platforms such as Bitcoin and Ethereum have sparked considerable interest and have become promising solutions for electronic payments, decentralized applications and potential digital stores of value. However, when compared to their centralized counterparts in key metrics, the current state of affairs suggests that present public blockchain iterations exhibit severe limitations, particularly with respect to scalability, hindering their main-stream adoption and delaying public use. In fact, it has proved extremely challenging to deal with the current engineering boundaries imposed by the trade-offs in the blockchain trilemma paradigm. Several solutions have been proposed, but few of them have shown significant and viable results.

Thus MultiversX was created as a complete rethinking of public blockchain infrastructure, specifically designed to be secure, efficient, scalable and interoperable. MultiversX’ main contribution rests on two cornerstone building blocks:

1. A genuine State Sharding approach: effectively partitioning the blockchain and account state into multiple shards, handled in parallel by different participating validators;

2. Secure Proof of Stake consensus mechanism: an improved variation of Proof of Stake (PoS) that ensures long term security and distributed fairness, while eliminating the need for energy intensive PoW algorithms.

What is Sharding in Blockchain Technology

Sharding in blockchain technology is a method of improving the scalability and performance of a blockchain network. It involves dividing the blockchain into smaller, more manageable parts called "shards." Each shard is like a mini-blockchain with its own set of transactions and smart contracts. By processing transactions in parallel across multiple shards, sharding aims to increase the overall throughput and capacity of the blockchain network, allowing it to handle more transactions and data while maintaining decentralization and security. This can significantly enhance the efficiency and speed of blockchain networks, making them more practical for widespread adoption in various applications.

Adaptive State Sharding

MultiversX proposes a dynamically adaptive sharding mechanism that enables shard computation and reorganizing based on necessity and the number of active network nodes. The reassignment of nodes in the shards at the beginning of each epoch is progressive and nondeterministic, inducing no temporary liveness penalties. Adaptive state sharding comes with additional challenges compared to the static model. One of the key-points resides in how shard-splitting and shard-merging is done to prevent overall latency penalties introduced by the synchronization/communication needs when the shard number changes. Latency, in this case, is the communication overhead required by nodes, in order to retrieve the new state, once their shard address space assignment has been modified.

MultiversX proposes a solution for this problem, but first some notions have to be defined: users and nodes. Users are external actors and can be identified by an unique account address; nodes are computers/devices in the MultiversX network that run our protocol.

MultiversX solves this challenge by:

1. Dividing the account address space in shards, using a binary tree which can be built with the sole requirement of knowing the exact number of shards in a certain epoch. Using this method, the accumulated latency is reduced and the network liveness is improved in two ways. First, thanks to the designed model, the dividing of the account address space is predetermined by hierarchy. Hence, there is no split overhead, meaning that one shard breaks into two shards, each of them keeping only one half of the previous address space in addition to the associated state. Second, the latency is reduced through the state redundancy mechanism, as the merge is prepared by retaining the state in the sibling nodes.

2. Introducing a technique of balancing the nodes in each shard, to achieve overall architecture equilibrium. This technique ensures a balanced workload and reward for each node in the network.

3. Designing a built-in mechanism for automatic transaction routing in the corresponding shards, considerably reduces latency as a result.

4. In order to achieve considerable improvements with respect to bootstrapping and storage, MultiversX makes use of a shard pruning mechanism. This ensures sustainability of our architecture even with a throughput of tens of thousands of transactions per second (TPS).

   
   

Secure Proof of Stake (SPoS)

Introduced here is a Secure Proof of Stake consensus mechanism, that expands on Algorand’s idea of a random selection mechanism, differentiating itself through the following aspects:

1. MultiversX introduces an improvement which reduces the latency allowing each node in the shard to determine the members of the consensus group (block proposer and validators) at the beginning of a round. This is possible

   because the randomization factor r is stored in every block and is created by the block proposer using a BLS signature on the previous.

2. The block proposer is the validator in the consensus group who’s hash of the public key and randomization factor is the smallest. In contrast to Algorand’s approach, where the random committee selection can take up to 12 seconds, in MultiversX the time necessary for random selection of the consensus group is considerably reduced (estimated under 100 ms) excluding network latency. Indeed, there is no communication requirement

   for this random selection process, which enables MultiversX to have a newly and randomly selected group that succeeds in committing a new block to the ledger in each round. The tradeoff for this enhancement relies on the premise that an adversary cannot adapt faster than the round’s time frame and can choose not to propose the block. A further improvement on the security of the randomness source, would be the use of verifiable delay functions (VDFs) in order to prevent any tampering possibilities of the randomness source until it is too late. Currently, the research in VDFs is still ongoing- there only a few working (and poorly tested) VDF implementations.

3. In addition to the stake factor generally used in PoS architectures as a sole decision input, MultiversX refines its consensus mechanism by adding an additional weight factor called rating. The node’s probability to be selected in the consensus group takes into consideration both stake and rating. The rating of a block proposer is recalculated at the end of each epoch, except in cases where slashing should occur, when the actual rating decrease is done instantly, adding another layer of security by promoting meritocracy.

4. A modified BLS multisignature scheme with 2 communication rounds is used by the consensus group for block signing.

5. MultiversX considers formal verification for the critical protocol implementations (e.g. SPoS consensus mechanism) in order to validate the correctness of our algorithms.

There are two main entities in MultiversX: users and nodes. Users, each holding a (finite) number of public / private (Pk/sk) key pairs (e.g. in one or multiple wallet apps), use the MultiversX network to deploy signed transactions for value transfers or smart contracts’ execution. They can be identified by one of their account addresses (derived from the public key). The nodes are represented by the devices that form the MultiversX network and can be passive or actively engaged in processing tasks. Eligible validators are active participants in MultiversX’ network. Specifically, they are responsible for running consensus, adding blocks, maintaining the state and being rewarded for their contribution. Each eligible validator can be uniquely identified by a public key constructed through a derivation of the address that staked the necessary amount and the node id.

Furthermore, the network is divided into smaller units called shards. An eligible validator is assigned to a shard based on an algorithm that keeps the nodes evenly distributed across shards, depending on the tree level. Each shard contains a randomly selected consensus group. Any block proposer is responsible to aggregate transactions into a new block. The

validators are responsible to either reject, or approve the proposed block, thereby validating it and committing it to the blockchain.

Intrinsic Token

MultiversX grants access to the usage of its network through intrinsic utility token called eGold, in short EGLD. All costs for processing transactions, running smart contracts and rewards for various contributions to the network will be paid in EGLD. References to fees, payments or balances are assumed to be in EGLD.

Future Research

The MultiversX team is constantly re-evaluating and improving their design, in an effort to make this one of the most compelling public blockchain architectures; solving scalability via adaptive state sharding, while maintaining security and high energy efficiency through a secure Proof of Stake consensus mechanism. Some of the next directions of improvement include:

1. Reinforcement learning: aim to increase the efficiency of the sharding process by allocating the frequently trading clients in the same shard to reduce the overall cost

2. AI supervision: create an AI supervisor that detects malicious behavioral patterns; it is still uncertain how this feature can be integrated in the protocol without disrupting the decentralization

3. Reliability as a consensus factor: the existing protocol weighs between stake and rating but we plan to add reliability, as a metric that should be computed in a distributed manner after applying a consensus protocol on previously submitted blocks from the very recent history

4. Cross-chain interoperability: implements and contribute to standards like those initiated by the Decentralized Identity Foundation or the Blockchain Interoperability Alliance

5. Privacy preserving transactions: Privacy preserving transactions is accomplished by zk-SNARK. Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) is a cryptographic technique that safeguards the identity of participants by allowing them to prove possession of certain information without revealing it. Additionally, zk-SNARK enables auditing without disclosing transaction details, making it useful for financial checks and data integrity verification. Overall, zk-SNARK preserves privacy while ensuring secure and confidential interactions in digital transactions and verifications.