Final Technical Report
ZC-1 seamlessly integrates Directed Acyclic Graph (DAG) ordering with Byzantine Fault Tolerance (BFT) checkpoints and Verifiable Random Function (VRF)-selected committees, further enhanced by AI-assisted rotation to ensure fairness and efficiency. The protocol delivers finality in under 2 seconds, targets scalability beyond 100,000 transactions per second (TPS), and enables seamless mobile participation through lightweight validation, data availability (DA) sampling, and delegated staking.
Designed with UK regulatory compliance in mind, it incorporates Environmental, Social, and Governance (ESG) incentives to promote sustainable and ethical network operations.
Sub-2-Second Finality: Achieve deterministic safety guarantees with rapid transaction confirmation.
100,000+ TPS Scale: Maintain performance without compromising network security or decentralization.
Mobile-First Access: Prioritize accessibility for iOS and Android devices with lightweight clients.
Ethereum Interoperability: Ensure compatibility and implement robust cross-chain bridges.
UK Regulatory Compliance: Align with FCA and GDPR standards for institutional adoption.
ESG Integration: Promote sustainability through ESG-linked staking rewards and transparency audits.
The architecture supports applications built on an Ethereum Virtual Machine (EVM)-compatible execution layer, with the core consensus mechanism blending DAG-based ordering and BFT finality. Complementary modules handle Governance & ESG, Interoperability, and Compliance.
Security & Privacy features include post-quantum (PQ) cryptography and zero-knowledge (ZK) proofs for enhanced protection. Networking & Storage manages efficient gossip protocols, erasure-coded data availability, dynamic pruning, sharding, and edge gateways to optimize data distribution and access.
Participants bond stake to join the network, with optional Know Your Customer (KYC) integration via trusted custodians for enhanced identity verification. Each consensus round generates a cryptographic seed, from which VRF selects a committee of K validators. A lightweight reputation system subtly biases proposer selection to favour reliable participants, promoting long-term network fairness.
Validators produce blocklets that reference at least N - f prior-round blocks (where N represents the total validator set size and f the Byzantine fault tolerance threshold). A deterministic reduction process extracts a consistent DAG cut, forming a batch candidate for validation and inclusion.
Finality is achieved through a two-phase voting mechanism: prevote followed by precommit. Once 2/3 or more of the stake-weighted votes are secured, the checkpoint is finalized, a receipt is broadcast, the state machine advances, and obsolete DAG sections are pruned for efficiency.
Transaction batches are encoded using Reed-Solomon codes into k + r shares, distributed across validators for redundant storage. Light clients verify availability by sampling m shares; any detected withholding prevents finality and incurs slashing penalties on the responsible proposers.
Mobile devices (e.g., smartphones) engage via lightweight operations like signature verification, DA sampling, and proof checks. For active staking or validation, users can delegate through edge gateways or participate in micro-committees.
Adaptive duty-cycling adjusts activity based on battery life and thermal limits. Finality receipts encapsulate VRF epoch data, aggregate signatures, and DA proofs for verifiable transparency.
| Parameter | Default | Notes |
|---|---|---|
| Validator set (n) | 400–1,200 | Stake-weighted selection with support for gradual validator churn |
| Committee size (K) | 64–256 | Dynamically selected via VRF per round |
| Fault tolerance (f) | < n/3 | Standard Byzantine fault tolerance bound |
| Batch size | 1–4 MB | Optimized with erasure coding for compact storage and transmission |
| Checkpoint interval | 250–500 ms | Balances latency and finality; adjustable based on network load |
| Gossip fan-out (g) | ≈ √n | Employs rotating peer sampling for efficient propagation |
| DA samples (m) | log(k + r) + δ | Ensures probability of undetected withholding is below 2⁻⁴⁰ |
| Slashing amount | 0.5–5% stake | Tiered penalties scaled by violation severity |
| Unbonding period | 14–21 days | Prevents long-range attacks by delaying stake withdrawal |
The protocol employs post-quantum signatures (e.g., Dilithium or Falcon) for future-proof security. zkSNARKs and zkSTARKs facilitate efficient verification. Selective-disclosure techniques enable privacy-preserving KYC attestations, allowing users to reveal only necessary information during audits or compliance checks.
The system assumes an adversary controlling less than 1/3 of the total stake, capable of delaying, withholding, equivocating, or censoring messages. Clients and gateways are treated as untrusted entities.
consensus/ConsensusLayer.py - Event loop, DAG ordering, checkpointing, votes, slashing hooks
consensus/messages.py - Blocklet, Checkpoint, Vote, FinalityReceipt message types
consensus/vrf.py - VRF sortition (replace dummy with production VRF)
consensus/storage.py - In-memory DAG + checkpoint stores
networking/ - Gossip protocols, discovery, sync, finality receipts
privacy/ - ZK verifiers; off-chain proving systems
governance/ - Delegation, referenda, parameter governance
interop/ - Bridge protocols (LC/ZK or threshold + slashing)
Simulated faults and edge cases in controlled environment
Limited to ≤200 validators for initial validation and testing
Scaling to ≥600 validators for real-world stress testing
while True:
seed = derive_seed_from_last_checkpoint()
committee = vrf_sortition(validators, seed, size=K)
if self in committee:
msg = build_blocklet(pending_txns, refs=dag.select_refs(N_minus_f))
msg.zk_attest = optional_zk_attestations(msg)
broadcast(msg)
dag.update(received_messages)
if dag.has_checkpoint_candidate():
cand = dag.best_checkpoint()
votes = bft_prevote_precommit(cand, threshold=two_thirds_stake)
if votes.commit:
finalize(cand)
emit_finality_receipt(cand)
prune_old_dag(cand)
rotate_reputation_scores()Transactions incorporate a base fee plus optional tip; validators earn tips alongside a portion of base-fee rebates, aiming for a 6–12% annual staking yield. Maximal Extractable Value (MEV) is mitigated through fair DAG ordering and encrypted mempool phases.
ESG integration offers staking multipliers or bonus token emissions for validators demonstrating sustainable practices, such as energy-efficient operations. Pseudonymous on-chain commitments are complemented by off-chain KYC through custodians for UK regulatory compliance.