Technology, Insights

A Comparative Analysis of the Openness of Proof-of-Stake Blockchains

Researchers at Klaytn Foundation have released a paper analyzing the openness of eleven Proof-of-Stake blockchains, identifying their various strengths and weaknesses, and proposing ways for public blockchains to increase their openness.

The eleven chains analyzed, in alphabetical order, are:

  1. Algorand
  2. Aptos
  3. Avalanche
  4. BNB Chain
  5. Celo
  6. Cosmos Hub
  7. Ethereum
  8. Near
  9. Solana
  10. Klaytn
  11. Polygon

Openness is similar to decentralization in the sense that they both revolve around blockchain network participation. However, while decentralization focuses on how evenly functions, control and information are distributed amongst participants on a blockchain network, openness is a measure of accessibility – whether anyone can join as a validator, create and verify blocks, how much each network participant can contribute, and how reliable a network could be maintained against potential security attacks. In this paper, it is suggested that openness could be measured based on the following five metrics:

  1. The number of validators
  2. The capital required for participation
  3. Capital concentration
  4. Operating costs
  5. Network stability from an economic perspective

Based on these metrics, our researchers found that among the permissionless chains analyzed, Algorand, Avalanche, Celo, and Solana demonstrate a high level of openness, while Cosmos Hub, Ethereum, and NEAR Protocol are moderately open.

Aptos and BNB Chain scored low in initial capital cost and decentralization, and their total scores were also relatively low. For Klaytn and Polygon, with the existing permissioned network setting, their current openness score does not mean much, even if it is later transitioned into a network architecture with a more permissionless setting from their current state, they could likely be less open and more work towards a permissionless setting would be expected, given their user experience focuses balancing the scalability and security for the sustainable development of their blockchain ecosystem.

Additionally, the openness of permissionless networks that require an extremely large initial capital is found to be not significantly different from permissioned networks.

For a permissioned blockchain such as Klaytn to transition into a successful permissionless network, the key factors are: 1) deciding whether consensus that is proportional to stake or number of validators is more suitable, 2) properly setting the number of validators, initial capital cost, and operating costs, and 3) determining the level of capital concentration and staking ratio to circulating supply to maintain network reliability.

To learn more about the analysis and our findings, please download the research paper here.