Consensus mechanism design based on structured directed acyclic graphs

Capacity limit is a bottleneck for broader applications of blockchain systems. Scaling up capacity while preserving security and decentralization are major challenges in blockchain infrastructure design. In this paper, we design a proof of work-based mechanism by endowing directed acyclic graphs (DAG) with a novel structure so that peers can reach consensus at a large scale. At a high level, we break large blocks into smaller ones to improve utilization of broadcast network and embed a Nakamoto chain inside the DAG in a decent way to ensure security. We further exploit the DAG structure and design a mempool transaction assignment method. The method reduces the probability that a transaction is processed by multiple miners and hence improves processing efficiency. Without sacrificing security and decentralization, our design significant scales up capacity and also addresses important issues such as high latency and mining power concentration in existing blockchain systems.