Avalon: A Scalable and Secure Distributed Transaction Ledger Based on Proof-of-Market

Blockchain technology has gained widespread use. However, it faces several challenges including throughput, transaction delay, security, and decentralization. This paper presents the Avalon protocol based on a novel Proof-of-Market (PoM) consensus mechanism to address these issues. PoM is a type of Proof-of-Work (PoW) consensus that incorporates market-driven leader election and shifts PoW from mining pools to consumers based on transactions. The matching incentive mechanism makes PoM incentive compatible. PoM decouples the scalability and security of Bitcoin, which means that Avalon can optimize the capacity and interval of blocks without compromising other performance goals. Our analysis shows that Avalon can tolerate malicious nodes possessing up to 1/3 of the network's total computational power. Furthermore, the implementation of Avalon is similar to Bitcoin and is highly concise. We evaluate the performance of Avalon through a simulated network of over 1,000 nodes. Experimental results demonstrate that Avalon can achieve a throughput of 4,000 TPS (transactions per second), which is significantly better than state-of-the-art schemes ( 10x Bitcoin-NG, 5x ByzCoin, and 4x Algorand). Additionally, it has a transaction confirmation delay of up to 40 s, which is twice better than Bitcoin-NG and ByzCoin while experiencing only minimal blockchain splits and maintaining excellent decentralization.