The Best Consensus Algorithm for Enterprise Blockchain

Blockchain can be defined as a decentralized network technology composed of numerous nodes. In a blockchain environment, it is important that all participating nodes save data like transactions consistently; otherwise, data crashes among nodes can yield data disorder. Thus, consensus algorithms, which are made to prevent crashes, are the core technology of blockchain. The role of consensus algorithms is to make all data on the blockchain be saved identically on all participating nodes. In other words, they help nodes agree on which data to save. A professor at the University of Fribourg, Andreas Meier, mentioned in his paper that “blockchain = consensus algorithms + decentralized environment.” This sentence alone demonstrates the importance of consensus algorithms in the blockchain.


PoS: The Next Trend, But Not for Enterprises

Proof of Work: The First-Generation Consensus Algorithm

What are some examples of consensus algorithms? The most familiar is Proof of Work (PoW), which is also known as mining. Those who win over computing power earn the right to generate a block.

Most blockchains of the initial Bitcoin era chose PoW as their consensus algorithms; first-generation Ethereum also uses PoW. However, as mining the blockchain became more competitive in 2017, the excessive use of electronics has been pointed out as a culprit of environmental destruction. The anti-environment feature of PoW led to an increasing number of skeptics. The skeptics also criticized the extreme use of physical assets for digital assets. Thus, a new type of consensus algorithm, Proof of Stake (PoS), has gained a spotlight.

Proof of Stake: Consensus Algorithm by Staking

Miners of PoS, unlike those of PoW, compete by staking tokens instead of computing power. In other words, miners in PoS gain more rights to generate blocks if they staked a larger amount for a longer period.

PoS has largely two advantages. The first is fairness. Anyone with tokens can try to create a block, which is fairer than PoW which requires expensive and fancy computing power equipment.

The second is that no cost is needed to generate blocks (costless block generation). To mine in PoW environment, you need to pay for electricity. The only cost needed for PoS is, on the other hand, the opportunity cost for providing liquidity of that token or coin.

Due to two powerful strengths, public blockchains often use PoS. Solana, Polygon, and 2nd generation Ethereum have all implemented PoS. However, PoS-based blockchains are not suitable for enterprises for remarkable drawbacks.

Three Reasons PoS Is Not for Enterprise

The first problem comes with initial coin distribution. In a PoS environment, winners might take all. The strength of PoS is that anyone with tokens can participate in block generation. However, a chance to participate does not guarantee a right to generate a block. The staking amount is positively correlated with the chance to win the block generation. Initial miners who invested a large amount earn more rights to generate blocks, thus more rewards and additional tokens to stake. Eventually, the rights to generate blocks are distributed unevenly. PoS is then no longer fair. For example, out of 1,700 miners of Solana, the top 16 miners take up approximately 34% of all staking. Very few miners are generating most blocks.

The second is costless simulation. One of the strengths of PoS is cost – only the opportunity cost is spent. However, the low cost makes PoS vulnerable to malicious attempts to generate wrong blocks. The PoS-based blockchains are trying to prevent such attempts by a penalty policy – confiscating all staked tokens of malicious miners.

The last problem is uncertified block miners. The malicious attempts as above happen because the miners are not certified. Miners might not meet their obligations to generate blocks. This is crucial for enterprises that need to provide constant credibility to the customers. The assumption of enterprises is that their service will not be interrupted. In contrast, public blockchains admit the possibility of interruption and deal with a problem afterward. Last year and this January, for instance, Solana was interrupted a few times.

Luniverse with PoA Consensus Algorithm


Then what should be a consensus algorithm for enterprises? Proof of authority (PoA) is an appropriate option. Credible institutions related to the blockchain participate in generating blocks in PoA. PoA complements the drawbacks of PoS.

First, all participants can equally receive the right to generate blocks because authorities generate them. PoA is not a competition-based mining system, unlike PoW or PoS. However, participants with authory generate blocks only with credibility. Thus, there is no winner to take all.

Second, since blockchain miners are credible institutions, PoA is almost free from malicious attacking attempts. There is little chance that a block goes wrong because credibility has been confirmed at the participating stage. PoS, which does not confirm participants, is also open to hackers, hampering the governance credibility. However, the blocks of PoA are created only by trustworthy participants, granting credibility to the governance.

Considering such strengths, Lambda256 is using PoA as a consensus algorithm of Luniverse. The participants of Luniverse build their own chains to earn authority, so that even the enterprise services can apply blockchain.

Luniverse Enterprise Blockchain

Solution Designed for Enterprise

Applying blockchain to existing or a new business requires a stable blockchain environment. For enterprises, a blockchain service needs to be both stable and flexible. Lambda256 will provide anything you are seeking for in the blockchain industry.

Curious about Luniverse enterprise solution? Contact us at for a meeting.

Webinar Recap: Luniverse 2022 NFT Demo Day

On February 25th, Luniverse team held an NFT webinar on the official Luniverse YouTube channel. Despite the webinar’s rich content, the global fans of Luniverse could not take advantage of it because of a language barrier. So, we will provide a summary of each of the four sections of the webinar for those who missed it.

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NFT, the Word to Be Gone in 2022

One of the most famous English dictionaries, Collins, nominated NFT as the “2021 word of the year.” It seems like NFT comes to mind before Bitcoin when explaining blockchain technology. However, the word NFT may be gone in 2022, and here is why.

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Blockchain 2022: This Is What CEO of Lambda256 Foresees

With the beginning of 2022, the CEO of Lambda256 talks about his insights to Blockchain and the role of Luniverse. 

Jay Park, CEO of Lambda256




Back in 2007, people talked a lot about Web 2.0.. Ajax – an asynchronous communication method with passive, static, and full web browser capability – was the core technology that enabled Web 2.0. By implementing a desktop S/W-level dynamic experience on a web browser using Ajax, “Transition to the web” has achieved. These changes were led by web office, Thinkfree, which could replace the MS office. Considering that both Microsoft and Google offices are cloud-based web offices, the web has evolved to 2.0 over the past 20 years. 


Recently, people are talking about Web 3.0. Let aside the different definitions of Web 3.0, what matters the most is the financial flows. The new technology and market growth are driven by the inflows of money and people. Currently, investment funds and capitals are increasing in the technology companies that deal with Blockchain, NFT, DeFi, and Metaverse. This is why Web 3.0 has become a new mega-trend based on these technologies. The arguments on Web 3.0 among Andreesen Horowitz, Elon Musk, and Jack Dorsey are interesting because similar arguments were common back in the Web 2.0 era. However, market leaders such as Google and Amazon eventually emerged from the massive inflow of funds. The Series B investment on Lambda256 – about $60 million – in just two months clearly shows a great interest in Web 3.0.

Lambda256 believes Web 3.0 can make the real world transition to web. People have created a world where most content and services in the real world are connected on the web; one of the very few exceptions is the digitization of assets. When I was in Samsung Pay development project, my team sought to bring the wallet-based payment experience to mobile. People at that time were already used to digital payments with credit cards, so our payment service product successfully brought about the mass adoption of the mobile payment. But another significant problem remained: how can we convert the fiat currency into digital assets? A simple answer was to issue loyalty points backed by the fiat currency deposit. However, it had limitations because it was not reliable, scalable, or manageable enough. The only answer, I believe, is blockchain-based digital assets. The tokenization technology of blockchain grants various economic models via digitalizing diverse forms of assets and connecting each of them through web. Linking traditional assets to service&content-based web. This is what Lambda256 expects from Web 3.0. 

There are two choices to issue and link assets on Web 3.0. One is the private blockchain model meeting the current compliance and regulations, and the other is the decentralized blockchain model which brings the disruptive innovation. There’s no compromise because the governments equate decentralization and illegality. Thus, they control decentralized projects with regulations or taxes.

All virtual asset service providers with the private blockchain business model must comply with government regulations. Even in South Korea, all virtual asset companies must obtain ISMS certification and comply with the Travel Rule from March, 2022. For example, Travel Rule states that withdrawal from centralized exchanges to decentralized wallets such as Metamask that do not comply with the rule is prohibited. In other words, there would be a border between the centralized and decentralized wallets.

The Regulatory-based Blockchain Technology Will Be Important For the Private Blockchain Services.

Existing requirements for the traditional financial services, such as KYC/AML, Travel Rule, and fraud detection system are also required for virtual asset services. Therefore, companies must comply with these regulatory demands when conducting various virtual asset-based businesses such as crypto custody service, and NFT trade platform. Ironically, the virtual asset regulation market might grow according to this trend. For example, VerifyVASP, a Travel Rule service developed by Lambda256, is already deployed to +30 VASPs, and Chainalysis is growing rapidly by providing anti-money laundering (AML) solutions.   The decentralized blockchain businesses are growing rapidly, thanks to its infinite competition and enlarging liquidity due to various ideas becoming protocols. 

Ethereum Becomes Popular But with Slower Speed, While Layer 2 Solutions Will Increase. 

Ethereum 2.0, the most popular public chain, will take a few years to be developed due to its slow speed; nevertheless, it will continue to develop as a platform for issuing trust-based asset contracts, and its asset volume will increase as well. Therefore, roll-up-based layer 2 chain technologies such as bridge technology, optimistic roll-up, and zero knowledge certification (zk) that peg ERC20 and ERC721 assets issued on Ethereum into side chains will grow significantly. The optimistic rollup solutions include Optimism and Arbitrum, and zero-knowledge (zk) roll-up includes looping, zk swap V2, zk sink, AZTEC, Polygon, etc. In addition, Dapper Labs’ sidechain Rhonin and Lambda 256’s sidechain Luniverse are in the spotlight as they can utilize ERC20 and ERC721 assets through Layer 1 Bridge. Of course, layer 1 public chain projects such as Avalanche and Solana, which are compatible with Ethereum EVM, are also growing.

The Growth of the Tokenization of the Virtual Assets, Defi, NFT Will Continue

According to a report published by South Korean National Assembly’s Budget Office (NABO) in September 2021, the size of the virtual asset market has exceeded $1.68 trillion USD globally. According to DeFi Llama, a DeFi dashboard, the total value of cryptocurrency locked (TVL) in the DeFi protocols as of the end of 2021 is $245.2 billion, approximately. NFT market, which has been surging recently, is estimated to be at least about $26.9 billion in 2022, according to an analysis by Chainalysis. Even now, various types of virtual assets, NFT, and DeFi protocols are being created around the world, and the scale continues to increase accordingly. Plus, these new digital assets are not centralized service operations like Google or Naver, but are operated in the services with a new community-type governance models such as DAO(decentralized autonomous organization), in which people with digital assets participate and operate services.

Blockchain as a Service (BaaS) with Easy and Productive Environment will grow rapidly 

Technically speaking, current virtual assets consist of ERC20 tokens, ERC721 NFTs, and smart contracts written in languages such as solidity using them. Clearly, a development environment with high productivity to build contracts and DApps is necessary. Currently, among the most prevalent include Web3.js, Truffle, Ganache, and HardHat, but their environments are far below expectation. Developers who are used to the existing environments like Java, C++, IDE will encounter a lot of difficulties in solving debugging, calculating the execution cost (gas fee), and managing security defects when developing smart contracts. In particular, the nature of blockchain, such as nonce management of large-capacity transactions, data inconsistencies between nodes, and pool-based transaction processing method, hampers developing stable services. 

To solve these difficulties, blockchain service solutions like Luniverse provide a stable chain management and productive development environment. For example, Luniverse lets its users create a sidechain that can be effortlessly connected to Ethereum nodes or Ethereum, develop and distribute contracts with ease, and make use of various utility services necessary for contract development. In addition, security defects can be detected and solved through smart contract audit services such as Odin of Given that losing a large amount of assets due to a small mistake in smart contract code is not uncommon, you will see how important and helpful this development environment is.

Beginning January 2022, Lambda256 operates the next-generation Luniverse Mainnet to activate the Web 3.0 DApp services. In order to accelerate the Web 3.0 services, Luniverse Mainnet enables transferring virtual assets in different types of Layer1s to Layer2 Sidechains, developing and operating NFT, Defi, and real life DApp services through high-performance transactions without gas costs. In particular, it provides an environment where high-level blockchain services can be easily developed by providing high productivity development and operation tools. For example, an independent consortium Mainnet with various business partners can be established and operated on Luniverse. The goal of Lambda256 has always been to bring blockchain into real world and develop daily services via DApp, so it has been supporting the development of various DApp services based on Luniverse BaaS so far. Currently, some of the most active DApp services – ZikTok, M.ilk, Berry, Cherry, Aha, and Gluwa, for instance – are based on Luniverse, contributing to the world of Web 3.0 from their very beginning. In 2022, we hope more global projects inaugurate the era of Web 3.0 via next Luniverse Mainnet and BaaS services. 

If have any question about our service, contact us via

Dunamu and Lambda256 Partner to Launch Upbit NFT platform

Dunamu, the operator of Upbit, has launched “Upbit NFT” beta service. As a result, Dunamu owns the largest cryptocurrency and NFT exchange in Korea at this moment. It is significant that Dunamu started to cooperate with its subsidiary, Lambda256. 

Upbit announced on the 23rd of November that it has launched Upbit NFT beta. It offers two services – ‘Drops’ where users buy NFTs through English or Dutch auctions, and ‘Marketplace’ where users trade their NFTs. 

(Source=Upbit NFT official website)

On the date of the launch, the first piece of NFT art “Mirage Cat 3” by digital artist Jang Koal, was sold for more than 3.5 BTC or about $173,000. 

This notable launch of the Upbit NFT was achieved through Dunamu’s partnership with its subsidiary, Lambda256. Lambda 256 was separated from Dunamu in March 2019 and launched “Luniverse,” a Blockchain as a Service(BaaS), from May of the same year. However, for nearly three years since its establishment, it hasn’t worked in collaboration with Dunamu.

The partnership between the two companies began in June. Lambda 256 unveiled the NFT platform with NFT minting and trade functions. Upbit’s first NFT Airdrop event was proceeded with the announcement of the Luniverse NFT platform.


Earlier in February, Park Jae-hyun, CEO of Lambda 256, said on the interview with Paxnet News, “Blockchain is the best technology for tokenizing both tangible and intangible assets, such as stocks, bonds, and art pieces, so we plan to develop for the asset tokenization market as well.” Lambda256 has been preparing for the NFT minting/trade service since the beginning of the year.

Upbit held several rounds of NFT drops for its users earlier this year before the launch of Upbit NFT. It was a series of NFT collections in various industry verticals such as entertainment and sports, including Brave Girls, Mad Monster, South Korea’s table tennis legend, Jang Jae-ho, Olympic Heritage Digital Pin, Magumagu, Waste Tires, and Hanwha Eagles. All NFTs distributed by Dunamu to Upbit users were issued on the Luniverse chain. As a result, Lambda256 is expected to grow as Upbit NFT’s technology provider as Upbit NFT becomes the largest NFT exchange in South Korea.

The art pieces on Upbit NFT are currently only minted on Luniverse, and it does not support the withdrawals to Ethereum ERC-721 wallets unless it’s whitelisted separately.


Upbit team said, “At this moment, we only support the Luniverse protocol to provide NFT services, but we will also review and support other mainnet-based NFT protocols considering the wallet connection issues.”


(This article was originally appeared on Paxnet News