A Fair and Scalable Consensus Algorithm for NFT-Based Decentralized Autonomous Organization for Digital Art

Abstract

Blockchain is an emerging technology that finds applications across various industries by providing secure transaction records that cannot be tampered with. It operates as a decentralized and open ledger, offering additional benefits such as traceability and immutability, which greatly contribute to its desirability. Two important blockchain applications include Non-Fungible Tokens (NFT) Marketplaces and Decentralized Autonomous Organizations (DAOs). NFTs are unique digital assets like artwork or music that can be bought and sold using cryptocurrency, ensuring both security and efficiency. On the other hand, DAOs are transparent organizations that make decentralized decisions. In our work, we have developed an integrated NFT marketplace and DAO that leverages NFT ownership to determine the weights of choices. The implementation is based on Ethereum ERC-721 tokens. However, the Proof of Stake (POS) consensus algorithm used in Ethereum 2.0 lacks fairness. To tackle this issue, we introduce the Delegated Reputation-based Proof of Elapsed Time consensus algorithm (DRPoET). Evaluations conducted on an Ethereum testbed demonstrate that our integrated DAO benefits from fair weights and improved transaction latency and fairness compared to the POS algorithm.