Ethereum continues to be the blockchain DApp platform with the most brand equity. While rival platforms such as EOS and TRON are quickly catching up with Ethereum in terms of both monthly active users and volume, developers who are new to the industry are likely to be drawn to Ethereum over any other DApp platform.

On DGaming.com, we’ve written plenty about Ethereum and we’ve written plenty about its flaws. Ethereum is based on a Proof of Work consensus mechanism (PoW). This makes it slow and not easily scalable. Additionally, Ethereum is expensive. Users have to pay ‘gas’ for every transaction on the Ethereum blockchain.

For game developers, these disadvantages do not make Ethereum a tempting blockchain platform. After all, no one wants a game that forces their users to hand over a few cents every time they want to swing a sword or move their character in-game.

Still, some of the most successful DGames run on the Ethereum blockchain. Axie Infinity and Etheremon being two examples. While both games run on the Ethereum blockchain and rank in the top 10 of most popular DGames in the blockchain industry, it’s important to understand that they don’t entirely run on the Ethereum blockchain.

Axie Infinity only partially runs on the Ethereum blockchain

Both Axie Infinity and Etheremon use scaling solutions (Loom and Zilliqa, respectively) that allow them to have multiple thousands of gamers playing at the same time while also reducing or entirely offsetting the transaction fees that come with the Ethereum Mainnet.

The POA Network is another such solution that improves upon Ethereum. But it does so with a unique consensus mechanism that hasn’t been seen in the blockchain industry yet, and with bridging technology that could prove to be quite a game changer, in the most literal sense of the phrase.

What is the POA Network?

The POA Network brands itself as a public Ethereum sidechain for people who believe that ‘the Ethereum protocol must be cheap, fast, and scalable.’ It operates at three times the speed of Ethereum with significantly lower transaction costs. Most importantly, it uses a new consensus mechanism called Proof of Authority (POA).

All consensus mechanisms involve some type of value exchange and so also some type of risk if you want to mine and verify transactions on a blockchain. A Proof of Work consensus mechanism requires you to exchange your computing resources in return for mining rewards. A Proof of Stake (PoS) consensus mechanism, which is what most scaling solutions for Ethereum use, requires you to exchange your money in return for a certain amount of votes (more money, more votes).

Proof of Authority is different. There are currently 23 people who maintain the health, performance, and security of the POA blockchain. Different from PoW or PoS, these people are known individuals. They’ve exchanged their identity so they could operate the POA blockchain, in a model that’s called Identity at Stake.

The anonymity usually associated with blockchain technology has been removed from the equation for the validators of the POA blockchain. They must be willing to stake their identity and consequently their reputation in order to validate blocks. Additionally, each POA Network validator must be a public notary in their state of residence in good standing.

PoW is slow, doesn’t scale well and requires an enormous amount of electricity. PoS (and DPoS) removes these problems, but it relies on the assumption that people who have a certain amount of money invested in a platform will act in the best interests of that platform. The problem here, however, is that the size of the invested stake will be valued differently depending on the total wealth of the individual.

A stake of $1 million in a PoS platform might yield a considerable amount of votes and might have most people believe that the person who invested that money will act in the platform’s best interests. But if that person were a billionaire looking to disrupt the network, that $1 million might be worth the price of disruption. That’s a critical vulnerability in the PoS consensus mechanism.

POA moves around that problem by placing that person’s identity and reputation at stake. Additionally, all decisions made by the validators are publicly recorded on the blockchain for everyone to see. There is no off-chain governance that’s not visible to the public. This is how the POA Network wants to discourage people from corrupting their blockchain.

Validators are responsible for adding or removing validators, updating governance contracts, hard fork decisions, and for operating the nodes that run the POA blockchain. All these discussions are done through some of the many DApps available on the POA blockchain.

The POA ICO and POA Token

POA had its ICO in November 2017, selling 252.46 million tokens with a hard cap of $12.5 million. The proceeds were distributed 75% for research and development, 8% for operations, 10% for marketing, 4.5% for legal, and 2.5% as a token sale fee.

Not the slide you want to be on.

On CoinMarketCap, POA ranks #311 with a market cap of slightly under six million USD. The token has been hit as hard by the crypto winter as pretty much any other token, with its price dropping from an all-time high of $0.882 down to what is $0.026 today.

What’s POA’s Bridging Technology?

At the beginning of this article, I spoke about POA’s bridging technology. This is where I believe the project really shines. POA’s bridging technology is called POA Bridge, and it’s an interoperability protocol that allows standalone blockchain networks to communicate and interact with one another. Here are the bridges that POA has already built:

  • Native to ERC20

This bridge allows users to transfer POA native tokens from the POA network to the Ethereum network, where it will become a newly minted token called POA20. This has exactly the same properties as a standard ERC20 token and can be used wherever ERC20 tokens are normally used.

Quick reminder: ERC20 is simply a standard for smart contracts on the Ethereum blockchain. ERC stands for Ethereum Request for Comment. It’s a common list of rules that are followed in the larger Ethereum ecosystem.

  • ERC20 to ERC20

This bridge allows users to transfer tokens from one Ethereum blockchain network to another. Think of it as a sort of atomic swap, where you can switch token X in network A for token Y in network B. This is useful for projects who want to take some transaction off the Ethereum mainnet onto a sidechain, where transactions can be processed faster and at a lower cost.

  • ERC20 to Native

This bridge lets users transfer ERC20 tokens from Ethereum to another blockchain. This doesn’t mean tokens will be duplicated or that it will lead to an increase in the supply of tokens. Tokens moving from one blockchain to the other are created on the receiving end and destroyed (or ‘burned’) on the transmitting end.

Several blockchain projects are already using POA’s bridging technology. Blockchain-based international marketplace Sentinel Chain uses POA’s ERC20 to ERC20 bridge to transfer tokens from random Ethereum-based networks onto the Sentinel blockchain.

Another example is Virtue Poker, which uses POA’s bridge to eliminate the expensive on-chain Ethereum transactions. Main network transactions are only required when a player of Virtue Poker wishes to enter or exit Virtue Poker’s sidechain via the POA bridge.

POA xDai

The best example of POA’s new consensus mechanism and its bridging technology combined is the xDai Chain. xDai is a so-called stablecoin, which is a cryptocurrency designed to minimize the effects of price volatility by pegging itself against an external reference point, often the USD.

xDai is based on the DAI token, which is a stablecoin pegged to the USD that requires the user to send ether to a collateralized debt position (CDP) to back its value. It uses interest rate mechanisms to stabilize its price to as close a 1:1 on the dollar as possible. But DAI is built on the Ethereum network, which means that it incurs gas transaction fees for every transaction. These transaction fees are unpredictable and volatile, which defeats the purpose of a stablecoin.

However, xDai is a native token on its own network. It’s fast, efficient, and it uses the POA consensus mechanism for identity-at-stake security. Its gas price is fixed too, which solves DOA’s volatility problem and which makes it a much more reliable peg to the USD.

MakerDAO, the creators of the DAO token, partnered with PAO to achieve this. xDai tokens are minted by taking DAI tokens and using PAO’s ERC20 to Native bridge to move them from the Ethereum network to the xDai Chain. Considering block times on the xDai Chain are only five seconds (versus fifteen seconds on Ethereum) xDai can be transferred between users at three times the speed and at a significantly lower cost than on Ethereum.

POA DApps

POA has a large number of DApps running on its blockchain already, most of them concerned with the maintenance and the operation of the blockchain. Its most notable DApps are Nifty Wallet, a Chrome extension that’s a fork of the popular Metamask wallet, BlockScout, an open-source tool for analyzing blockchain transactions on several Ethereum-based networks, and TokenBridge, the bridging technology for Native to ERC20 and ERC20 to ERC20 cross-chain transfers.

Currently, the POA team is focused on four main projects: TokenBridge, BlockScout, a new DApp called Mana-Ethereum, and the core POA protocol. In terms of the core protocol, the team wants to make the POA consensus mechanism more resilient to outside attacks while also increasing the number of network validators (which started out at 3 and is currently at 23).

What Does This Mean for Gaming?

POA already has two games running on its blockchain: EverDragons and DopeRaider. EverDragons moved over from Ethereum to POA because it saw days of congestion on the Ethereum network after a Chinese exchange ran a badly structured voting process, which led to the delay of a key event in the game’s development.

Moving over from Ethereum to POA was quite easy, because the bridging technology was already there and because POA is still heavily linked to Ethereum. As a result, the game has become cheaper and much faster to play after the migration from Ethereum to POA.

I believe that the most interesting aspect of the entire POA project is the interoperability that its bridging technology allows for. We’ve already written how blockchain can connect entirely different games. This could lead to creative puzzles and new ways to collaborate with players across multiple games, instead of simply inside one game. A gaming multiverse, if you will.

However, up to this point, there was no way two games could be connected if they weren’t built on the same blockchain. This would require significant communication between separate game development teams that might prefer one blockchain over another.

With the POA bridge, games that are built on entirely different blockchains (but still with Ethereum as the root blockchain) can now be connected to one another. This gives an entirely new dimension to the interoperability that many people are excited about when talking about blockchain.

In Conclusion

Only PoW has stood the test of time for long enough to say it’s a stable and secure consensus mechanism. PoS and DPoS offer many benefits over PoW, but has the critical flaw that the perceived value of invested stake differs from person to person. POA delivers a new consensus mechanism that puts people’s identity and reputation at risk, but only time will tell whether that’s sufficient to keep a blockchain secure and operable.

POA’s bridging technology demonstrates that it’s possible to quickly and cost-effectively bridge tokens from one blockchain network to another. This means DApps on different blockchains can work together in entirely new ways, a big step forward in the real-world applicability of blockchain applications.

For gaming, this means a multiverse that’s even more multi than before, at lower transaction fees and at three times the speed of Ethereum. It’s another step in the right direction towards unique DGames that no regular game can match.