PoAD:AScalable and Energy-Efficient Consensus Algorithm for Smart Contract Execution in Decentralized Systems

Abstract

Smart contracts, integral to decentralized applications (dApps), depend heavily on the efficiency and scalability of underlying consensus mechanisms. This study evaluated the runtime scalability of two dominant protocols—Proof-of-Work (PoW) and Proof-of-Stake (PoS). It proposes a novel hybrid consensus algorithm, Proof-of-Activity-and-Delegation (PoAD), to address per formance and fairness limitations. PoAD combines validator activity scores, delegated stakes, and verifiable randomness into a composite eligibility function, with block finalization conducted via a PBFT-style mechanism. Experimental simulations were conductedacrossvaryingnetworksizes(10–60nodes),wherePoADdemonstratedsignificantlyimprovedperformance:execution time of 2.6s at 50 nodes compared to5.7s for PoWand4.3sforPoS;transaction throughput reaching 125tx/s; and finality latency reducedto1.3s,comparedto4.7sinPoW.PoADalsomaintainedhighproposerfairness(>0.95),lowerenergyconsumption(̃45% less thanPoW),andloweralgorithmiccomplexity𝑂(nlogn).TheseresultswereobtainedusingPython-basedsimulationswithcon trolled validator pools and standardized workloads. The findings suggest that PoAD offers a viable, scalable, and energy-efficient alternative to existing protocols, especially in latency-sensitive and resource-constrained environments such as IoT and decentral ized finance. Although promising, the effectiveness of PoAD under adversarial conditions and real-world deployments remains to be validated. Future studies should explore resilience under Byzantine faults, adaptive parameter tuning, and integration with asynchronous BFT frameworks to enhance their trustworthiness and applicability.