Proof of Reputation (PoR) Consensus
Circular uses a consensus mechanism referred to as Proof of Reputation (PoR). PoR is a reputation-weighted finality process in which nodes that consistently participate correctly earn higher reputation, and nodes that repeatedly behave incorrectly lose reputation over time.
Unlike stake-weighted designs that rely on bonded capital as a primary deterrent, PoR uses a reputation index to modulate a node’s expected future fee earnings. Reputation is represented as a normalized value between 0 and 1. Transaction fee earnings can be adjusted by reputation:
earned fee = fee * reputation
This creates an incentive to behave correctly over repeated rounds because sustained misbehavior reduces future revenue.
Block proposal, validation, and finalization
Proposal: A node proposes a block and broadcasts it to the network.
Validation: Peers validate the proposal, including proposer identity, header integrity, and transaction validity under protocol rules.
Signed responses: Each validating node returns a signed response indicating acceptance or rejection, together with a reason code where applicable.
Aggregation: The proposer aggregates the signed responses into a report (a quorum record) and broadcasts the report.
Final outcome: The network determines the outcome according to the protocol’s quorum rule (for example a majority or supermajority threshold, depending on configuration).
Adoption: Nodes adopt the finalized block after verifying the report signatures and the quorum rule.
Nodes that diverge from the finalized outcome may have their reputation adjusted according to defined rules. Reputation adjustment rules must account for known network conditions (for example temporary partitions or latency) and should be applied only when misbehavior can be determined under protocol criteria.
Reputation effects
Nodes that repeatedly produce invalid blocks, sign conflicting outcomes, or otherwise violate protocol rules can be penalized via reputation reduction and, if thresholds are crossed, may be excluded by network policy. Nodes that participate correctly maintain or improve reputation over time.
Notes on finality and forks
PoR is intended to provide fast finality under the protocol’s operating assumptions. Finality and fork behavior depend on the quorum thresholds, timing assumptions, and fault model defined by the protocol. Any “fork-proof” property should be stated only with explicit assumptions and formal definitions.
Programmability
Circular supports multiple transaction types (for example tokens, NFTs, certificates, signatures, and smart contracts) and can be extended to support additional transaction formats under defined validation rules.
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