Template-Type: ReDIF-Paper 1.0
Author-Name: Daniel Eidan
Author-X-Name-First: Daniel
Author-X-Name-Last: Eidan
Author-Name: Jon Frost
Author-X-Name-First: Jon
Author-X-Name-Last: Frost
Author-Name: Rudraksh Kansal
Author-X-Name-First: Rudraksh
Author-X-Name-Last: Kansal
Author-Name: Ulf Lewrick
Author-X-Name-First: Ulf
Author-X-Name-Last: Lewrick
Author-Name: Sang Hyuk Lim
Author-X-Name-First: Sang Hyuk
Author-X-Name-Last: Lim
Author-Name: Tomasz Rybarczyk
Author-X-Name-First: Tomasz
Author-X-Name-Last: Rybarczyk
Title: Blockchain consensus mechanisms and fragmentation
Abstract: While all permissionless blockchains use token-based incentives to sustain honest validation, differences in how validator rewards, coordination and participation are structured lead to distinct equilibria and trade-offs between decentralisation, security and scalability. These trade-offs underpin the emergence of multiple layer 1 networks and the expansion of layer 2 solutions, resulting in fragmentation of infrastructure, liquidity and assets across and within chains.Tools to mitigate fragmentation – eg bridges and native multi-chain issuance – can reduce frictions, but they reintroduce new dependencies on trust, governance and operational resilience.
Length: 8 pages
Creation-Date: 2026-07-06
File-URL: https://www.bis.org/publ/bisbull126.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull126.htm
File-Format: text/html
Number: 126
Handle: RePEc:bis:bisblt:126