Unique Node List
A fundamental part of the consensus mechanism of the XRP Ledger and the Ripple protocol, the Unique Node List (UNL) is mainly used for transaction validation.
- Trust-based System: In the Ripple network, every node keeps track of its own unique Unique Node List, which is a carefully curated list of nodes that it expressly trusts. This method, which frequently begins with a default set supplied by a reliable publisher, gives a server flexibility and control over which validators it trusts.
- Consensus Mechanism: The Unique Node List creates a strong and effective system for confirming transactions and reaching consensus, or a group decision regarding the legitimacy of transactions and the ledger’s consistency. To verify transactions and update the ledger, nodes depend on the votes of other reliable nodes in their Unique Node List.
- Defining a Credible Subset: It establishes a reliable subset of the network that a node can use to get validation. In contrast, completely permissionless blockchain environments allow anybody to participate and validate transactions without specific permission.
- Avoiding Collusion: Since each server relies on its Unique Node List validators to avoid collusion, the UNL is essential in preventing malevolent actors from banding together to deceive the network. In order to guarantee that no one entity has an excessive impact on the consensus process, a functional UNL is constructed with separate entities.
How UNL Facilitates Consensus
- Validation Threshold: A strict requirement must be fulfilled in order for a transaction to be successfully validated and added to the Ripple ledger: at least 80% of the nodes mentioned on a certain node’s Unique Node List must concur that the transaction is legitimate and authentic. This high bar guarantees that new transactions are only approved following strong support from a reliable majority.
- Minimum Non-Malicious Nodes: At least one-fifth (1/5) of all the nodes in a Unique Node List must be benign in order for transactions to be properly authenticated. Accurate transaction validation requires a minimum percentage of truthful participants.
- Levels of System Correctness:
- Strong Correctness: The number of malicious nodes in a Unique Node List is rigorously limited to (n – 1) / 5 nodes, where ‘n’ is the total number of nodes in that particular UNL, in order to guarantee perfect integrity and trustworthy validation. This formula maintains the accuracy of the system by precisely defining the bounds of allowed malicious involvement.
- Weak Correctness: Even with more malicious nodes than the rigorous barrier for strong correctness, the system can operate under “weak correctness” if the number is less than (4n + 1) / 5. The system will not authenticate new transactions in these circumstances, but it will prevent harmful transactions, protecting fundamental integrity against damaging or fraudulent data entry.
- Consensus Process: Upon receiving transaction suggestions from its Unique Node List, a server consolidates the votes and decides which transactions to add to the subsequent ledger. To update the ledger, a supermajority of reliable validators must concur on a set of transactions.
Comparison to Other Consensus Mechanisms
- Federated Byzantine Fault Tolerance (FBFT): Like a quorum system in Stellar, the Unique Node List system functions within the framework of Federated Byzantine Fault Tolerance (FBFT) consensus processes. Nodes in FBFT are usually known and their involvement is controlled, enabling group communication-based transaction and block verification.
- Contrast with PoW/PoS: This stands in contrast to more open methods such as Proof of Work (PoW) or Proof of Stake (PoS), which depend on staked assets or computing effort, respectively, for block production and validation by participants who may not be known. By emphasising a clear chain of trust for transaction processing, Ripple’s adoption of Unique Node List represents a calculated decision to reach agreement through a defined and trusted network.
- Fewer Nodes: Compared to blockchains like Bitcoin and Ethereum, Ripple uses a lot fewer nodes to obtain a consensus because of its Unique Node List process.
Benefits of the UNL Mechanism in Ripple
- Flexibility: RippleNet transactions are more flexible because there are fewer nodes. Nodes may more readily alter transactions if they contain flaws, which is advantageous for institutions that might need to alter transactions in order to apprehend criminals or correct mistakes.
- Speed: Ripple is much faster because to the Unique Node List mechanism; a single transaction usually takes less than four seconds to complete. Compared to Bitcoin (seconds to an hour) and conventional international bank transactions using SWIFT (days or weeks), this represents a significant increase in efficiency.
- Scalability: The scalability of Ripple is excellent; it can process up to 1,500 transactions per second (TPS), which is much quicker than Ethereum’s 30 TPS and on par with VISA’s 1,700 TPS.
- Attraction to Financial Institutions: Banks and other financial institutions find Ripple appealing because to its centralized features and the ability for institutions to maintain adequate control over transactions. Additionally, Ripple asserts that technology prevents fraud and complies with anti-money laundering (AML) regulations, which is crucial for financial behemoths like American Express and IndusInd Bank that utilize Ripple.
Potential Risks and Mitigations
- Centralization: Because it employs a permission-based approach in which only validators selected by Ripple through its Unique Node List validate transactions, Ripple is more centralized than other well-known blockchains. Because of this centralization, updates and rule changes are simpler to plan and carry out. Furthermore, Ripple Labs owns a sizable amount of the XRP supply, giving it the ability to affect transactions and the token’s price, albeit a hacker or rogue CEO taking over may cause chaos. However, banks also view this power to alter transactions as a positive for apprehending criminals.
- Possible Collusion: Theoretically, validators might collude more easily on the Ripple ecosystem than on most networks because to its smaller node count, which could interfere with the consensus process.
- Mitigation: Ripple examines all of its validators/nodes and assesses their performance using a range of criteria in order to prevent collusion; these information are available on their Validator Registry page. This enables users to safely complete transactions and choose a list of reliable validators for their Unique Node List.