4 most popular blockchains -analysis and comparison of Ethereum, Hyperledger Fabric, Corda and Quorum

Maciej Zieliński

03 Apr 2020
4 most popular blockchains -analysis and comparison of Ethereum, Hyperledger Fabric, Corda and Quorum

You have been interested in blockchain for some time now and are wondering if you could use it in your business model? Undoubtedly it is a technology which has recently gained popularity and which usability in the real estate and entertainment has been found pretty quickly. Among the companies present on the AngelList around 3 thousand use Blockchain. On our Nextrope blog we are trying to explain the most effective ways in which it can be used in business. In this article we compared the 4 most popular protocols- Ethereum, Hyperledger Fabric, Corda and Quorum.


Ethereum is a developer platform based on the blockchain technology which was founded in 2015 by Vitalik Buterin. It allows the creation of decentralised applications which use the smart contracts.

Ethereum was the first blockchain which started to use smart contracts- fragments of Solidity code. Those contracts are called out by EVM, which is the core of Ethereum. Those contracts cannot interact with the surroundings and cant be activated without an input, they must be called out externally. If their function is called out by one of the chains, it automatically carries out the rest. The effects can be seen by the entire network. Thanks to that it is possible for Ethereum to create decentralised applications.

Because the code of established contract cannot be influenced, it is only available for read-only. In order to change it a complete overhaul would be required by establishing a new, completely different code of a different address and the initial state of the variables. The contract cannot be stopped after its execution unless it has been written in its code. Any of the operations on the record of the smart contract are openly logged and can be read through many available blockchain explorers. That way it is guaranteed that the coded information, value or function shall be constant. It is sometimes called „law by code”-creating the law with the usage of the source code.

Ethereum guarantees the constancy of the data and consequently its reliability in the processes of blockchain and smart contracts. That way the need of engaging the third party disappears. It brings many advantages as it grants its users the ability to make transactions directly with the clients, quickens the process of entering into the contract and lowers the costs of increasing the reliability of data.

“We live in the era in which there is no trust, which is why we are creating the third parties which we give our trust to. We send them our data, information, wealth or identity because we want to carry out some common interest and create a positive value. Blockchain will have its use the moment we will be able to fully embrace the cheap, trustful method it can give us”

                                           Maciej Jędrzejczyk IBM Blockchain Leader interview with Nextrope 

Dapps also allow us the reduction of the need of administrative control, for example the business entity which establishes the platform, over the entire network. Very often it finds its use in the b2c relationship. We recently had an occasion to present the examples on how OPUS (which is based on Ethereum) can change the entertainment market. 
Thanks to the decentralization, the safety of data is no more dependant on the single server. If it is destroyed in one of the chains, they still will exist in all the other ones. We already talked about the superiority of the decentralization when it came to land registers which, at the moment, are held in a centralised way which makes them vulnerable towards the random events such as the natural catastrophes or fires. The constant nature of the source code also makes the data invulnerable towards the hackers.

Another advantage behind Ethereum is the tokenisation layer. Token is a smart contract which has a standardised form which stands for a unit of value. Companies create it to make it possible for the users to interact with their products and to make the distribution of prizes and benefits easier. Tokens can be used for accounting the property rights, pay checks or to give the bonuses to old-time clients. Their usage is as broad as the company needs it to be.

Ethereum is the only blockchain in this article that has its own cryptocurrency- Ether. In order to send the data, the user must give the pay- gas for saving it. In order to do this  the user must have his own e-wallet key. Smart contract alone will not be enough to carry out the transaction unless its carried out through the e-wallet.

Hyperledger Fabric

As it turns out, it is not optimal for each user to keep a decentralised registry. Having the privacy of data in mind, in 2018 the Linux foundation has founded the Hyperledger Project which is currently supported by IBM, Intel or SAP Ariba which develops a number of solutions, which also includes the most frequently used Hyperledger Fabric.

Thanks to its modularity, it can be used as a private blockchain which means that only the registered users will be capable of accessing the data which is held by it. It is a key factor when it comes to many companies which are keen on the exchange of data about the transactions between the trusted sides. 


The difference in practice

For the purpose of explanation of how Hyperledger works lets imagine a regular Jan who has his own blockchain based shop in Warsaw. Recently he found a Chilean producer of avocado- Emilia. They manage to negotiate a special prize, but Emilia wants to keep this a secret, she wants her clients to still pay the full prize for her prized avocados.

This would be impossible if their transaction was registered in the public domain of blockchain. The other clients would be immediately alarmed of this situation. The transaction would not be even carried out because all of the parties would have to agree on the price.

Hyperledger allows us to solve this problem. The application based on it will check the identity of Jan and then it will send the data about the transaction to Emilia. After agreeing to the established terms, she would send the data back to Jan, and so the transaction could be saved on their registry. In such a situation only two sides of transaction must receive the results. When there is more of them, after the terms are accepted, the transaction deal will be sent to the cloud server where they will be able to accept the transaction after reaching consensus. Then the transaction is saved in the registry.

However, just delivering the avocado to Jans shop engages not only him, but also its producer and many other parties. For the fruit to be delivered to Warsaw the engagement of the shipping agent, the custom and  harbour department and the insurance company which will ensure that the transaction will be secured. The majority of those parties do not need the information about the special prize of avocados. Thanks to Hyperledger, such a transaction can be carried out without the need to use all of the information.

Thats why it finds its use everywhere where privacy and flow of information without the need to share it with all the sides of the transaction is needed. Hyperledger Fabric has its use in the number of different industries, including the financial, logistic and even the food one.


Another solution which extends the topic of private blockchain networks is Corda, founded by the R3 corporation. The goal of its creation was to create a global registry which would allow the economic operators to interact with each other and manage their contracts. In order to make this possible the platforms architecture must be based on the following principles:

  • Only parties which have justified interests should have access to the registries on the platform
  • The contracts are sustained through the system which is made with the usage of the computer code which makes it so that they are used in accordance to law
  • The consensus is reached out by the people who carry out the transactions, not the entire system 

Platforms like Hyperledger and Ethereum are using smart contracts, however in case of Corda the leading language of their encryption is Kotlin, and the smart contract terminology is replaced by just “contract”. Such contracts use both logic and business data with the judicial process which allows for rooting of the contracts in the existing judicial system.

Corda has two types of consensus: validity of the transaction and the uniqueness of the transaction. In order to acquire the first one, the sides must reach the certainty by checking the entire code behind the contract and by delivering all of the required signs. As far as the second one is concerned, they verify if the transaction is a unique consumer of all of the information.


The finance world in mind  sees blockchain as both a chance and a risk. The stability and ease of verification of data is conflicted by the model of public transparency which is opposed by some institutions. Quorum is the platform created by JP Morgan. It is an Ethereum which was improved by the layer of privacy which allows the use of blockchain without the need of making your data public to all of the users.

Just like Corda, it’s a private blockchain, which is created only by the users which were verified by the special program. Quorum can differentiate the private and public transactions in the chain and allow them to appear in one blockchain network. Public ones act like transactions based on Ethereum, however,  the private ones are operated by the system called Constellation. It’s a mechanism which doesn’t use the blockchain technology.  It is based on encryption of the messages on the communication mechanism called enclave – which is the record of the previous transactions, authentications and verifications. Thanks to this, Constellation Quorum is able to process several hundred transactions per minute, much faster than Ethereum or Bitcoin.

Thanks to its reliability and privacy it provides, it’s the perfect solution for the financial sector. Even today it has been recognized by the National Bank of Canada, Central Bank of Brazil or the commercial projects like Adhara or Skeps. It can also be seen that many international companies like Starbucks see the potential behind this technology and are eager to experiment with it.

What is the best blockchain for your business?

The key advantage of every one of aforementioned blockchain solutions is the way in which they solve the problem of a distrust. The companies could possibly save money by investing at the decentralised apps which would allow to save time and give an ability to verify the relations between the parties remotely.

The choice of the platform should be dictated by your current needs. Most b2c companies like facebook ebay or amazon use ethereum which they used to create their own cryptotokens. Hyperledger is chosen mostly by b2b companies which seek to improve their relations. And finally, Corda and Quorum are chosen by financial sector and are used by institutions such as the National Bank of Canada.

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Applying Game Theory in Token Design

Kajetan Olas

16 Apr 2024
Applying Game Theory in Token Design

Blockchain technology allows for aligning incentives among network participants by rewarding desired behaviors with tokens.
But there is more to it than simply fostering cooperation. Game theory allows for designing incentive-machines that can't be turned-off and resemble artificial life.

Emergent Optimization

Game theory provides a robust framework for analyzing strategic interactions with mathematical models, which is particularly useful in blockchain environments where multiple stakeholders interact within a set of predefined rules. By applying this framework to token systems, developers can design systems that influence the emergent behaviors of network participants. This ensures the stability and effectiveness of the ecosystem.

Bonding Curves

Bonding curves are tool used in token design to manage the relationship between price and token supply predictably. Essentially, a bonding curve is a mathematical curve that defines the price of a token based on its supply. The more tokens that are bought, the higher the price climbs, and vice versa. This model incentivizes early adoption and can help stabilize a token’s economy over time.

For example, a bonding curve could be designed to slow down price increases after certain milestones are reached, thus preventing speculative bubbles and encouraging steadier, more organic growth.

The Case of Bitcoin

Bitcoin’s design incorporates game theory, most notably through its consensus mechanism of proof-of-work (PoW). Its reward function optimizes for security (hashrate) by optimizing for maximum electricity usage. Therefore, optimizing for its legitimate goal of being secure also inadvertently optimizes for corrupting natural environment. Another emergent outcome of PoW is the creation of mining pools, that increase centralization.

The Paperclip Maximizer and the dangers of blockchain economy

What’s the connection between AI from the story and decentralized economies? Blockchain-based incentive systems also can’t be turned off. This means that if we design an incentive system that optimizes towards a wrong objective, we might be unable to change it. Bitcoin critics argue that the PoW consensus mechanism optimizes toward destroying planet Earth.

Layer 2 Solutions

Layer 2 solutions are built on the understanding that the security provided by this core kernel of certainty can be used as an anchor. This anchor then supports additional economic mechanisms that operate off the blockchain, extending the utility of public blockchains like Ethereum. These mechanisms include state channels, sidechains, or plasma, each offering a way to conduct transactions off-chain while still being able to refer back to the anchored security of the main chain if necessary.

Conceptual Example of State Channels

State channels allow participants to perform numerous transactions off-chain, with the blockchain serving as a backstop in case of disputes or malfeasance.

Consider two players, Alice and Bob, who want to play a game of tic-tac-toe with stakes in Ethereum. The naive approach would be to interact directly with a smart contract for every move, which would be slow and costly. Instead, they can use a state channel for their game.

  1. Opening the Channel: They start by deploying a "Judge" smart contract on Ethereum, which holds the 1 ETH wager. The contract knows the rules of the game and the identities of the players.
  2. Playing the Game: Alice and Bob play the game off-chain by signing each move as transactions, which are exchanged directly between them but not broadcast to the blockchain. Each transaction includes a nonce to ensure moves are kept in order.
  3. Closing the Channel: When the game ends, the final state (i.e., the sequence of moves) is sent to the Judge contract, which pays out the wager to the winner after confirming both parties agree on the outcome.

A threat stronger than the execution

If Bob tries to cheat by submitting an old state where he was winning, Alice can challenge this during a dispute period by submitting a newer signed state. The Judge contract can verify the authenticity and order of these states due to the nonces, ensuring the integrity of the game. Thus, the mere threat of execution (submitting the state to the blockchain and having the fraud exposed) secures the off-chain interactions.

Game Theory in Practice

Understanding the application of game theory within blockchain and token ecosystems requires a structured approach to analyzing how stakeholders interact, defining possible actions they can take, and understanding the causal relationships within the system. This structured analysis helps in creating effective strategies that ensure the system operates as intended.

Stakeholder Analysis

Identifying Stakeholders

The first step in applying game theory effectively is identifying all relevant stakeholders within the ecosystem. This includes direct participants such as users, miners, and developers but also external entities like regulators, potential attackers, and partner organizations. Understanding who the stakeholders are and what their interests and capabilities are is crucial for predicting how they might interact within the system.

Stakeholders in blockchain development for systems engineering

Assessing Incentives and Capabilities

Each stakeholder has different motivations and resources at their disposal. For instance, miners are motivated by block rewards and transaction fees, while users seek fast, secure, and cheap transactions. Clearly defining these incentives helps in predicting how changes to the system’s rules and parameters might influence their behaviors.

Defining Action Space

Possible Actions

The action space encompasses all possible decisions or strategies stakeholders can employ in response to the ecosystem's dynamics. For example, a miner might choose to increase computational power, a user might decide to hold or sell tokens, and a developer might propose changes to the protocol.

Artonomus, Github

Constraints and Opportunities

Understanding the constraints (such as economic costs, technological limitations, and regulatory frameworks) and opportunities (such as new technological advancements or changes in market demand) within which these actions take place is vital. This helps in modeling potential strategies stakeholders might adopt.

Artonomus, Github

Causal Relationships Diagram

Mapping Interactions

Creating a diagram that represents the causal relationships between different actions and outcomes within the ecosystem can illuminate how complex interactions unfold. This diagram helps in identifying which variables influence others and how they do so, making it easier to predict the outcomes of certain actions.

Artonomus, Github

Analyzing Impact

By examining the causal relationships, developers and system designers can identify critical leverage points where small changes could have significant impacts. This analysis is crucial for enhancing system stability and ensuring its efficiency.

Feedback Loops

Understanding feedback loops within a blockchain ecosystem is critical as they can significantly amplify or mitigate the effects of changes within the system. These loops can reinforce or counteract trends, leading to rapid growth or decline.

Reinforcing Loops

Reinforcing loops are feedback mechanisms that amplify the effects of a trend or action. For example, increased adoption of a blockchain platform can lead to more developers creating applications on it, which in turn leads to further adoption. This positive feedback loop can drive rapid growth and success.

Death Spiral

Conversely, a death spiral is a type of reinforcing loop that leads to negative outcomes. An example might be the increasing cost of transaction fees leading to decreased usage of the blockchain, which reduces the incentive for miners to secure the network, further decreasing system performance and user adoption. Identifying potential death spirals early is crucial for maintaining the ecosystem's health.

The Death Spiral: How Terra's Algorithmic Stablecoin Came Crashing Down
the-death-spiral-how-terras-algorithmic-stablecoin-came-crashing-down/, Forbes


The fundamental advantage of token-based systems is being able to reward desired behavior. To capitalize on that possibility, token engineers put careful attention into optimization and designing incentives for long-term growth.


  1. What does game theory contribute to blockchain token design?
    • Game theory optimizes blockchain ecosystems by structuring incentives that reward desired behavior.
  2. How do bonding curves apply game theory to improve token economics?
    • Bonding curves set token pricing that adjusts with supply changes, strategically incentivizing early purchases and penalizing speculation.
  3. What benefits do Layer 2 solutions provide in the context of game theory?
    • Layer 2 solutions leverage game theory, by creating systems where the threat of reporting fraudulent behavior ensures honest participation.

Token Engineering Process

Kajetan Olas

13 Apr 2024
Token Engineering Process

Token Engineering is an emerging field that addresses the systematic design and engineering of blockchain-based tokens. It applies rigorous mathematical methods from the Complex Systems Engineering discipline to tokenomics design.

In this article, we will walk through the Token Engineering Process and break it down into three key stages. Discovery Phase, Design Phase, and Deployment Phase.

Discovery Phase of Token Engineering Process

The first stage of the token engineering process is the Discovery Phase. It focuses on constructing high-level business plans, defining objectives, and identifying problems to be solved. That phase is also the time when token engineers first define key stakeholders in the project.

Defining the Problem

This may seem counterintuitive. Why would we start with the problem when designing tokenomics? Shouldn’t we start with more down-to-earth matters like token supply? The answer is No. Tokens are a medium for creating and exchanging value within a project’s ecosystem. Since crypto projects draw their value from solving problems that can’t be solved through TradFi mechanisms, their tokenomics should reflect that. 

The industry standard, developed by McKinsey & Co. and adapted to token engineering purposes by Outlier Ventures, is structuring the problem through a logic tree, following MECE.
MECE stands for Mutually Exclusive, Collectively Exhaustive. Mutually Exclusive means that problems in the tree should not overlap. Collectively Exhaustive means that the tree should cover all issues.

In practice, the “Problem” should be replaced by a whole problem statement worksheet. The same will hold for some of the boxes.
A commonly used tool for designing these kinds of diagrams is the Miro whiteboard.

Identifying Stakeholders and Value Flows in Token Engineering

This part is about identifying all relevant actors in the ecosystem and how value flows between them. To illustrate what we mean let’s consider an example of NFT marketplace. In its case, relevant actors might be sellers, buyers, NFT creators, and a marketplace owner. Possible value flow when conducting a transaction might be: buyer gets rid of his tokens, seller gets some of them, marketplace owner gets some of them as fees, and NFT creators get some of them as royalties.

Incentive Mechanisms Canvas

The last part of what we consider to be in the Discovery Phase is filling the Incentive Mechanisms Canvas. After successfully identifying value flows in the previous stage, token engineers search for frictions to desired behaviors and point out the undesired behaviors. For example, friction to activity on an NFT marketplace might be respecting royalty fees by marketplace owners since it reduces value flowing to the seller.

source: https://www.canva.com/design/DAFDTNKsIJs/8Ky9EoJJI7p98qKLIu2XNw/view#7

Design Phase of Token Engineering Process

The second stage of the Token Engineering Process is the Design Phase in which you make use of high-level descriptions from the previous step to come up with a specific design of the project. This will include everything that can be usually found in crypto whitepapers (e.g. governance mechanisms, incentive mechanisms, token supply, etc). After finishing the design, token engineers should represent the whole value flow and transactional logic on detailed visual diagrams. These diagrams will be a basis for creating mathematical models in the Deployment Phase. 

Token Engineering Artonomous Design Diagram
Artonomous design diagram, source: Artonomous GitHub

Objective Function

Every crypto project has some objective. The objective can consist of many goals, such as decentralization or token price. The objective function is a mathematical function assigning weights to different factors that influence the main objective in the order of their importance. This function will be a reference for machine learning algorithms in the next steps. They will try to find quantitative parameters (e.g. network fees) that maximize the output of this function.
Modified Metcalfe’s Law can serve as an inspiration during that step. It’s a framework for valuing crypto projects, but we believe that after adjustments it can also be used in this context.

Deployment Phase of Token Engineering Process

The Deployment Phase is final, but also the most demanding step in the process. It involves the implementation of machine learning algorithms that test our assumptions and optimize quantitative parameters. Token Engineering draws from Nassim Taleb’s concept of Antifragility and extensively uses feedback loops to make a system that gains from arising shocks.

Agent-based Modelling 

In agent-based modeling, we describe a set of behaviors and goals displayed by each agent participating in the system (this is why previous steps focused so much on describing stakeholders). Each agent is controlled by an autonomous AI and continuously optimizes his strategy. He learns from his experience and can mimic the behavior of other agents if he finds it effective (Reinforced Learning). This approach allows for mimicking real users, who adapt their strategies with time. An example adaptive agent would be a cryptocurrency trader, who changes his trading strategy in response to experiencing a loss of money.

Monte Carlo Simulations

Token Engineers use the Monte Carlo method to simulate the consequences of various possible interactions while taking into account the probability of their occurrence. By running a large number of simulations it’s possible to stress-test the project in multiple scenarios and identify emergent risks.

Testnet Deployment

If possible, it's highly beneficial for projects to extend the testing phase even further by letting real users use the network. Idea is the same as in agent-based testing - continuous optimization based on provided metrics. Furthermore, in case the project considers airdropping its tokens, giving them to early users is a great strategy. Even though part of the activity will be disingenuine and airdrop-oriented, such strategy still works better than most.

Time Duration

Token engineering process may take from as little as 2 weeks to as much as 5 months. It depends on the project category (Layer 1 protocol will require more time, than a simple DApp), and security requirements. For example, a bank issuing its digital token will have a very low risk tolerance.

Required Skills for Token Engineering

Token engineering is a multidisciplinary field and requires a great amount of specialized knowledge. Key knowledge areas are:

  • Systems Engineering
  • Machine Learning
  • Market Research
  • Capital Markets
  • Current trends in Web3
  • Blockchain Engineering
  • Statistics


The token engineering process consists of 3 steps: Discovery Phase, Design Phase, and Deployment Phase. It’s utilized mostly by established blockchain projects, and financial institutions like the International Monetary Fund. Even though it’s a very resource-consuming process, we believe it’s worth it. Projects that went through scrupulous design and testing before launch are much more likely to receive VC funding and be in the 10% of crypto projects that survive the bear market. Going through that process also has a symbolic meaning - it shows that the project is long-term oriented.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.


What does token engineering process look like?

  • Token engineering process is conducted in a 3-step methodical fashion. This includes Discovery Phase, Design Phase, and Deployment Phase. Each of these stages should be tailored to the specific needs of a project.

Is token engineering meant only for big projects?

  • We recommend that even small projects go through a simplified design and optimization process. This increases community's trust and makes sure that the tokenomics doesn't have any obvious flaws.

How long does the token engineering process take?

  • It depends on the project and may range from 2 weeks to 5 months.