Conflux – a blockchain without barriers

By Rayna Ishihara | Crescent City Capital Market Analyst Intern

What is Conflux:
Conflux Network, also known as the Shanghai Tree-Graph Blockchain Research Institute, is the
only public and permissionless blockchain in China that is fully compliant with regulations. It
operates as a layer-1 blockchain that combines both proof-of-work(PoW) and proof-of-stake
(PoS) mechanisms in a hybrid approach, but also uses a smart contract language similar to
Ethereum. Conflux operates with an account-based model, just like Ethereum.
Due to their processing complexity, blockchains can be relatively slow and costly when it comes
to transaction fees. Conflux aims to address these issues by striving to create a blockchain
without barriers. Conflux was first developed in the research lab of Dr. Andrew Yao, a Turing
Award recipient at Tsinghua University. In 2018, the Conflux Foundation was established and
received funding to create an open application platform based on the Tree-Graph consensus
mechanism.
As the only regulatory compliant, public, and permissionless blockchain in China, Conflux aims
to create a borderless transactional and technological ecosystem for cryptocurrency projects
that have a global outlook. By extending its reach beyond China to encompass North America,
Europe, Russia, Latin America, Africa, and other parts of the world, Conflux is striving to build a
truly inclusive blockchain network.

Conflux Tech:
Conflux incorporates features of both public and private blockchains in a hybrid format. Its
unique Tree-Graph structure allows for parallel processing of multiple blocks, resulting in
significantly higher throughput than traditional linear blockchains like Bitcoin and Ethereum. The
blockchain also uses the Greedy Heaviest Adaptive Sub-Tree (GHAST) consensus mechanism
to manage transaction execution with scalability and security in mind. GHAST can detect and
prevent some chain attacks, adding an extra layer of security to the network.

The tree-graph consensus mechanism allows it to process 3000-6000 TPS without sacrificing
decentralization or security. Unlike linear blockchains like Bitcoin and Ethereum, Conflux’s
Tree-Graph structure can confirm multiple blocks concurrently, lowering confirmation times and
increasing transaction throughput. The Tree-Graph algorithm determines the precise
chronological order of each transaction block, simplifying blockchain’s scalability problem into a
sequencing equation.
Conflux Token (CFX):
CFX is the native token of the Conflux network, and it is used to pay for transaction fees and
store collateral. CFX holders can also lock their tokens for staking, which secures the network
and earns an annual interest rate of 4%. Additionally, owning CFX provides voting rights for the
network’s governance. Miners earn rewards in the form of CFX through block rewards,
transaction fees, and storage maintenance rewards, with an annualized return rate of 4%. CFX
and other CFX assets can be stored in a hardware wallet for increased security.
Recent updates
The live CFX price on April 19th is $0.3224 USD with a 24-hour trading volume of $267,327,470
USD. It has a circulating supply of 2,784,644,491 CFX tokens.

Summary
Conflux is a Layer 1 public blockchain technology that utilizes a unique Tree-Graph structure to
achieve high transaction throughput without sacrificing decentralization or security. It is a
Proof-of-Work (PoW) blockchain that uses the Greedy Heaviest Adaptive Sub-Tree (GHAST)
consensus mechanism to manage the execution order of transactions. Conflux also has its own
native cryptocurrency, CFX, which is used to pay gas fees, cover storage expenses, stake on
the network, and participate in the network’s governance.

References:
https://confluxnetwork.org/zh/about/mission
https://messari.io/asset/conflux-network/profile
https://learn.bybit.com/blockchain/what-is-conflux-network-cfx-crypto/
https://medium.com/conflux-network/understanding-the-conflux-tree-graph-consensus-algorithm
-e1b57d5c3da9
https://coinmarketcap.com/currencies/conflux-network/