POA Network is an open source public Ethereum side chain utilizing a Proof of Authority consensus mechanism. The value of the POA Network is that any organization may launch their own network outside of Ethereum, so as to avoid fees and network congestion, yet can transfer tokens between their native chain and the Ethereum blockchain, so that holders are more connected to the larger Ethereum ecosystem. The project intends to achieve blockchain interoperability and scalability by building interledger bridge technology long term, while the native POA Network blockchain serves as a general purpose blockchain that allows for Dapp development, or launching unique networks that may draw from POA network’s toolkit supporting POA consensus but feature different block validators. The project imagines that cross-chain bridge technology will pave the way for atomic swaps, assets migrations, outsourcing calculations to the most price and speed competitive networks and other new types of interactions. CTO and co-founder Igor Barinov previously co-founded Blocknotary.
The network’s POA consensus mechanism uniquely requires block validators to sign a legal agreement with the network making hard fork decisions legally binding, provide their name, home address, consent to criminal background check, and be an official US notary. So, to be approved and participate in the consensus process, validators must stake their identity and, by extension, their reputation. Faster block time, compared to Ethereum, is a key benefit of the POA consensus mechanism. POA Network also aims to enable interoperability with the Ethereum blockchain via its open source POA Bridge technology, which is a modified version of the open-source Parity bridge. This bridge can be used by anyone to connect Ethereum-compatible networks with one another.
POA, the network’s native token, is used to execute smart contracts and aims to make that process faster and less costly compared to Ethereum. For Dapps to function on the network, Dapp developers must integrate POA tokens into their Dapps. Additionally, the network mints POA-20 tokens that are ERC-20 compatible as a path to proving that the cross-chain bridge they have created is a viable technology solution for addressing cross-chain interoperability. While not necessary, users can choose to convert their native POA tokens into the equivalent amount of POA20 tokens (and vice versa) by utilizing Metamask along with the network’s bridge dApp, POA Bridge. As of mid-August 2018, POA Network is imposing a minimum amount of tokens for transfer using their POA Bridge dApp, and is sponsoring all fees associated with these transactions during the test phase. Post-testing, users will be responsible for submitting a gas fee when using Metamask for their transactions. Transferring native POA into POA20 tokens does not increase or otherwise affect the circulating supply of POA native tokens. The original POA token is locked upon transfer, and POA20 are minted to the user. When POA20 are transferred back into POA, they are burned while POA are unlocked.
POA Network launched a testnet in August 2017 with a set of 12 initial validators and the mainnet launched in December 2017. As of August 2018, there are23 total validators on the mainnet, which itself is on Ethereum’s Kovan testnet. In May 2018, POA Network publicly published the results from 4 different independent security audits of the smart contracts of POA Bridge. Auditors included Blockchain Labs, LevelK, MixBytes and Digital Security. Additionally, Secureware performed a security assessment.