> ## Documentation Index
> Fetch the complete documentation index at: https://docs.arc.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Consensus layer

> Arc's Malachite consensus layer orders, validates, and finalizes blocks using a Tendermint-based Proof-of-Authority model.

Arc's consensus layer is built on
[Malachite](https://github.com/circlefin/malachite/), a high-performance,
open-source implementation of the Tendermint Byzantine Fault Tolerant (BFT)
protocol. BFT consensus ensures the network reaches agreement on a single
history of transactions even if some validators behave maliciously or go
offline. Arc uses a Proof-of-Authority (PoA) validator set to order
transactions, produce blocks, and deliver
[deterministic finality](/arc/concepts/deterministic-finality) -- the guarantee
that committed blocks are permanent and can never be reversed or reorganized --
in under one second.

## How Malachite consensus works

For how this fits into the broader architecture, see the
[system overview](/arc/concepts/system-overview).

Each block passes through a four-step pipeline. A rotating proposer assembles
transactions, and all validators participate in two rounds of voting before the
block is committed.

1. **Propose** -- A validator selected as proposer for the current round bundles
   pending transactions into a block and broadcasts it.
2. **Pre-vote** -- Every validator evaluates the proposed block and broadcasts a
   vote on its validity.
3. **Pre-commit** -- Validators broadcast a second vote. If more than two-thirds
   of validators pre-commit to the same block, it proceeds to commit.
4. **Commit** -- The block is finalized and appended to the chain. Every
   transaction in the block is irreversible.

This two-phase voting process (pre-vote + pre-commit) guarantees that two
conflicting blocks can never both be finalized, making reorganizations
impossible.

```mermaid theme={null}
sequenceDiagram
    participant P as Proposer (Validator)
    participant V1 as Validator 1
    participant V2 as Validator 2
    participant V3 as Validator 3

    Note over P,V3: Arc Consensus (Malachite BFT)

    P->>V1: 1. Propose block
    P->>V2: 1. Propose block
    P->>V3: 1. Propose block

    V1->>P: 2. Pre-vote (block valid)
    V2->>P: 2. Pre-vote (block valid)
    V3->>P: 2. Pre-vote (block valid)

    V1->>P: 3. Pre-commit (confirm vote)
    V2->>P: 3. Pre-commit (confirm vote)
    V3->>P: 3. Pre-commit (confirm vote)

    Note over P,V3: ≥ 2/3 of validators pre-commit for the block

    P->>P: 4. Finalize block (local commit)
    V1->>V1: 4. Finalize block (local commit)
    V2->>V2: 4. Finalize block (local commit)
    V3->>V3: 4. Finalize block (local commit)

    Note over P,V3: All validators finalize block locally (under 1s)
```

## Proof-of-Authority validator set

Arc uses a **permissioned Proof-of-Authority (PoA)** model instead of anonymous
economic staking. Validators are selected, known institutions with compliance
obligations and operational guarantees.

For details on operating a validator node, see
[running a node](/arc/concepts/running-a-node).

* **SOC 2 certified** -- Validators meet audited security and availability
  standards.
* **Geographic distribution** -- Nodes run across multiple global regions to
  reduce correlated downtime.
* **Rotating proposer** -- Block production rotates among validators to ensure
  fairness and liveness.
* **Uptime SLAs** -- Each validator commits to operational availability
  requirements.

This design replaces anonymous economic incentives with institutional
accountability, providing stronger assurances for regulated finance.

## Performance characteristics

Performance also depends on the
[execution layer](/arc/concepts/execution-layer), which processes transactions
within each block.

Malachite delivers optimistic responsiveness: blocks are produced as fast as the
network permits, with no artificial delays or extra timeouts.

| Metric          | Value       | Conditions                         |
| :-------------- | :---------- | :--------------------------------- |
| Throughput      | 3,000+ TPS  | 20 globally distributed validators |
| Finality        | \<350 ms    | Benchmark conditions               |
| Peak throughput | 10,000+ TPS | 4 validators                       |

## Security guarantees

Arc combines protocol-level safety with institutional safeguards:

| Guarantee      | Description                                                                                                 |
| :------------- | :---------------------------------------------------------------------------------------------------------- |
| Safety         | With fewer than one-third faulty validators, consensus guarantees that no conflicting blocks are finalized. |
| Liveness       | The network continues to produce blocks as long as two-thirds or more of validators are online and honest.  |
| Accountability | Validators are regulated institutions, making malicious behavior costly beyond protocol penalties.          |
| Resilience     | Geographic distribution reduces the risk of correlated outages or targeted attacks.                         |

The [deployment model](/arc/concepts/deployment-model) provides additional
detail on how validators are geographically distributed.

## Roadmap

The Malachite roadmap includes multi-proposer support (multiple validators
propose blocks in parallel for higher throughput), a protocol optimization that
reduces consensus from three rounds to two for lower latency, and a potential
transition from Proof-of-Authority to permissioned Proof-of-Stake to broaden
validator participation while maintaining compliance requirements.