Bitroot Parallel EVM Technology In-Depth Analysis: High-Performance Blockchain Architecture Design and Implementation
Source: Bitroot
Introduction: A Technological Breakthrough to Overcome the Blockchain Performance Bottleneck
Throughout the development of blockchain technology over the past decade, performance bottleneck has always been a core obstacle hindering its large-scale application. With Ethereum only able to process 15 transactions per second and a confirmation time of up to 12 seconds, such performance is clearly insufficient to meet the growing demands of applications. The serial execution model and limited computing power of traditional blockchains severely restrict system throughput. The emergence of Bitroot is precisely to break through this dilemma. Through four technological innovations—Pipeline BFT consensus mechanism, optimistic parallelization EVM, state sharding, and BLS signature aggregation—Bitroot has achieved a breakthrough with 400 milliseconds finality and 25,600 TPS, providing an engineered technical solution for the large-scale application of blockchain technology. This article will elaborate on Bitroot's core technological architecture design principles, algorithm innovations, and engineering practical experience, providing a complete technical blueprint for high-performance blockchain systems.
Chapter 1: Technical Architecture—The Engineering Philosophy of Layered Design
1.1 Five-Layer Architecture
Bitroot adopts the classical layered architectural paradigm, sequentially building five clearly defined and distinct core layers from the bottom up. This design not only achieves good module decoupling but also lays a solid foundation for the system's scalability and maintainability.
The storage layer, as the cornerstone of the entire system, undertakes the task of persisting state data. It uses an enhanced Merkle Patricia Trie structure to manage the state tree, supporting incremental updates and fast state proof generation. Addressing the common problem of state bloat in blockchains, Bitroot introduces a distributed storage system that stores large data shards in the network, while only keeping hash references on-chain. This design effectively alleviates the storage pressure on full nodes, enabling ordinary hardware to participate in network validation.
The network layer builds a robust peer-to-peer communication infrastructure. It utilizes the Kademlia distributed hash table for node discovery and employs the GossipSub protocol for message propagation, ensuring efficient information dissemination in the network. Particularly noteworthy is the optimization of the network layer for large-scale data transmission, with a dedicated mechanism for transferring large data packets that supports packetization and resumption of interrupted transfers, significantly improving data synchronization efficiency.
The consensus layer is the core of Bitroot's performance breakthrough. By integrating the Pipeline BFT consensus mechanism and BLS signature aggregation technology, it achieves pipelined processing of the consensus process. In contrast to traditional blockchains tightly coupling consensus with execution, Bitroot completely decouples the two—where the consensus module focuses on quickly determining transaction order, and the execution module processes transaction logic in the background in parallel. This design allows the consensus to continuously move forward without waiting for transaction execution to complete, greatly enhancing system throughput.
The Protocol Layer is the culmination of Bitroot's technological innovation. It not only achieves full EVM compatibility, ensuring seamless migration of Ethereum ecosystem smart contracts, but more importantly, it implements a parallel execution engine. Through a three-stage conflict detection mechanism, it breaks through the traditional EVM's single-threaded limitation, fully unleashing the computing potential of multi-core processors.
The Application Layer provides developers with a rich toolchain and SDK, lowering the barrier to entry for blockchain application development. Whether it's DeFi protocols, NFT markets, or DAO governance systems, developers can quickly build applications through standardized interfaces without needing an in-depth understanding of the underlying technical details.
graph TB
subgraph "Bitroot Five-Layer Architecture"
A[Application Layer<br/>DeFi Protocols, NFT Market, DAO Governance<br/>Toolchain, SDK]
B[Protocol Layer<br/>EVM Compatibility, Parallel Execution Engine<br/>Three-Stage Conflict Detection]
C[Consensus Layer<br/>Pipeline BFT<br/>BLS Signature Aggregation]
D[Network Layer<br/>Kademlia DHT<br/>GossipSub Protocol]
E[Storage Layer<br/>Merkle Patricia Trie<br/>Distributed Storage]
end
A --> B
B --> C
C --> D
D --> E
style A fill:#e1f5fe
style B fill:#f3e5f5
style C fill:#e8f5e8
style D fill:#fff3e0
style E fill:#fce4ec
1.2 Design Philosophy: Seeking Optimal Solutions in Trade-offs within Architecture
During the design process, the Bitroot team faced many technical trade-offs, with each decision profoundly impacting the final form of the system.
The balance between performance and decentralization is an eternal topic in blockchain design. Traditional public blockchains often sacrifice performance in pursuit of extreme decentralization, while high-performance consortium chains compromise decentralization. Bitroot has found a clever balance through a dual-pool staking model: the Validator Pool is responsible for consensus and network security, ensuring the decentralization of the core mechanism; the Computation Pool focuses on task execution, allowing operation on nodes with better performance. Dynamic switching between the two pools ensures both the security and decentralization characteristics of the system, while fully leveraging the computational power of high-performance nodes.
The trade-off between compatibility and innovation also tests design intelligence. Being fully compatible with the EVM means being able to seamlessly connect to the Ethereum ecosystem, but it will also be limited by the design constraints of the EVM. Bitroot has chosen a progressive innovation path—maintaining full compatibility with the core EVM instruction set, ensuring zero-cost migration of existing smart contracts; while introducing new capabilities through an extended instruction set, leaving ample room for future technological evolution. This design not only reduces the cost of ecosystem migration but also opens the door to technological innovation.
The coordination of security and efficiency is particularly important in a parallel execution scenario. Although parallel execution can significantly improve performance, it also introduces new security challenges such as state access conflicts and race conditions. Bitroot employs a three-stage conflict detection mechanism, conducting detection and verification before execution, during execution, and after execution, ensuring that even in a highly parallel environment, the system can maintain consistency and security. This multi-layered protection mechanism allows Bitroot to pursue ultimate performance without sacrificing security.
II. Pipeline BFT Consensus: Breaking Free from Serialization
2.1 The Performance Dilemma of Traditional BFT
Since Byzantine Fault Tolerance (BFT) consensus mechanisms were proposed by Lamport et al. in 1982, they have become the theoretical cornerstone of fault tolerance in distributed systems. However, the classic BFT architecture, while pursuing security and consistency, also exposes three fundamental performance limitations.
Serialization is the primary bottleneck. Traditional BFT requires each block to wait for the previous block to be fully confirmed before starting the consensus process. Taking Tendermint as an example, its consensus includes three stages: Propose, Prevote, Precommit, each stage requiring more than two-thirds of validator node votes, and block height strictly advancing in a serial manner. Even if nodes are equipped with high-performance hardware and sufficient network bandwidth, they cannot use these resources to accelerate the consensus process. Ethereum PoS takes 12 seconds to complete a round of confirmation, while Solana shortens block generation time to 400 milliseconds through the PoH mechanism, but final confirmation still takes 2-3 seconds. This serialization design fundamentally limits the space for improving consensus efficiency.
Communication complexity grows quadratically with the number of nodes. In a network with n validator nodes, each round of consensus requires O(n²) message exchanges—each node needs to send messages to all other nodes while receiving messages from all nodes. When the network scales to 100 nodes, a single round of consensus needs to process nearly ten thousand messages. More critically, each node needs to verify O(n) signatures, with verification overhead increasing linearly with the number of nodes. In a large-scale network, nodes spend a significant amount of time on message processing and signature verification rather than actual state transition computation.
The low resource utilization has plagued performance optimization. Modern servers are generally equipped with multi-core CPUs and high-bandwidth networks, but the design concept of traditional BFT originates from the single-core era of the 1980s. When nodes are waiting for network messages, the CPU is largely idle; and during intensive computation for signature verification, the network bandwidth is not fully utilized. This unbalanced resource utilization has led to suboptimal overall performance—even with better hardware investment, the performance improvement is very limited.
2.2 Pipelining: The Art of Parallel Processing
The core innovation of Pipeline BFT is to pipeline the consensus process, allowing blocks at different heights to undergo parallel consensus. This design inspiration comes from the modern processor's instruction pipeline technology—when one instruction is in the execution phase, the next instruction can be simultaneously in the decode phase, and the instruction after that is in the fetch phase.
A four-stage parallel mechanism is the foundation of Pipeline BFT.
The consensus process is decomposed into four independent stages: Propose, Prevote, Precommit, and Commit. The key innovation is that these four stages can overlap in execution: when block N-1 enters the Commit stage, block N simultaneously performs Precommit; when block N enters Precommit, block N+1 simultaneously performs Prevote; when block N+1 enters Prevote, block N+2 can start Propose. This design allows the consensus process to operate continuously like a pipeline, with multiple blocks at different stages being processed in parallel at any given time.
In the Propose stage, the leader node proposes a new block containing a transaction list, block hash, and reference to the previous block. To ensure fairness and prevent single points of failure, the leader is elected through a Verifiable Random Function (VRF) lottery. The randomness of the VRF is based on the hash value of the previous block, ensuring that no one can predict or manipulate the leader election result.
The Prevote stage is where validating nodes preliminarily acknowledge the proposed block. Upon receiving the proposal, nodes validate the block's legitimacy—whether the transaction signatures are valid, state transitions are correct, and the block hash matches. After validation, nodes broadcast prevote messages containing the block hash and their signature. This stage is essentially a straw poll to detect if there are enough nodes in the network that acknowledge this block.
The Precommit stage introduces stronger commitment semantics. When a node collects over two-thirds of prevotes, it believes that the majority of nodes in the network accept this block and, therefore, broadcasts a precommit message. Precommit signifies commitment—once a node sends a precommit, it cannot vote for other blocks at the same height. This one-way commitment mechanism prevents double-voting attacks, ensuring the security of the consensus.
The Commit stage is the final confirmation. When a node collects over two-thirds of pre-commits, it is confident that this block has received network consensus, so it formally commits it to the local state. At this point, the block achieves finality and becomes irreversible. Even in the event of network partitions or node failures, committed blocks will not be reversed.
graph TB
title Pipeline BFT Pipeline Parallel Mechanism
dateFormat X
axisFormat %s
section Block N-1 Propose :done, prop1, 0, 1
Prevote :done, prev1, 1, 2
Precommit :done, prec1, 2, 3
Commit :done, comm1, 3, 4
section Block N
Propose :done, prop2, 1, 2
Prevote :done, prev2, 2, 3
Precommit :done, prec2, 3, 4
Commit :active, comm2, 4, 5
section Block N+1
Propose :done, prop3, 2, 3
Prevote :done, prev3, 3, 4
Precommit :active, prec3, 4, 5
Commit :comm3, 5, 6
section Block N+2
Propose :done, prop4, 3, 4
Prevote :active, prev4, 4, 5
Precommit :prec4, 5, 6
Commit :comm4, 6, 7The state machine replication protocol ensures the consistency of a distributed system. Each validator node independently maintains a consensus state, including the current height, round, and stage. Nodes achieve state synchronization through message exchange—when they receive messages from a higher height, nodes understand they are behind and need to expedite processing; when they receive messages from different rounds at the same height, nodes decide whether to enter a new round.
The state transition rules are carefully designed to ensure the security and liveness of the system: when a node receives a valid proposal at height H, it transitions to the Prevote step; upon collecting enough Prevotes, it transitions to the Precommit step; after collecting enough Precommits, it submits the block and transitions to height H+1. If the step transition is not completed within the timeout period, the node increments the round and starts over. This timeout mechanism prevents the system from permanently stalling in exceptional circumstances.
The intelligent message scheduling ensures the correctness of message processing. Pipeline BFT has implemented a Height-based Priority Message Queue (HMPT), which calculates the priority of messages based on the message's block height, round, and step. Messages with higher heights have higher priority, ensuring that the consensus can continue to progress; within the same height, rounds and steps also affect the priority, preventing outdated messages from interfering with the current consensus.
The message processing strategy is also carefully designed: messages from the future (height greater than the current height) are cached in the pending queue, waiting for nodes to catch up with the progress; messages at the current height are processed immediately, driving the consensus forward; severely outdated messages (height much lower than the current height) are directly discarded to avoid memory leaks and invalid computations.
2.3 BLS Signature Aggregation: Cryptographic Dimensionality Reduction
In traditional ECDSA signature schemes, verifying n signatures requires O(n) time complexity and storage space. In a network with 100 validating nodes, each consensus round needs to verify 100 signatures, occupying approximately 6.4 KB of signature data. As the network scales, signature verification and transmission become significant performance bottlenecks.
BLS signature aggregation technology has brought a cryptographic breakthrough. Based on the BLS12-381 elliptic curve, Bitroot has achieved true O(1) signature verification—regardless of the number of validating nodes, the aggregated signature size remains constant at 96 bytes, requiring only one pairing operation for verification.
The BLS12-381 curve provides a 128-bit security level, meeting long-term security requirements. It defines two groups, G1 and G2, and a target group GT. G1 is used to store public keys, with elements occupying 48 bytes; G2 is used to store signatures, with elements occupying 96 bytes. This asymmetric design optimizes verification performance— the computational cost of G1 elements in pairing operations is lower, and placing public keys in G1 precisely utilizes this characteristic.
The mathematical principles of signature aggregation are based on the bilinearity property of the pairing function. Each validating node signs the message with its private key, generating a signature point in group G2. After collecting multiple signatures, the aggregate signature is obtained by adding the points in a group operation. The aggregate signature remains a valid point in the G2 group, with a constant size. For verification, a single pairing operation is performed to check if the aggregate signature and aggregate public key satisfy the pairing equation, thus validating the authenticity of all original signatures.
The threshold signature scheme further enhances the security and fault tolerance of the system. By using Shamir's Secret Sharing, the private key is divided into n shares, requiring at least t shares to reconstruct the original private key. This means that even if t-1 nodes are compromised, the attacker cannot obtain the full private key; meanwhile, as long as t honest nodes are online, the system can operate normally.
The implementation of secret sharing is based on polynomial interpolation. A t-1 degree polynomial is generated, with the private key as the constant term and other coefficients randomly chosen. Each participant receives the value of the polynomial at a specific point as a share. Any t shares can reconstruct the original polynomial through Lagrange interpolation, thereby obtaining the private key; less than t shares cannot obtain any information about the private key.
During the consensus process, validating nodes use their own share to sign messages, generating signature shares. After collecting t signature shares, the complete signature is obtained through weighted aggregation using Lagrange interpolation coefficients. This scheme ensures security while achieving O(1) verification complexity—validators only need to verify the aggregated single signature, without having to individually verify each share signature.
2.4 Consensus and Execution Separation: The Power of Decoupling
Traditional blockchains tightly couple consensus and execution, leading to mutual constraints. Consensus must wait for execution to complete before progressing, and execution is limited by the serialization requirement of consensus. Bitroot breaks through this bottleneck by separating consensus and execution.
Asynchronous processing architecture is the foundation of the separation. The consensus module focuses on determining transaction order and reaching consensus quickly; the execution module parallelly processes transaction logic in the background, performing state transitions. The two communicate asynchronously through a message queue—consensus results are passed to the execution module via the queue, and execution results are fed back to the consensus module through the queue. This decoupled design allows consensus to continue moving forward without waiting for execution to finish.
Resource isolation further optimizes performance. The consensus module and the execution module use independent resource pools to avoid resource contention. The consensus module is equipped with a high-speed network interface and dedicated CPU cores, focusing on network communication and message processing; the execution module has ample memory and multi-core processors, focusing on compute-intensive state transitions. This specialized division of labor allows each module to fully utilize hardware performance.
Batch processing magnifies the pipeline effect. The leader node bundles multiple block proposals into batches for overall consensus. Through batching, the consensus overhead of k blocks is distributed, significantly reducing the average confirmation latency per block. Additionally, BLS signature aggregation technology complements batching perfectly—regardless of how many blocks are in a batch, the aggregate signature size remains constant, and verification time is close to constant.
2.5 Performance Breakthrough: From Theory to Practice
In a standardized testing environment (AWS c5.2xlarge instance), Pipeline BFT demonstrates outstanding performance:
Latency Performance: In a 5-node network, the average latency is 300 milliseconds, increasing to only 400 milliseconds in a 21-node network. The latency grows slowly as the number of nodes increases, confirming excellent scalability.
Throughput Performance: The final test results reach 25,600 TPS, achieved through Pipeline BFT and state sharding technology for a high-performance breakthrough.
Performance Improvement: Compared to traditional BFT, latency has been reduced by 60% (1 second to 400 milliseconds), throughput has increased 8 times (3,200 to 25,600 TPS), and communication complexity has been optimized from O(n²) to O(n²/D).
III. Optimistic Parallelization of EVM: Unleashing Multi-Core Compute Power
3.1 The Historical Burden of EVM Serialization
At the inception of the Ethereum Virtual Machine (EVM), a global state tree model was adopted to simplify system implementation—where all accounts and contract states are stored in a single state tree, and all transactions must be strictly executed serially. While this design was acceptable in the early days of relatively simple blockchain applications, the rise of complex applications such as DeFi and NFTs has made serialized execution a performance bottleneck.
State access conflicts are the fundamental reason for serialization. Even if two transactions operate on completely unrelated accounts—such as Alice transferring to Bob and Charlie transferring to David—they still have to be processed serially. Because the EVM cannot pre-determine which state transactions will access, it must conservatively assume that all transactions may conflict, thus enforcing serial execution. Dynamic dependencies exacerbate the complexity of the issue. Smart contracts can dynamically compute the addresses to access based on input parameters, and these dependencies cannot be determined at compile time. For example, a proxy contract may call different target contracts based on user input, and its state access pattern is entirely unpredictable before execution. This makes static analysis almost impossible, rendering secure parallel execution unachievable.
The high cost of rollbacks makes optimistic parallelization challenging. If conflicts are discovered after attempting optimistic parallel execution, all affected transactions must be rolled back. In the worst-case scenario, the entire batch needs to be re-executed, resulting in a waste of computational resources and a significant impact on user experience. Minimizing the scope and frequency of rollbacks while ensuring security is a key challenge for parallelizing the EVM.
3.2 Three-Stage Conflict Detection: Balancing Security and Efficiency
Bitroot employs a three-stage conflict detection mechanism that maximizes parallel execution efficiency while ensuring security. These three stages perform detection and validation before execution, during execution, and after execution, establishing a multi-layered security defense network.
Stage One: Pre-execution Screening reduces conflict probability through static analysis. A dependency analyzer parses transaction bytecode to identify the states that may be accessed. For a standard ERC-20 transfer, it can precisely identify accesses to the sender's and receiver's balances; for complex DeFi contracts, it can identify at least the main state access patterns.
An improved Counting Bloom Filter (CBF) provides a fast screening mechanism. Traditional Bloom Filters only support adding elements and not removing them. The CBF implemented by Bitroot maintains a counter for each position, supporting dynamic addition and removal of elements. The CBF occupies only 128KB of memory, uses 4 independent hash functions, and controls false positive rate to below 0.1%. Through the CBF, the system can quickly determine if two transactions may have a state access conflict.
Smart grouping strategy organizes transactions into batches that can be executed in parallel. The system models transactions as nodes in a graph, where a directed edge is drawn between two transactions that may conflict. A greedy coloring algorithm is used to color the graph, allowing transactions of the same color to safely run in parallel. This method ensures correctness while maximizing parallelism.
Stage Two: In-execution Monitoring performs dynamic detection during transaction execution. Even if a transaction passes pre-execution screening, it may still access states beyond the prediction during actual execution, requiring runtime conflict detection.
A fine-grained read-write lock mechanism provides concurrency control. Bitroot has implemented address- and slot-based locks instead of coarse-grained contract-level locks. Read locks can be held by multiple threads simultaneously, allowing concurrent reads; write locks can only be held by a single thread and exclude all read locks. This fine-grained locking mechanism ensures security while maximizing parallelism.
Versioned state management implements optimistic concurrency control. It maintains a version number for each state variable, records the version of the read state during transaction execution, and checks if all read state versions remain consistent after execution. If the version numbers change, indicating a read-write conflict, a rollback and retry are necessary. This mechanism borrows from database Multi-Version Concurrency Control (MVCC) and is equally effective in a blockchain context.
Dynamic conflict resolution employs a granular rollback strategy. When a conflict is detected, only the directly conflicted transaction is rolled back, not the entire batch. Through precise dependency analysis, the system can identify which transactions depend on the rolled-back transaction, minimizing the rollback scope. The rolled-back transaction is re-enqueued for execution in the next batch.
Phase Three: Post-Execution Verification to Ensure Final State Consistency. After all transactions have been executed, the system performs a global consistency check. By computing the Merkle Tree Root Hash of the state changes and comparing it with the expected state root, the system ensures the correctness of the state transition. At the same time, it verifies the version consistency of all state changes to ensure there are no missing version conflicts.
The state merging process adopts a two-phase commit protocol to ensure atomicity. In the prepare phase, all execution engines report their execution results but do not submit them. In the commit phase, once the coordinator confirms the consistency of all results, a global commit is made. If any execution engine reports a failure, the coordinator initiates a global rollback to ensure state consistency. This mechanism draws inspiration from the classic design of distributed transactions, ensuring the reliability of the system.
lowchart TD
A[Transaction Batch Input] -->
B[Phase One: Pre-Execution Screening] B -->
C{Static Analysis<br/>Conflict Detection (CBF)}
C -->|No Conflict| D[Smart Grouping<br/>Greedy Coloring Algorithm]
C -->|Potential Conflict| E[Conservative Grouping<br/>Serial Execution]
D --> F[Phase Two: Execution Monitoring]
E --> F
F --> G[Fine-Grained Read-Write Locks<br/>Versioned State Management]
G --> H{Conflict Detected?}
lowchart TD
A[Transaction Batch Input] -->
B[Phase One: Pre-Execution Screening] B -->
C{Static Analysis<br/>Conflict Detection (CBF)}
C -->|No Conflict| D[Smart Grouping<br/>Greedy Coloring Algorithm]
C -->|Potential Conflict| E[Conservative Grouping<br/>Serial Execution]
D --> F[Phase Two: Execution Monitoring]
E --> F
F --> G[Fine-Grained Read-Write Locks<br/>Versioned State Management]
G --> H{Conflict Detected?}
3.3 Scheduling Optimization: Keeping Every Core Busy
The effectiveness of parallel execution depends not only on parallelism but also on load balancing and resource utilization. Bitroot has implemented multiple scheduling optimization techniques to ensure efficient operation of each CPU core.
The work-stealing algorithm addresses the issue of load imbalance. Each worker thread maintains its own double-ended queue and executes tasks taken from the front of the queue. When a thread's queue is empty, it randomly selects a busy thread and "steals" a task from the back of its queue. This mechanism achieves dynamic load balancing, avoiding scenarios where some threads are idle while others are busy. Tests have shown that work stealing increased CPU utilization from 68% to 90% and improved overall throughput by approximately 22%.
NUMA-aware scheduling optimizes memory access patterns. Modern servers utilize Non-Uniform Memory Access (NUMA) architecture, where memory access latency across NUMA nodes is 2-3 times higher than local access. Bitroot's scheduler detects the system's NUMA topology, binds worker threads to specific NUMA nodes, and prioritizes tasks that access local memory. Additionally, based on the hash of the account address, the state is partitioned across different NUMA nodes, ensuring that transactions accessing specific accounts are scheduled to execute on the corresponding node. NUMA-aware scheduling reduced memory access latency by 35% and increased throughput by 18%.
Dynamic parallelism adjustment adapts to different workloads. Higher parallelism is not always better –
Excessive parallelism can intensify lock contention, ultimately reducing performance. Bitroot monitors real-time metrics such as CPU utilization, memory bandwidth usage, and lock contention frequency to dynamically adjust the number of threads involved in parallel execution. When CPU utilization is low and lock contention is not severe, the parallelism is increased; when lock contention is high, parallelism is reduced to minimize contention. This adaptive mechanism allows the system to automatically optimize performance under varying workloads.
3.4 Performance Breakthrough: From Theory to Practical Validation In a Standardized Testing Environment, Optimistic Parallelized EVM Demonstrates Significant Performance Improvement:
Simple Transfer Scenario: With a 16-thread configuration, throughput increased from 1,200 TPS to 8,700 TPS, achieving a 7.25x speedup with a conflict rate below 1%.
Complex Contract Scenario: In DeFi contract scenarios with a conflict rate of 5-10%, 16 threads still achieved 5,800 TPS, a 7.25x improvement over the serial 800 TPS.
AI Computation Scenario: With a conflict rate below 0.1%, throughput increased from 600 TPS to 7,200 TPS using 16 threads, resulting in a 12x speedup.
Latency Analysis: End-to-end average latency is 1.2 seconds, with parallel execution taking 600 milliseconds (50%), state merging taking 200 milliseconds (16.7%), and network propagation taking 250 milliseconds (20.8%).
4. State Sharding: The Ultimate Solution for Horizontal Scalability
4.1 State Sharding Architecture Design
State sharding is the core technology Bitroot employs to achieve horizontal scalability, splitting the blockchain state into multiple shards for parallel processing and storage.
Sharding Strategy: Bitroot uses an account-based hash sharding strategy to distribute account states across different shards. Each shard maintains an independent state tree and facilitates shard-to-shard communication through an inter-shard communication protocol.
Shard Coordination: Shard coordinators are used to manage transaction routing and state synchronization across shards. Coordinators are responsible for breaking down cross-shard transactions into multiple sub-transactions to ensure inter-shard consistency.
State Synchronization: An efficient inter-shard state synchronization mechanism is implemented, reducing synchronization overhead through incremental sync and checkpoint techniques.
4.2 Cross-Shard Transaction Processing
Transaction Routing: An intelligent routing algorithm directs transactions to the appropriate shard, minimizing cross-shard communication overhead.
Atomicity Guarantee: Cross-shard transactions' atomicity is ensured through a two-phase commit protocol, ensuring that transactions either all succeed or all fail.
Conflict Detection: A mechanism for detecting cross-shard conflicts is implemented to prevent state inconsistencies between shards.
5. Performance Comparison and Scalability Validation
5.1 Comparison with Leading Blockchains
Confirmation Time: Bitroot's 400-millisecond finality is on par with Solana, far surpassing Ethereum's 12 seconds and Arbitrum's 2-3 seconds, supporting real-time and high-frequency transactions.
Throughput: The final test results achieved 25,600 TPS, leveraging Pipeline BFT and state sharding technology to attain high performance while maintaining EVM compatibility, demonstrating outstanding performance.
Cost Advantage: Gas fees are only 1/10 to 1/50 of Ethereum's, comparable to Layer 2 solutions, significantly enhancing application economics.
Ecosystem Compatibility: Full EVM compatibility ensures seamless migration at zero cost from the Ethereum ecosystem, allowing developers to effortlessly leverage high performance.
5.2 Scalability Test Results
Final Test Results: 25,600 TPS, 1.2 Seconds Latency, 85% Resource Utilization, validating the effectiveness of Pipeline BFT and State Sharding technologies.
Performance Comparison: Compared to traditional BFT achieving 500 TPS at the same scale, Bitroot has seen a 51x performance improvement, demonstrating the significant benefits of technological innovation.
Six, Application Scenarios and Technical Outlook
6.1 Core Application Scenarios
DeFi Protocol Optimization: Through parallel execution and quick confirmation, supporting high-frequency trading and arbitrage strategies, with over 90% reduction in Gas fees, fostering the prosperous development of the DeFi ecosystem.
NFT Market and Gaming: High throughput supporting mass NFT batch minting, low-latency confirmation providing a user experience close to traditional gaming, promoting NFT asset liquidity.
Enterprise Applications: Supply chain transparency management, digital identity authentication, data rights, and transactions, providing blockchain infrastructure for enterprise digital transformation.
6.2 Technical Challenges and Evolution
Current Challenges: State bloat issue requiring continuous optimization of storage mechanisms; complexity of cross-shard communication needing further improvement; security in a parallel execution environment requiring ongoing auditing.
Future Directions: Machine learning optimization of system parameters; hardware acceleration integrating TPUs, FPGAs, and other specialized chips; cross-chain interoperability to build a unified service ecosystem.
6.3 Technical Value Summary
Core Breakthroughs: Pipeline BFT achieves 400ms confirmation, 30x faster than traditional BFT; EVM optimistic parallelization sees a 7.25x performance improvement; state sharding supports linear scalability.
Practical Value: Full EVM compatibility ensures zero-cost migration; 25,600 TPS throughput and over 90% cost reduction validated through benchmark testing; building a complete high-performance blockchain ecosystem.
Standard Contributions: Driving the establishment of industry technical standards; constructing an open-source technology ecosystem; transforming theoretical research into engineering practices, providing a viable path for the large-scale application of high-performance blockchains.
Conclusion: Initiating a New Era of High-Performance Blockchains
Bitroot's success lies not only in technological innovation but also in translating innovation into practical engineering solutions. Through the three major technological breakthroughs of Pipeline BFT, EVM optimistic parallelization, and state sharding, Bitroot has provided a comprehensive technical blueprint for high-performance blockchain systems.
In this technical solution, we see a balance between performance and decentralization, a unification of compatibility and innovation, and a coordination between security and efficiency. The wisdom of these technical trade-offs is not only reflected in the system design but also embodied in every detail of engineering practice.
More importantly, Bitroot has laid a technical foundation for the popularization of blockchain technology. Through high-performance blockchain infrastructure, anyone can build complex decentralized applications and enjoy the value brought by blockchain technology. This popularized blockchain ecosystem will drive blockchain technology from a technical experiment to large-scale application, providing global users with more efficient, secure, and reliable blockchain services.
With the rapid development of blockchain technology and the continuous expansion of application scenarios, Bitroot's technical solution will provide important technical references and practical guidance for the development of high-performance blockchains. We have reason to believe that in the near future, high-performance blockchains will become a crucial infrastructure for the digital economy, providing robust technical support for the digital transformation of human society.
This article is from a contributor and does not represent the views of BlockBeats.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
(II)Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
(IX) Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
(X) Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
(XI) Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
(XII) Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
(XIII) Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
(XIV) Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.

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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
(II)Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
(IX) Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
(X) Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
(XI) Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
(XII) Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
(XIII) Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
(XIV) Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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