  At the core of each blockchain system, parties communicate through a
peer-to-peer (P2P) overlay. Unfortunately, recent evidence suggests these P2P
overlays represent a significant bottleneck for transaction throughput and
scalability. Furthermore, they enable a number of attacks. We argue that these
performance and security problems arise because current P2P overlays cannot
fully capture the complexity of a blockchain system as they do not offer
flexibility to accommodate node heterogeneity. We propose a novel approach to
address these issues: P2P Overlay Domains with Sovereignty (PODS), which allows
nodes in a single overlay to belong to multiple heterogeneous groups, called
domains. Each domain features its own set of protocols, tailored to the
characteristics and needs of its nodes. To demonstrate the effectiveness of
PODS, we design and implement two novel node discovery protocols: FedKad and
SovKad. Using a custom simulator, we show that node discovery using PODS
(SovKad) architecture outperforms both single overlay (Kademlia) and
multi-overlay (FedKad) architectures in terms of hop count and success rate,
though FedKad requires slightly less bandwidth.
