diff --git a/elements/lisk-chain/benchmark/calculate_diff.js b/elements/lisk-chain/benchmark/calculate_diff.js
index 6504be053b0..6aed06e5187 100644
--- a/elements/lisk-chain/benchmark/calculate_diff.js
+++ b/elements/lisk-chain/benchmark/calculate_diff.js
@@ -55,8 +55,8 @@ const diff = calculateDiff(
 );
 
 /**
- * calculateDiff x 13.38 ops/sec ±1.96% (38 runs sampled)
- * undo x 50,023 ops/sec ±0.52% (89 runs sampled)
+ * calculateDiff x 102,134 ops/sec ±0.99% (84 runs sampled)
+ * undo x 50,906 ops/sec ±0.80% (91 runs sampled)
  */
 suite
     .add('calculateDiff', () => {
diff --git a/elements/lisk-chain/src/diff.ts b/elements/lisk-chain/src/diff.ts
index 0ee946ec22b..c7f15fbbb94 100644
--- a/elements/lisk-chain/src/diff.ts
+++ b/elements/lisk-chain/src/diff.ts
@@ -130,6 +130,75 @@ const diffAlgo = (initial: Buffer, final: Buffer): HistoryType[] => {
 	return [];
 };
 
+/**
+ * This function returns the length of common prefix between two buffers
+ */
+const diffCommonPrefix = (buffer1: Buffer, buffer2: Buffer): number => {
+	// Quick check for common null cases.
+	if (buffer1[0] !== buffer2[0]) {
+		return 0;
+	}
+	// Binary search.
+	// Performance analysis: http://neil.fraser.name/news/2007/10/09/
+	let pointerMin = 0;
+	let pointerMax = Math.min(buffer1.length, buffer2.length);
+	let pointerMid = pointerMax;
+	let pointerstart = 0;
+
+	while (pointerMin < pointerMid) {
+		if (
+			buffer1
+				.slice(pointerstart, pointerMid)
+				.equals(buffer2.slice(pointerstart, pointerMid))
+		) {
+			pointerMin = pointerMid;
+			pointerstart = pointerMin;
+		} else {
+			pointerMax = pointerMid;
+		}
+		pointerMid = Math.floor((pointerMax - pointerMin) / 2 + pointerMin);
+	}
+
+	return pointerMid;
+};
+
+/**
+ * This function returns the length of common suffix between two buffers
+ */
+const diffCommonSuffix = (buffer1: Buffer, buffer2: Buffer): number => {
+	// Quick check for common null cases.
+	if (buffer1[buffer1.length - 1] !== buffer2[buffer2.length - 1]) {
+		return 0;
+	}
+	// Binary search.
+	// Performance analysis: http://neil.fraser.name/news/2007/10/09/
+	let pointerMin = 0;
+	let pointerMax = Math.min(buffer1.length, buffer2.length);
+	let pointerMid = pointerMax;
+	let pointerEnd = 0;
+
+	while (pointerMin < pointerMid) {
+		if (
+			buffer1
+				.slice(buffer1.length - pointerMid, buffer1.length - pointerEnd)
+				.equals(
+					buffer2.slice(
+						buffer2.length - pointerMid,
+						buffer2.length - pointerEnd,
+					),
+				)
+		) {
+			pointerMin = pointerMid;
+			pointerEnd = pointerMin;
+		} else {
+			pointerMax = pointerMid;
+		}
+		pointerMid = Math.floor((pointerMax - pointerMin) / 2 + pointerMin);
+	}
+
+	return pointerMid;
+};
+
 /**
  * This function reduces the diff generated by the diff algorithm based on unchanged bytes
  */
@@ -137,8 +206,30 @@ export const calculateDiff = (
 	initial: Buffer,
 	final: Buffer,
 ): HistoryType[] => {
-	const longDiff = diffAlgo(initial, final);
-	const reducedDiff = [];
+	// When both the buffers are equal then return all '=' history
+	if (initial.equals(final)) {
+		return [['=', initial.length]];
+	}
+	const commonPrefix = diffCommonPrefix(initial, final);
+	const strippedPrefixInitial = initial.slice(commonPrefix, initial.length);
+	const strippedPrefixFinal = final.slice(commonPrefix, final.length);
+
+	const commonSuffix = diffCommonSuffix(
+		strippedPrefixInitial,
+		strippedPrefixFinal,
+	);
+	const strippedInitial = strippedPrefixInitial.slice(
+		0,
+		strippedPrefixInitial.length - commonSuffix,
+	);
+	const strippedFinal = strippedPrefixFinal.slice(
+		0,
+		strippedPrefixFinal.length - commonSuffix,
+	);
+	const longDiff = diffAlgo(strippedInitial, strippedFinal);
+
+	// Add common prefix to the reduced array in the start
+	const reducedDiff = commonPrefix > 0 ? [['=', commonPrefix]] : [];
 	let count = 0;
 
 	for (const b of longDiff) {
@@ -152,9 +243,11 @@ export const calculateDiff = (
 			count += 1;
 		}
 	}
-	if (count > 0) {
-		reducedDiff.push(['=', count]);
+	// When commonSuffix or last counts are greater zero then combine them
+	if (count > 0 || commonSuffix > 0) {
+		reducedDiff.push(['=', count + commonSuffix]);
 	}
+
 	return reducedDiff as HistoryType[];
 };
 
diff --git a/elements/lisk-codec/README.md b/elements/lisk-codec/README.md
index 0adebb7c432..ce2d2bdb187 100644
--- a/elements/lisk-codec/README.md
+++ b/elements/lisk-codec/README.md
@@ -8,6 +8,21 @@
 $ npm install --save @liskhq/lisk-codec
 ```
 
+## Benchmarks
+
+The following are some benchmarks for version 0.1 of this library used for encoding and decoding different objects both generic and objects similar to the ones in the Lisk networks.
+
+Node version used: v12.17.0. Computer Spec: SSD, 6 Core, 16 GB RAM. No special configuration for Node.
+
+| Object Type   | Encode (ops/sec)          | Decode (ops/sec) |
+| ------------- |:-------------:| -----:|
+| Account | 75,081 | 86,908 |
+| Transfer Transaction |225,229|   276,184 |
+| Multi-signature registration (64 Members)| 23,539 | 44,231 |
+| Block (15 KB payload)| 42,349 | 91,180 |
+
+This and additional benchmarks can be found in the `benchmarks` folder
+
 ## License
 
 Copyright 2016-2019 Lisk Foundation
diff --git a/elements/lisk-codec/benchmark/encode_decode_account.js b/elements/lisk-codec/benchmark/encode_decode_account.js
new file mode 100644
index 00000000000..aca9c0d3da5
--- /dev/null
+++ b/elements/lisk-codec/benchmark/encode_decode_account.js
@@ -0,0 +1,177 @@
+/*
+ * Copyright © 2020 Lisk Foundation
+ *
+ * See the LICENSE file at the top-level directory of this distribution
+ * for licensing information.
+ *
+ * Unless otherwise agreed in a custom licensing agreement with the Lisk Foundation,
+ * no part of this software, including this file, may be copied, modified,
+ * propagated, or distributed except according to the terms contained in the
+ * LICENSE file.
+ *
+ * Removal or modification of this copyright notice is prohibited.
+ */
+
+const { Suite } = require('benchmark');
+const { codec } = require('../dist-node/codec');
+
+const suite = new Suite();
+
+const account = {
+	address: Buffer.from('e11a11364738225813f86ea85214400e5db08d6e', 'hex'),
+	balance: BigInt(10),
+	publicKey: Buffer.from(
+		'0fd3c50a6d3bd17ea806c0566cf6cf10f6e3697d9bda1820b00cb14746bcccef',
+		'hex',
+	),
+	nonce: 5,
+	keys: {
+		numberOfSignatures: 2,
+		mandatoryKeys: [
+			Buffer.from(
+				'c8b8fbe474a2b63ccb9744a409569b0a465ee1803f80435aec1c5e7fc2d4ee18',
+				'hex',
+			),
+			Buffer.from(
+				'6115424fec0ce9c3bac5a81b5c782827d1f956fb95f1ccfa36c566d04e4d7267',
+				'hex',
+			),
+		],
+		optionalKeys: [],
+	},
+	asset: {
+		delegate: {
+			username: 'DelegateA',
+			pomHeights: [85],
+			consecutiveMissedBlocks: 32,
+			lastForgedHeight: 64,
+			isBanned: false,
+			totalVotesReceived: BigInt(300000000),
+		},
+		sentVotes: [
+			{
+				delegateAddress: Buffer.from(
+					'cd32c73e9851c7137980063b8af64aa5a31651f8dcad258b682d2ddf091029e4',
+					'hex',
+				),
+				amount: BigInt(100000000),
+			},
+			{
+				delegateAddress: Buffer.from(
+					'9d86ad24a3f030e5522b6598115bb4d70c1692c9d8995ddfccb377379a2d86c6',
+					'hex',
+				),
+				amount: BigInt(250000000),
+			},
+		],
+		unlocking: [
+			{
+				delegateAddress: Buffer.from(
+					'655e665765e3c42712d9a425b5b720d10457a5e45de0d4420e7c53ad73b02ef5',
+					'hex',
+				),
+				amount: BigInt(400000000),
+				unvoteHeight: 128,
+			},
+		],
+	},
+};
+
+const testSchema = {
+	$id: 'accountSchema',
+	type: 'object',
+	properties: {
+		address: { dataType: 'bytes', fieldNumber: 1 },
+		balance: { dataType: 'uint64', fieldNumber: 2 },
+		publicKey: { dataType: 'bytes', fieldNumber: 3 },
+		nonce: { dataType: 'uint64', fieldNumber: 4 },
+		keys: {
+			fieldNumber: 5,
+			type: 'object',
+			properties: {
+				numberOfSignatures: { dataType: 'uint32', fieldNumber: 1 },
+				mandatoryKeys: {
+					type: 'array',
+					items: { dataType: 'bytes' },
+					fieldNumber: 2,
+				},
+				optionalKeys: {
+					type: 'array',
+					items: { dataType: 'bytes' },
+					fieldNumber: 3,
+				},
+			},
+			required: ['numberOfSignatures', 'mandatoryKeys', 'optionalKeys'],
+		},
+		asset: {
+			type: 'object',
+			fieldNumber: 6,
+			properties: {
+				delegate: {
+					type: 'object',
+					fieldNumber: 1,
+					properties: {
+						username: { dataType: 'string', fieldNumber: 1 },
+						pomHeights: {
+							type: 'array',
+							items: { dataType: 'uint32' },
+							fieldNumber: 2,
+						},
+						consecutiveMissedBlocks: { dataType: 'uint32', fieldNumber: 3 },
+						lastForgedHeight: { dataType: 'uint32', fieldNumber: 4 },
+						isBanned: { dataType: 'boolean', fieldNumber: 5 },
+						totalVotesReceived: { dataType: 'uint64', fieldNumber: 6 },
+					},
+					required: [
+						'username',
+						'pomHeights',
+						'consecutiveMissedBlocks',
+						'lastForgedHeight',
+						'isBanned',
+						'totalVotesReceived',
+					],
+				},
+				sentVotes: {
+					type: 'array',
+					fieldNumber: 2,
+					items: {
+						type: 'object',
+						properties: {
+							delegateAddress: { dataType: 'bytes', fieldNumber: 1 },
+							amount: { dataType: 'uint64', fieldNumber: 2 },
+						},
+						required: ['delegateAddress', 'amount'],
+					},
+				},
+				unlocking: {
+					type: 'array',
+					fieldNumber: 3,
+					items: {
+						type: 'object',
+						properties: {
+							delegateAddress: { dataType: 'bytes', fieldNumber: 1 },
+							amount: { dataType: 'uint64', fieldNumber: 2 },
+							unvoteHeight: { dataType: 'uint32', fieldNumber: 3 },
+						},
+						required: ['delegateAddress', 'amount', 'unvoteHeight'],
+					},
+				},
+			},
+		},
+	},
+	required: ['address', 'balance', 'publicKey', 'nonce', 'keys', 'asset'],
+};
+
+const accountEncoded = codec.encode(testSchema, account);
+
+suite
+	.add('Encode Lisk account', () => {
+		codec.encode(testSchema, account);
+	})
+	.add('Decode Lisk account', () => {
+		codec.decode(testSchema, accountEncoded);
+	})
+	.on('cycle', function(event) {
+		console.log(String(event.target));
+	})
+	.run({ async: false });
diff --git a/elements/lisk-codec/benchmark/encode_decode_biggest_lisk_transaction.js b/elements/lisk-codec/benchmark/encode_decode_biggest_lisk_transaction.js
new file mode 100644
index 00000000000..5f74dd58f3d
--- /dev/null
+++ b/elements/lisk-codec/benchmark/encode_decode_biggest_lisk_transaction.js
@@ -0,0 +1,100 @@
+/*
+ * Copyright © 2020 Lisk Foundation
+ *
+ * See the LICENSE file at the top-level directory of this distribution
+ * for licensing information.
+ *
+ * Unless otherwise agreed in a custom licensing agreement with the Lisk Foundation,
+ * no part of this software, including this file, may be copied, modified,
+ * propagated, or distributed except according to the terms contained in the
+ * LICENSE file.
+ *
+ * Removal or modification of this copyright notice is prohibited.
+ */
+const crypto = require('crypto');
+
+const { Suite } = require('benchmark');
+const { codec } = require('../dist-node/codec');
+
+const suite = new Suite();
+
+
+const mandatoryKeys = [...Array(44).keys()].map(() => crypto.randomBytes(32));
+const optionalKeys = [...Array(20).keys()].map(() => crypto.randomBytes(32));
+const signatures = [...Array(65).keys()].map(() => crypto.randomBytes(64));
+
+
+const biggestMultisigTransactionRegistration = {
+	senderPublicKey: Buffer.from(
+		'0b211fce4b615083701cb8a8c99407e464b2f9aa4f367095322de1b77e5fcfbe',
+		'hex',
+	),
+	nonce: 1,
+	fee: BigInt(1500000000),
+	type: 12,
+	asset: {
+		mandatoryKeys,
+		optionalKeys,
+		numberOfSignatures: 44,
+	},
+	signatures,
+};
+
+const testSchema = {
+	$id: 'testSchema',
+	type: 'object',
+	properties: {
+		senderPublicKey: { fieldNumber: 1, dataType: 'bytes' },
+		nonce: { fieldNumber: 2, dataType: 'uint32' },
+		free: { fieldNumber: 3, dataType: 'uint64' },
+		type: { fieldNumber: 4, dataType: 'uint32' },
+		asset: {
+			type: 'object',
+			fieldNumber: 5,
+			properties: {
+				numberOfSignatures: {
+					dataType: 'uint32',
+					fieldNumber: 1,
+				},
+				mandatoryKeys: {
+					fieldNumber: 2,
+					type: 'array',
+					items: {
+						dataType: 'bytes',
+					},
+				},
+				optionalKeys: {
+					fieldNumber: 3,
+					type: 'array',
+					items: {
+						dataType: 'bytes',
+					},
+				},
+			},
+		},
+		signatures: {
+			fieldNumber: 6,
+			type: 'array',
+			items: {
+				dataType: 'bytes',
+			},
+		},
+	},
+};
+
+const biggestMultisigTransactionRegistrationEncoded = codec.encode(
+	testSchema,
+	biggestMultisigTransactionRegistration,
+);
+
+suite
+	.add('Encode biggest possible Lisk transaction', () => {
+		codec.encode(testSchema, biggestMultisigTransactionRegistration);
+	})
+	.add('Decode biggest possible Lisk transaction', () => {
+		codec.decode(testSchema, biggestMultisigTransactionRegistrationEncoded);
+	})
+	.on('cycle', function(event) {
+		console.log(String(event.target));
+	})
+	.run({ async: false });
diff --git a/elements/lisk-codec/benchmark/encode_decode_full_block.js b/elements/lisk-codec/benchmark/encode_decode_full_block.js
new file mode 100644
index 00000000000..9b87007dd2b
--- /dev/null
+++ b/elements/lisk-codec/benchmark/encode_decode_full_block.js
@@ -0,0 +1,53 @@
+/*
+ * Copyright © 2020 Lisk Foundation
+ *
+ * See the LICENSE file at the top-level directory of this distribution
+ * for licensing information.
+ *
+ * Unless otherwise agreed in a custom licensing agreement with the Lisk Foundation,
+ * no part of this software, including this file, may be copied, modified,
+ * propagated, or distributed except according to the terms contained in the
+ * LICENSE file.
+ *
+ * Removal or modification of this copyright notice is prohibited.
+ */
+const crypto = require('crypto');
+
+const { Suite } = require('benchmark');
+const { codec } = require('../dist-node/codec');
+
+const payload = [...Array(65).keys()].map(() => crypto.randomBytes(220));
+
+const suite = new Suite();
+
+const block = {
+	header: Buffer.from(
+		'ba7816bf8f01cfea414140de5dae2223b00361a396177a9cb410ff61f20015ad',
+		'hex',
+	),
+	payload,
+};
+
+const testSchema = {
+	$id: 'blockSchema',
+	type: 'object',
+	properties: {
+		header: { dataType: 'bytes', fieldNumber: 1 },
+		payload: { type: 'array', items: { dataType: 'bytes' }, fieldNumber: 2 },
+	},
+	required: ['header', 'payload'],
+};
+
+const blockEncoded = codec.encode(testSchema, block);
+
+suite
+	.add('Encode Lisk block', () => {
+		codec.encode(testSchema, block);
+	})
+	.add('Decode Lisk block', () => {
+		codec.decode(testSchema, blockEncoded);
+	})
+	.on('cycle', function(event) {
+		console.log(String(event.target));
+	})
+	.run({ async: false });
diff --git a/elements/lisk-codec/benchmark/encode_decode_small_lisk_transaction.js b/elements/lisk-codec/benchmark/encode_decode_small_lisk_transaction.js
new file mode 100644
index 00000000000..feb628b9623
--- /dev/null
+++ b/elements/lisk-codec/benchmark/encode_decode_small_lisk_transaction.js
@@ -0,0 +1,99 @@
+/*
+ * Copyright © 2020 Lisk Foundation
+ *
+ * See the LICENSE file at the top-level directory of this distribution
+ * for licensing information.
+ *
+ * Unless otherwise agreed in a custom licensing agreement with the Lisk Foundation,
+ * no part of this software, including this file, may be copied, modified,
+ * propagated, or distributed except according to the terms contained in the
+ * LICENSE file.
+ *
+ * Removal or modification of this copyright notice is prohibited.
+ */
+
+const { Suite } = require('benchmark');
+const { codec } = require('../dist-node/codec');
+
+const suite = new Suite();
+
+const transferLikeLiskTransaction = {
+	senderPublicKey: Buffer.from(
+		'0b211fce4b615083701cb8a8c99407e464b2f9aa4f367095322de1b77e5fcfbe',
+		'hex',
+	),
+	nonce: 1,
+	fee: BigInt(1500000000),
+	type: 8,
+	asset: {
+		amount: BigInt(15000000000),
+		recipientAddress: Buffer.from(
+			'0b811fce4b615883709cb8a8c99407e464b2f9aa4f367095322de1b87g5fdfb1',
+			'hex',
+		),
+		data: 'Test data',
+	},
+	signatures: [
+		Buffer.from(
+			'4d38666425327e3c950cef3d5d6bed86b7a32e32002651a49ed5dbd0143d9b2fe94d1aa970ff6492da8e174f844d3c4736f980b322d35b76903969c48375ad8a',
+			'hex',
+		),
+		Buffer.from(
+			'644abb27920144bb4e4a5030e77cbdc53ea03fb9dd4ecd9abb8a5653c581f766b4ca6f33ce5f603330959e2f8263ae187c35b1840a840107cb42899bf854db01',
+			'hex',
+		),
+	],
+};
+
+const testSchema = {
+	$id: 'testSchema',
+	type: 'object',
+	properties: {
+		senderPublicKey: { fieldNumber: 1, dataType: 'bytes' },
+		nonce: { fieldNumber: 2, dataType: 'uint32' },
+		free: { fieldNumber: 3, dataType: 'uint64' },
+		type: { fieldNumber: 4, dataType: 'uint32' },
+		asset: {
+			type: 'object',
+			fieldNumber: 5,
+			properties: {
+				amount: {
+					fieldNumber: 1,
+					dataType: 'uint64',
+				},
+				recipientAddress: {
+					fieldNumber: 2,
+					dataType: 'bytes',
+				},
+				data: {
+					fieldNumber: 3,
+					dataType: 'string',
+				},
+			},
+		},
+		signatures: {
+			fieldNumber: 6,
+			type: 'array',
+			items: {
+				dataType: 'bytes',
+			},
+		},
+	},
+};
+
+const transferLikeLiskTransactionEncoded = codec.encode(
+	testSchema,
+	transferLikeLiskTransaction,
+);
+
+suite
+	.add('Encode transfer like Lisk transaction', () => {
+		codec.encode(testSchema, transferLikeLiskTransaction);
+	})
+	.add('Decode transfer like Lisk transaction', () => {
+		codec.decode(testSchema, transferLikeLiskTransactionEncoded);
+	})
+	.on('cycle', function(event) {
+		console.log(String(event.target));
+	})
+	.run({ async: false });