diff --git a/consensus/policy/policy.go b/consensus/policy/policy.go
new file mode 100644
index 0000000..28e96f9
--- /dev/null
+++ b/consensus/policy/policy.go
@@ -0,0 +1,5 @@
+package policy
+
+const (
+	BlockMaxTransactionCount = 100
+)
diff --git a/pool/mempool.go b/pool/mempool.go
new file mode 100644
index 0000000..a5c8f47
--- /dev/null
+++ b/pool/mempool.go
@@ -0,0 +1,93 @@
+package pool
+
+import (
+	"encoding/hex"
+	"sort"
+	"sync"
+	"time"
+
+	"github.com/Secured-Finance/dione/consensus/policy"
+
+	"github.com/Secured-Finance/dione/types"
+
+	"github.com/Secured-Finance/dione/cache"
+)
+
+const (
+	DefaultTxTTL    = 10 * time.Minute
+	DefaultTxPrefix = "tx_"
+)
+
+type Mempool struct {
+	m             sync.RWMutex
+	cache         cache.Cache
+	txDescriptors []string // list of txs in cache
+}
+
+func NewMempool(c cache.Cache) (*Mempool, error) {
+	mp := &Mempool{
+		cache: c,
+	}
+
+	var txDesc []string
+	err := c.Get("tx_list", &txDesc)
+	if err != nil || err != cache.ErrNilValue {
+		return nil, err
+	}
+	mp.txDescriptors = txDesc
+
+	return mp, nil
+}
+
+func (mp *Mempool) StoreTx(tx *types.Transaction) error {
+	mp.m.Lock()
+	defer mp.m.Unlock()
+
+	hashStr := hex.EncodeToString(tx.Hash)
+	err := mp.cache.StoreWithTTL(DefaultTxPrefix+hashStr, tx, DefaultTxTTL)
+	mp.txDescriptors = append(mp.txDescriptors, hashStr)
+	mp.cache.Store("tx_list", mp.txDescriptors) // update tx list in cache
+	return err
+}
+
+func (mp *Mempool) GetTxsForNewBlock() []*types.Transaction {
+	mp.m.Lock()
+	defer mp.m.Unlock()
+
+	var txForBlock []*types.Transaction
+	var allTxs []*types.Transaction
+
+	for i, v := range mp.txDescriptors {
+		var tx types.Transaction
+		err := mp.cache.Get(DefaultTxPrefix+v, &tx)
+		if err != nil {
+			if err == cache.ErrNilValue {
+				// descriptor is broken
+				// delete it and update list
+				mp.txDescriptors = removeItemFromStringSlice(mp.txDescriptors, i)
+				mp.cache.Store("tx_list", mp.txDescriptors) // update tx list in cache
+			}
+			continue
+		}
+		allTxs = append(allTxs, &tx)
+	}
+	sort.Slice(allTxs, func(i, j int) bool {
+		return allTxs[i].Timestamp.Before(allTxs[j].Timestamp)
+	})
+
+	for i := 0; i < policy.BlockMaxTransactionCount; i++ {
+		if len(allTxs) == 0 {
+			break
+		}
+		tx := allTxs[0]     // get oldest tx
+		allTxs = allTxs[1:] // pop tx
+		txForBlock = append(txForBlock, tx)
+	}
+
+	return txForBlock
+}
+
+func removeItemFromStringSlice(s []string, i int) []string {
+	s[len(s)-1], s[i] = s[i], s[len(s)-1]
+	return s[:len(s)-1]
+}