The most scalable blockchain: ELROND
Creating real world use-cases. Extending blockchain technology and software throughout the world, giving the potential and the possibility to use it for any project.
These are just two main goals Elrond wants to “score” with its mission.
“Ambitious, but realistic and achievable”
After this short introduction, let’s go into the project that will make all this possible.
In this article we will cover:
-WHAT IS ELROND?
-TECHNOLOGY BEHIND ELROND
-USECASES AND TARGETS
-ELROND ADOPTION AND ECOSYSTEM
WHAT IS ELROND?
Elrond is called the “internet scale blockchain”. This introduces well its main strong points. In fact, Elrond comes out to solve performance problems of blockchain. So that, as a result of this input, a fast and scalable blockchain became the output; all surrounded by applications and a wide variety of use-cases.
Elrond wants therefore, proposing itself and making the first step, to what will be the next layer of Finance; People being able to exchange or send money everywhere in tie world, in an instant, at a fraction of a cost that we are paying now, while still promoting eco-sustainability — ->Elrond is in fact carbon-negative
and with a particular attention to the user, who therefore won’t need to learn “Rocket Science” — ->Interacting with the network through a super-wallet and Maiar products, all provided by Elrond.
After this incipit, let’s jump to something more specific
Elrond is a Layer-1 oriented to blockchain performance, good technology, Dapp and Smart Contracts development. Elrond it’s meant to be a programmable chain. It adopts a PoS (Proof of Stake) consensus algorithm, put in action by its native coin; eGLD (Elrond gold — electronic gold), which is used for standard use-cases of a L1, here some examples:
- Gas Fees paid with the coin
- Government
- Staking
Not going super deep on these. So basically:
- Gas Fees paid with the coin increase the demand for it and help keeping the network economy active
- Government could really help growing and incentivizing the community. We know a strong and United community is usually a parameter to a project success. Finally well-organized government who can bring important changes in the project, improving it, could determine the success of the same one
- Staking rewards users and people (stakeholders) who contribute to the network, helping to increase the chain security. Furthermore staking could bring to a Supply Shock; a removal of tokens from the circulating supply
TECHNOLOGY BEHIND ELROND
Elrond has a solid technology, highly performant and potentially capable of maintaining scalability together with security and decentralization — -> the so called “ Blockchain Trilemma”
So, the network tech consists of 3 main features which makes Elrond unique:
- Sharding
- Secure Proof of Stake
- Elrond VM
We will describe them in this same order
SHARDING
Sharding is responsible to make Elrond very performant, but what is Sharding?
Sharding is a concept that comes from data organization, this concept consists of splitting up data to make it secure and safe, but also making sure the resources possessed are capable of storing it.
When it comes to Crypto, Sharding refers to splitting up blockchains in different parts in order to speed up the management and the finalization of transactions and blocks.
Now let’s move to Elrond solution
Let’s start by saying that Elrond’ Sharding is a FULL SHARDING, which consists of:
- Network Sharding
- Transaction Sharding
- State Sharding
The communion of these, gives an increase in the throughput, a decrease in Fees, all without sacrificing security and decentralization.
ADAPTIVE STATE SHARDING
Elrond has developed its own Sharding System which makes it more efficient, reaching from 10k to 210k(in some tests) transactions/second. The Adaptive State Sharding is composed by a METACHAIN.
A MetaChain is a central chain with coordination functions. What makes it efficient, is the Adaption it acts in relation the network load. In fact Elrond manages a variable number of shards according to demand on the network.
This Adaptive State Sharding system reaches almost 0 LATENCY between shards; this is also possible thanks to a communication protocol that is among shards, responsible for the instant finalization of transactions.
SECURE PROOF OF STAKE
As we have previously said, Elrond is a PoS blockchain, but it has implemented its own consensus algorithm, known as Secure Proof of Stake.
What differs it from the standard PoS?
Well, it maintains a fundamental feature of standard PoS, that is; Nodes who validate blocks and transactions. What makes Elrond solution different is that Nodes (that are 3200), are distributed among each shard.
Every shard has its blocks, so Nodes validate blocks on the shard on which they are located. The choice of the Validator Node is randomic (with some kind of Reputation Score which is useful for maintaining security throughout the network) and the selection process is very short (under 100 milliseconds). Furthermore, every 24 hours a “Shuffle” occurs;
1/3 of validators are re-distributed to different shards
All this makes Elrond secure and fast.
Requirements to join the network; Validator and Delegator
VALIDATOR: To be a Validator a low-level hardware is enough, but 2.5K staked eGLD are needed.
DELEGATOR: To be a Delegator only 1 eGLD is enough
ELROND VM
Elrond VM stands for Elrond Virtual Machine. Elrond has therefore created its own virtual machine, which represents the technology behind Smart Contracts. This virtual machine is actually called Arwen VM. It has 3 main features which makes it interesting:
- MULTI-LANGUAGE VM: the Arwen VM it’s multi-language, in fact it utilizes Web Assembly (WASM) and therefore you can write Smart Contracts in different languages. So programming on Elrond is easier and more accessible; this could be then considered as an incentive for new devs, and so, as a consequence, it could scale the adoption of Elrond. Furthermore, Elrond VM is more efficient and has faster compute times than other the Virtual Machines
- EVM-COMPATIBLE: this VM is Ethereum-Compatible, so that means Elrond Smart Contracts solution offers the possibility for Ethereum ones to be implemented into Elrond, so this helps Inter-operability across the networks
- ESDT: Elrond wants to create a standard, the “Elrond Standard Digital Token”. It deals with the concept that native tokens shouldn’t be governed by Smart Contracts.
What does this mean?
This means that tokens, unlike Ethereum (which makes users interact with the smart contract of the token), will be Chain-Native, so you are not going to interact with any smart contract-token.
What is the advantage?
This token management could improve security, as well as lightening the network load, and make it (the network) clearer to be read.
TOKENOMICS
The tokenomics is scarcity-oriented and has similar points with Bitcoin.
Elrond has recently made a change in its tokenomics (it actually didn’t change it, but is more like a branding change since USD value remains the same). There’s been the shift from ERD (Elrond coin) to eGLD (Elrond Gold-Electronic Gold).
1000 ERD became 1 eGLD, so that eGLD brings its projected meaning and therefore scarcity.
Let’s see the main reason of this shift:
- Elrond wanted to more clearly convey that their asset is scarce and valuable — ->so this is a great marketing move
- they want eGLD to be a global reserve currency for the digital economy. As i previously said, Elrond is scarcity-oriented, in fact the branding adds value to how its tokenomics is built.
Let’s see where the scarcity is encouraged from
The scarcity is given by the Total Supply, that is limited to 31,4 million.
This capped Total Supply is projected to be reached in more or less 10 years. eGLD’s value increases together with the network adoption and so coin-demand.
Now validators fee is fixed, but, if adoption grows, validators will get paid by tx fees instead of network emission. So, the max. supply is remaining the same and tx fees will be subtracted from the emission. Then, the interesting thing about this design is that once again, scarcity is the focus. In fact the max. supply could even be much lower, according to network adoption.
USE-CASES AND TARGETS
As we have seen, Elrond is really ambitious, so let’s list some of its USE-CASES and targets:
-Dapps and Smart Contracts development
- Programmable Blockchain
- Blockchain accessibility
- Corporate Enterprise Partnerships
- Creation of a new financial system
- Building business on top of blockchain with simplicity
- Focus on UX/UI for a great user experience
- DeFi development
- Data Monetization
- Gaming
ELROND ADOPTION
This image well represents the adoption and ecosystem
CONCLUSION
Elrond is surely a network where everyone can enjoy the benefits of distributed system technology, in fact it gives a proper infrastructure to connect objectives and goals, like businesses or just a new standard for value transfer. This is one of the main strong pillars of Elrond; it gives the POSSIBILITY and the ACCESSIBILITY, that are fundamental values to reach the “mass-adoption”.
So, to conclude, Elrond will surely face many challenges, but also many successes and maybe the whole process/journey will bring, in a future, the fast, scalable and secure network for the digital economy of tomorrow.
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