New Staking Opportunity and Mainnet Launch Preparation
- 4th of July — mainnet date will be announced & Genesis Staking 2.0 begins
- Elrond supply shifts to Bitcoin model: fixed max supply, reached in < 10 Years
- New staking cap increased by 1,672,500,000 ERD
- Competitive APR stays the same: 25% before mainnet, 29% Delegator, 36% Validator
- 1,122,500,000 ERD additional for Delegation
- 550,000,000 ERD additional for Validators: +220 nodes
- Team & Private Sale investors commit to stake unlocked tokens
Since we announced the pre-staking phase at the beginning of this year, and more recently, the Genesis staking, we have seen tremendous interest from validators and delegators, wanting to be part of the transformative journey starting with the Genesis of the Elrond blockchain.
The launch of the Battle of Nodes competition, where we stress-test the limits of the blockchain before the Mainnet launch, amplified the interest in Elrond’s robust technology, underscoring what it means to scale blockchain processing capacity to achieve internet performance.
The interest and support from the community for both the Genesis staking and BoN exceeded our expectations, resulting in staking caps being filled rapidly. Indeed, hundreds of requests have been coming our way from people interested in an increase of the delegation cap and number validator nodes run at Genesis.
Humbled by this interest and want to take a moment to say thank you for your support. After several internal discussions, we have come with a solution to help accommodate this interest, enabling even more people to be part of the Elrond Genesis launch.
Be Part of The Genesis: A Unique Opportunity
First, let’s remove any concerns regarding the two most relevant points already announced:
- The price per node at genesis launch will remain the same: 2 500 000 ERD.
- The initial announced APR also remains the same: rewards for staking before Mainnet stay at 25%. After launch, they stay at 36% for validators, and for 29% for delegators.
As previously mentioned, an Auction SC will be deployed ~2–3 months after the mainnet launch, dynamically determining the optimal stake/node ratio, with the APR for staking evolving as demand for Elrond staking continues to increase. Once the auction is enabled, all staking caps will be removed, enabling anyone to stake or delegate as much as they want directly to the auction contract.
Thus, to accommodate the considerable demand we have seen, we are increasing the overall staking cap with 1,672,500,000 ERD, moving from 3,750,000,000 ERD to 5,422,500 000 ERD, and from 1,500 to 2,169 nodes.
The newly added sum will be split between delegators and validators as follows:
- 1 122 500 000 ERD will be available for delegation.
- And 550 000 000 ERD will be available for validators.
To most efficiently accommodate this increase in the number of nodes, the network will include an additional shard at the mainnet launch, being formed of 4 shards: 1 metachain and 3 shards.
The implementation of this new delegation slot for the community will be done via a second staking contract, deployed in parallel to the existing one. Each contract will have its own delegation cap and instructions, but both will facilitate the bridge to the Elrond Genesis.
The increase in the number of Validator nodes will use the already deployed smart contract, and will just update the cap for the number of nodes allowed to be whitelisted.
Economics Update: The Necessity of Bootstrapping and Sustainable Growth
After an in-depth evaluation of the matter, in order to support the increase of the staking caps while still preserving the competitive rewards necessary for bootstrapping, we have come up with an update to the Elrond economics model. Note that the spirit of our original idea remains the same, but as we get closer to the launch and have a much higher resolution view of various specific details, we will be sensible to changes required, and will strive to solve the problems in the most creative ways.
The most consequential chapters of the Elrond economics model are (1) the bootstrapping process meant to achieve escape velocity and gather a sufficiently large community around the Elrond network, and transition from this bootstrapping period to (2) a sustainable growth model.
While a detailed map of the economics model will be presented in the updated economics paper, here is an overview of the immediately relevant changes of the model:
- Elrond will have a cap to the maximum total supply.
- The issuance rate will decrease every year, reaching zero new issuance in year 10. No other ERD will be issued after year 10.
- Perhaps even more important is that in Elrond’s model, an increase in fees accumulated via transactions processed, will immediately be reflected in the decrease of the issuance rate.
To better underscore the built-in transition from bootstrapping to sustainable growth, here is an overview of how rewards are calculated in Elrond:
- A minimum guaranteed network-wide staking reward is set per year.
- The minimum guaranteed reward will come from (1) fees and (2) issuance.
- If the cumulative sum of fees during one year is higher than the minimum guaranteed staking rewards, the issuance rate becomes zero, and the distributed staking rewards will be higher than the minimum guaranteed rewards. Otherwise, total fees will just decrease the issuance by the corresponding amount.
- To most effectively emphasize both bootstrapping and sustainability, the maximum issuance rate per year, assuming fees are zero, will be capped as follows:
- 10.84% of the total supply in the first year.
- 8.75% of the total supply in the second year.
- 7.10% of the total supply in the third year.
- ….
- 0% in the 10th year.
By using this approach, we have created the premises for a strong initial network growth via validators, and also the transition to a very robust deflationary monetary system that becomes sustainable via adoption and usage of the network. An updated calculator for validators is available here.
Commitment And Proactive Transparency
When we started Elrond, we envisioned a world where blockchains would have such a profound impact, that they would become the most important global GDP multiplier technology beyond the internet itself. To see these results and achieve the vision, we understood that we needed to build a new blockchain from scratch, that can accommodate internet-scale performance, and remove the limitations of current blockchain iterations. Thus, we gathered a team with which we can literally build rockets, who believes in this vision, and is here for the long term.
One year ago, after closing the private round, we announced that the Elrond team vesting is extended to 3.5 years. To reinforce our long term commitment, our entire team agreed to reiterate its support by announcing that the next unlock will be directed to staking or delegation, further strengthening the support of the network.
Furthermore, given that there will be a token unlock for the initial investors and community members on the 4th of July, we have prepared a great staking opportunity to enable an easy transition to genesis staking for all of them. Demand for staking has been very high, and several of our investors have already committed to staking their tokens for genesis.
The Road Ahead: to Mainnet And Beyond
For more than 2.5 years we’ve been working hard to reach this point. In many ways, for our team, community, and investors, the Genesis of the Elrond network marks a major achievement, delivering an elegant and sophisticated technology tool above the one we set out to build. While this will be of increasing significance for the whole blockchain space, it is actually just the beginning for the Elrond ecosystem. Years from now, we will look back at this moment, as the instrumental transition from a promising but experimental technology, to the most important technology of the decades that followed.
On the 4th of July, the precise date of the mainnet launch will be announced, and the genesis staking 2.0 will begin.
This is your chance to be part of the Elrond mainnet launch.
Be sure to make the most of it.
About Elrond
Elrond is a new blockchain architecture, designed from scratch to bring a 1000-fold cumulative improvement in throughput and execution speed. To achieve this, Elrond introduces two key innovations: a novel Adaptive State Sharding mechanism, and a Secure Proof of Stake (PoS) algorithm, enabling linear scalability with a fast, efficient, and secure consensus mechanism. Thus, Elrond can process upwards of 10,000 transactions per second (TPS), with 5-second latency, and negligible cost, attempting to become the backbone of a permissionless, borderless, globally accessible internet economy.
For more information, please visit us:
Disclaimer: Nothing in this article or elrond.com website is an offer to sell, or the solicitation of an offer to buy, any tokens. Elrond is publishing this post solely to receive feedback and comments from the public. Nothing in this post should be treated or read as a guarantee or promise of how Elrond’s business or the tokens will develop or of the utility or value of the tokens. This post and elrond.com website outlines current plans, which could change at its discretion, and the success of which will depend on many factors outside Elrond’s control, including market-based factors and factors within the data and cryptocurrency industries, among others. Tokens may lose value, including all value. Any statements about future events are based solely on Elrond’s analysis of the issues described in this post or elrond.com website. That analysis may prove to be incorrect.
