1. What is Elrond Network ($EGLD) ? The internet scale carbon negative blockchain
Silently, Elrond Network (EGLD) is an ecosystem that is growing under the radar. Loved by some, hated by most, we will together look through what is the Elrond Blockchain. How this project is planning to achieve one of the most scalable blockchain ? The self-proclaimed internet scale blockchain aims to achieve mass mainstream adoption through its easy to use mobile phone wallet : Maiar.
2. How does the Elrond Blockchain work ?
The Elrond blockchain is a Layer One PoS (Proof of stake) blockchain using the Elrond Egold token (EGLD) as native token. You can use EGLD for everything: Transaction fees, stacking, smart contracts and staking rewards.
I found out that the Elrond Network is redesigning the standard PoS blockchain platform with 2 main features: The Adaptive State Sharding and the SPoS (Secure Proof of Stake). The Elrond blockchain aims to resolve scalability issues with these two technologies.
Elrond is designed to be able to process 15,000 TPS (Transaction per second) and to be able to scale up to 100,000 TPS (it is actually more than that). They have been able to achieve 265,000 TPS on the testnet. For reference, Bitcoin achieves 7 TPS and Visa 55,000 TPS.
The Adaptive State Sharding is the way Elrond use to be scalable to infinity.
To resume the Adaptive State Sharding, we need to have a look at what is sharding and also the 3 different sharding types it combines. Generally, you use sharding in databases to divide data among several machines. You divide the amount of work to do on several smaller machines making you able to process huge amounts of data at the same time -rather than on one big expensive machine-. Here are the 3 types of sharding the Elrond Blockchain uses :
- The Network sharding is used to group the nodes into shards, it enables blittering-fast transactions and messaging inside each shard.
- The Transaction sharding is the way of mapping how a transaction is sended to which shard to be processed
- The State sharding is the most difficult one to implement. Instead of having each node storing the entire state, here each shard is storing a part of the state to reduce the storage of each node. This reduces the time and cost of transactions because they are processed at the same time in different places.
The Secure Proof of Stake (SPoS) is the Elrond approach to PoS (Proof of Stake).
It is an innovation in the way of selecting validator nodes for consensus. For each round, you choose a random validator using the last block signature + proposer and you designate it as the new ‘Block Proposer’. Afterwards, this validator can then produce a block that will need to be validated by the consensus group (other validators). The safety of this technology resides in the fact that rounds are so fast and the protocol of block proposer so random that it is impossible for a malicious actor to try to influence the proposed block.
Other main features :
- The WASM VM : The Elrond virtual machine called Arwen runs WebAssembly (WASM) which means that it can execute smart contracts written in any language after the bytecode compilation
- Cross Shard Transactions : Each block is composed of a header and miniblocks that contains cross shard transactions
- First carbon negative blockchain through carbon offsetting
3. What are the Elrond Blockchain Tokenomics ?
The Elrond Egold is designed to be the best of all worlds between real gold and fiat money :
You can use $EGLD as an utility token to exchange, store and transfer digital value with fast and costless transactions.
The initial circulating supply at launch is 20,000,000 but the maximum theoretical supply is 31,415,926 EGLD. The team came up with the idea of decreasing that theoretical maximum supply, which will then never be reached, with every transaction fee. To be more specific, you remove the fees collected over a year from the planified inflation. If the fees are higher than the minimum guaranteed inflation (ie: guaranteed staking rewards), then the inflation will be equal to 0 and the fees distributed accordingly.
Indeed, the more adoption, the more transactions, the more Elrond will be deflationary but that means as well that Elrond needs growth in the future to survive.
4. What about Elrond’s Blockchain team ?
The Romanian team has achieved a lot over the last year and is supported by many well known advisors and supporters such as Alex Iskold, Julien Bouteloup, or Ethereum developers.
5. What are the challenges ahead?
The two main next challenges announced by the team are the On-Chain Governance and the DeFi 2.0 Module.
The On-Chain Governance will allow people using the network to vote for important ecosystem decisions and then take part in the future of the protocol. This is the last step to take for a 100% decentralized chain.
The DeFi 2.0 Module is set to be the backbone of future DeFi protocols making it easier for developers to launch projects.
In my opinion, I would say that the team needs to get the Mex and LkMex tokenomics 2.0 sorted as the official dex-token keeps falling because it’s being dumped by so many. With nearly 0 utility for now and huge farming rewards, it is going down the same downhill slope as many other AMM tokens.
Also, as a young ecosystem, Elrond is missing a lot of features to be implemented. I’m thinking of several bridges, Stablecoins, Borrowing and Lending, Synthetics or Yield Optimizers.
Altough, Elrond has recently acquired Twispay (a famous Visa member). This decision is the start of the bridge between traditional finance and crypto as the licensed institution has received authorization to provide payment services and issue electronic money by the National Bank of Romania. Eventually, you can see this as a sign of a potential Maiar credit card incoming.
6. What are the supported wallets for Elrond blockchain ?
You can use any of these 4 supported wallets to secure your Elrond ERD addresses :
- Browser wallet : Maiar Web Wallet
- Maiar Web Wallet browser extension
- App for IOS or Android : Maiar
The Maiar app is for me the most gamechanger thing about the Elrond ecosystem. While all other wallet options are classic ones, the Maiar app redefines the crypto user experience. We all had some problems with crypto wallets and I must admit that since I discovered Maiair it has always been smooth and very user friendly. In the style of Lydia -or any other new gen banking apps- it simplifies the way we interact with money to the strict minimum.
The main feature is that you have the possibility to implement a Herotag (Pseudonym) for your wallet that is linked to your adress and that will be used for transferring money as easily as sending a message. I am in love with the Maiar app because it is just so fast and easy, just type your friend HT and you are sorted ! Simplifying the interactions for muggles, adding social networks features is for me a massive leap to mainstream adoption.
The app includes: send and receive, buy from fiat, stacking, NFTs, general stacking and adoption stats, and a Web3 thread where you can follow your friends NFT activity.
You can download the Maiar app through our affiliate link and earn 10$ EGLD in cashback ! Click here !
7. How can I stake Elrond $EGLD ?
Staking through the Maiar app is as easy as sending EGLD to someone. Open the app, press stake, choose a staking provider and send them the amount of EGLD you would like to stake. Literally a 1 minute move even for beginners. The average APR is 9-10% and the undelegating time is 10 days. Also, we can see that almost 61% of the available EGLD are curently staked.
8. Elrond $EGLD as an investment
After reaching its ATH of 490$ in november 2021, Elrond’s highest price has now suffered this bear market. Elrond price is now 55$, which is looking as a nice entry point for someone looking for a long term investment. Don’t forget to DYOR (Do Your Own Research) as we are not financial advisors.
Right now it is currently ranking #40 of all blockchains market caps with approximately 1.3B$.
Here is what the price would be if Elrond had the market cap of Solana. Keep in mind that we need a huge amount of building and activity to achieve this market cap. Don’t forget we are in bear market as well.
9. What to buy on the Elrond blockchain
There is a lot of building currently on Elrond. I will come back in another article about these projects so here will be a quick general view of what’s hot:
Official Dex : Maiar Exchange
Official Eth<>EGLD Bridge : Ad Astra Portal
Official Launchpad : Maiar Launchpad
Professional NFTs analytics : Omniscient Tools
NFTs P2P Swaps with Borrowing and Lending : Elrond NFT Swaps
10. Testimonies about the elrond blockchain
I’ve been asking Elrond influencers about why do they love this blockchain and here are their answers :
From Mibbay (@Mibayy13)
From Opium (@Opium_Off)
Fom LaBananeCrypto (@laBananeCrypto)
Thanks everybody for your time !
11. Why is Elrond EGLD hated?
Surprisingly, I found out Elrond is hated by a huge amount of people over Crypto Twitter. I can tell that some Egld investors on the French side of CT are a bit virulent and obsessed with it and that feels a bit strange to see people becoming maxis so fast.
One of the main reasons Elrond is hated is that one of the biggest validators with 773 nodes and 22% (3 millions EGLD) of the total staked EGLD belongs to the team but it is planned and they are slowly decreasing this percentage every year.
Elrond is said to be very centralized whereas it has 3200 validators -same as Cardano- which is more than many other PoS chains. It just lacks -for the moment- a decentralized governance.
One real fact though is that the team is always late on their announcements. Any of the last planned milestones were delayed by at least a few weeks. I can understand it is frustrating for investors that have now lost trust about the team dates drops. I found out that the “SOON” meme is a thing among Elrond Community, traducing the recurrence of delayed dates.
One last thing with the hate about Elrond I heard is its name. Elrond and Maiar names originally come from the Tolkien lore and feels like a meme name for a crypto asset that wants to be a serious game changer. I belive people forgot about the RocketShibaElonMoon times. I also found another answer from Reddit that will suit haters that don’t want to do any research.
Undeniabely, Elrond user experience should be a model for any other blockchain because massive adoption of cryptocurrencies will come through simplification. Do you see yourself explaining to your grandparents why you are splitting your LP token to avoid Impermanent Loss because one of the two assets is falling? There is still a lot to do in this way and I believe that Elrond are for the moment the leaders of simplification. Less is more.
NB: This is not a financial advice.