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Elrond is a project that has received a lot of attention lately. Like many other projects before them, they focus on evolution. When I say a little attention, I mean a jump of over 5000% in the value of its ERD cryptocurrency in less than 4 months! This was in early 2020, between mid-March and the launch of Elrond's core network in July 2020.
However, in September 2020, the ERD cryptocurrency underwent a change with the transition to the new eGLD, or eGold cryptocurrency. In addition to becoming the native cryptocurrency of the Elrond blockchain (all ERC-20 and BEP-2 tokens have been traded), with a ratio of 1.000 ERD to 1 eGLD.
Also note that the eGLD token has also seen an increase of around 300% in the 5 months since its release.
Transaction speed and throughput is perhaps one of the biggest concerns facing some of the largest blockchains today. We've all seen gas costs and the inevitable frustrations that come with low yields and slow transactions.
Still, with so many competing solutions, is it worth it for Elrond? Can anyone justify the huge price spike of him that came in response to the official launch of the Elrond blockchain? Given that after a short period of taking profits on the token, it has resumed its upward trend, it seems that it is justified for Pro Elrond investors.
In this review of Elrond and his application Maiar, I will give you everything you need to know about the project. I'll also take a look at the long-term outlook for the eGLD token.
What is Elrond?
The Elrond Network is a public blockchain created to provide high-level evolution and high throughput. The goal is to create a decentralized network that can provide the same or better performance than centralized networks, while offering users greater security and anonymity.
The Elrond network expects to achieve these goals through its unique Adaptive State Sharding technology and using the Secure Proof of Stake (SPoS) consensus mechanism.
Elrond network architecture
The Elrond network has several key elements that make up its blockchain structure.
Nodes and users: these are the two main pieces that make the network work. Users transact on the network, both as a transfer of value and as the execution of a smart contract. Nodes are the devices on the network that actively and passively process these transactions.
Validator: These are special types of nodes that provide block generation and consensus building in exchange for rewards. Validators are required to retain tokens to become eligible and are then nominated by other interested parties. Other special types of knots are observers and fishermen, which we will describe later.
Shards: These are smaller partitions of the Elrond network and are used for scaling: each partition is responsible for a part of the state (accounts, smart contracts, blockchain) and transaction processing, so that each partition can only process a fraction transactions in parallel with other partitions.
Metachain: The Metachain is the blockchain that operates in a special Shards, where the main responsibilities are not the processing of transactions, but the finalization of the block headers of the processed partitions, facilitating the communication between the partitions, the storage and maintenance of a register of validators.
eGLD tokens: The eGLD token is what powers the network, acting as an entry point for the network, and providing the means to pay for transactions, App distribution, storage, smart contract execution and rewards to validators . The transaction fees are split between the validators and the Elrond Community Fund.
Adaptive State Partition Technology
Adaptive state partitioning is a unique way of using partition technology, and while it has long been a database optimization technique, it has recently been introduced in blockchain applications. Partition tree structure and fragment redundancy
Elrond uses adaptive state partitioning to achieve a number of key goals:
The network will be able to maintain scalability without affecting the availability of the network. This means that no matter how many transactions there are on the network, it shouldn't have an impact on status updates or network availability.
The determination of the destination of transactions is easily calculated and determined through the partitioning solution, leading to traceability and instant delivery.
The scalability of the network means that partitions always remain balanced.
The state partitioning solution used by Elrond means that changes in demand are handled without impacting network security.
Proof of secure consent of the stakes (SPoS)
The SPoS consensus mechanism used by Elrond was developed to enhance existing proof of stake solutions. It reduces latency in the network and allows any Shards node to determine which members will be in the consensus group.
Randomization is provided by the aggregate signature of the last block. Elrond's team estimates that this reduces the time it takes to elect a consensus group to less than 100ms.
Graphical representation of Elrond Sharding.
Elrond introduces the Bellare and Neven multiple signature system which was designed to reduce the number of communication rounds required in the signature algorithm.
As a more sophisticated version of Proof of Stake, it aims to ensure the distribution of partitions fairly, is a trade-off between increasing energy and compute requirements and security.
Roles of the Elrond network
Validator: Validators are Elrond network nodes that process transactions and protect the network by participating in the consensus mechanism, while earning rewards from the protocol and transaction fees. To be part of the Elrond network, a validator must constitute a guarantee in the form of EGLD tokens, which are stored.
Observer: Observers are passive members of the network that can act as a read and relay interface. Observers are not required to wager EGLD tokens to join the network and are not rewarded for their participation.
“Fishermen”: a node that checks the validity of blocks after they have been offered. They check for invalid blocks resulting from the adversity of malicious actors and are rewarded for their service. The role of fishermen can be played by validators who are not part of the current consensus cycle or by observers.
Elrond network performance
Elrond launched its core network on July 30, 2020. Developers seek to create a blockchain that is at the heart of a global, borderless and fully accessible digital economy.
This can be achieved by making Elrond a platform that uses a scalable value transfer protocol and easy deployment of decentralized applications (Apps). The first App called Maiar was launched in parallel with the launch of the main network. Maiar is a cryptocurrency wallet that has a number of characteristics and with the broader objectives of Elrond.
One of the main features offered by Elrond is its near instantaneous transaction performance and linear scaling that will allow the network to grow. Elrond's website claims the network can handle 250.000 transactions per second, and Elrond Adaptive State Sharding allows up to 260.000 GST according to their recent testnet results.
The platform also has reduced storage requirements and improved linear scalability as more and more nodes join the network.
mobile application maar
Elrond just launched Maiar and it could make global payments a lot easier and cheaper. The company managed to build a market cap of nearly $ 1 billion in just three years, and is now working to give the world's citizens the best payment options available.
Elrond CEO Beniamin Mincu said,
“Money is humanity's best attempt to make something that is fundamentally immutable: our time. We built Maiar to help you recover it ”.
In fact, Elrond has been working a lot over the past few years. Maiar is both a mobile wallet and a payment app that opens doors that other payment platforms like PayPal simply won't address.
The Elrond blockchain is capable of processing more than 250.000 transactions per second, and maar make the most of this technology.
People no longer need to deal with banks that are very slow and unresponsive to their customers.
maar is designed to be used by a smartphone, a technology that is now in the hands of almost everyone.
With this high-speed payment technology, people all over the world (wherever they have access to the internet) have the opportunity to use a far superior payment system.
According to Beniamin Mincu,
"Billions of people are able to send direct messages to their contacts because it is convenient, intuitive and inexpensive ... maar and the Elrond blockchain now offer them the same experience when it comes to sending money ”.
The world has gotten smaller but the banking system seems to be bigger than ever.
Indeed, money is a given and nothing more.
With a payment platform such as maar, people don't need to deal with a bank that is very slow and doesn't even give them the ability to hold money directly.
It may not be a popular topic, but banks don't actually give people the ability to hold money. Conversely, when a bank takes a person's money, it is effectively the bank's property.
As long as a transaction is processed by a bank, the money in question is owned by the banking system. People have put up with this system out of necessity and ignorance, but now there are other options.
It is time to find better solutions
More than 200.000 people have already signed up for maar and it's not hard to see why.
When it is possible to carry out banking transactions with a smartphone, the days of the banks as we know them today will be numbered.
It's very simple, Elrond has found a market that is looking for better options, and as Beniamin Mincu pointed out, people move tons of data around the world with mobile devices every day.
Now, with Maiar, that data can convey value, and give people better options when it comes to sending value around the world in a very short time.
Anyone who wants to download the application maar can do this from both the Google Play Store and the Apple App Store. Money has indeed been digital for a long time, but now it is moving to private platforms that people trust.
Maiar is one of the companies that understands that people should have more control over the fruits of their hard work and be able to transfer value on their terms.
The world of banking is changing, and people everywhere can benefit from the kind of changes that Elrond is creating.
Benjamin Mincu, founder and CEO of Elrond, called the Maiar mobile application "a gateway for the unbanked", noting that "a large population of the world is unbanked, without access to existing financial infrastructure, and therefore their opportunities to participate in the wealth creation is extremely limited ”.
maar it is first and foremost an ultra-fast, privacy-focused browser, but it will also have a wealth of useful features. These include the ability to store, hold, send and receive eGLD tokens. Users will also be able to purchase eGLD tokens directly from the wallet using over 150 different fiat currencies.
Elrond app maar on the Apple iTunes Store
Maiar was positively received from the start, with a 4,4-star rating on Google Play, and a 5-star rating on the Apple App Store. Unlike many new Maiars it is fully developed at launch, with few bugs. It has a clean and easy-to-understand interface that is meant to make adoption by new users as easy as possible.
Stake out eGLD
At the genesis of the main net, Elrond implemented a closed system of poles and proxies to help bootstrap the main net.
In addition to creating a larger community, closed staking and delegation were designed to create cost-effective security against network attacks.
Once this was completed, the network moved on to a four-step transition of stakeout and delegation as follows:
Phase 1 - Queue of incentivized delegation
Phase 2 - Validation queue
Phase 3 - Open stakeout
Step 4 - Advanced stakeout features
Phase 1 (activated on 14 October 2020)
The first phase created a queue for community members to delegate eGLD tokens and reserve a seat in the queue, subsequently receiving rewards for their time in the queue. In phase 1, existing delegates also had the option to withdraw their proxy, allowing front row members to replace them. In phase 1, a minimum of 10 eGLDs were required to join the queue.
In the first phase, the delegation was made to the nodes of the Elrond community. The subsequent phases open the delegation to the suppliers of impalement services.
Phase 2 (activated on 1st December 2020)
Phase 2 introduces a feature that allows any validator to stage. Existing validators trying to add new nodes and new validators trying to create their first node were able to join the queue by aiming for 2.500 eGLDs per node.
The queuing system was used to keep a list of new nodes wishing to join the network so that when an existing node did not take a new node it was able to replace it on a 1: 1 basis in the queue. This was done to ensure that the number of nodes does not drop below 1920, allowing for 3 Shards and 1 metachain. It also allows a minimum of 80 additional nodes on the queue for additional partitions. In phase 2, the annual yield is kept at a maximum of 20%.
Stages 3 and 4
Phases 3 and 4 were to be launched 4-6 weeks after the launch of phase 2, but in early February 2021 we are still awaiting these next phases. Once activated, they will allow for an increase in the number of nodes, the ability to bet more than 2500 eGLDs per node, open delegation and a new auction system.
The transition to these stages is also expected to be the community's first blockchain vote.
How can I bet on Elrond EGLD?
Elrond eGold (EGLD) holders are encouraged to support the Elrond network. They do this by staking and locking their EGLD in a smart contract while earning rewards by delegating a minimum of 10 eGolds or managing a validation node plus a stake of 2.500 eGold.
EGLD Elrond at play
The rewards of the validators are distributed automatically. While rewards for delegates can be claimed once a day, with no time limit. You can use their calculator to calculate your annual percentage return. It also gives you the daily, weekly and monthly breakdown based on the number of chips you have wagered.
You can withdraw your wagered EGLDs at any time. However, a 10 day holding period applies.
What is the minimum bet in eGold?
For delegates wagering their eGold Elrond tokens, there is a minimum of 10 eGold (EGLD), with no maximum.
What is Elrond's waiting list?
The Elrond network is currently in boot mode and the stakeout options are gradually being activated. At the time of writing this Elrond review, your tokens initially go into an incentive queue, called the “Waiting List” where you can get up to 20% return per year.
The Elrond team
Elrond is fortunate to have a team that includes professionals with a technical and entrepreneurial background.
The managing director of the project is Benjamin Mincu. He has led the marketing, business and community building efforts to make NEM a global blockchain product.
Elrond's CIO is Lucian Mincu, an engineer with 8 years of experience designing complex infrastructure and network solutions for clients such as the German government.
Some members of Elrond's team
Elrond's COO is Lucian Todea, an entrepreneur with over 15 years of experience in technology investments and active in blockchain startups.
All of this has given him significant experience in management, business development, leadership and investment. In addition to his role in Elrond, he is also the CEO, partner and founder of several tech startups.
The full team consists of 24 technology and business professionals, who bring a wealth of experience and expertise to the Elrond Network project. There are 7 other project consultants who bring even more technical experience to Elrond.
Elrond community
The size and enthusiasm of a community can have a direct impact on the awareness and adoption of a cryptocurrency project. They have an impact on marketing and overall trading volumes.
So I decided to take a closer look at the community behind Elrond.
First, they have a Telegram group with over 29.000 members.
Convocation in Elrond's telegram
Secondly, as far as traditional social media is concerned, it appears that they only have one Twitter account. With over 138.000 followers, it can be said that Elrond has generated a lot of interest since the launch of their core network.
In addition, the team is very active on their Twitter and shares helpful updates on the project. They also have an official blog that keeps their community informed.
The ERD token
The ERD token was used to power the Elrond network, and was the second token launched on the launchpad of Binance. The initial lottery-style stock offering closed on July 1, with the Elrond network raising $ 3,25 million. This sale offered 5 billion DRE tokens, or 25% of the total supply of 20 billion tokens.
The DRE token was a BEP-2 token as the network moved to a process. Since the launch of the core network, the Elrond team has announced a radical change to the token business model, which I will discuss in more detail below.
The DRE tokens were sold for $ 0,00065 each during the IEO, with the holders of the winning lottery tickets receiving DRE 461.538,61, worth $ 300. There were a total of 10,833 winning lottery tickets.
DRE price performance.
The price of DRE initially rose after the IEO, trading above the $ 0,007 level. It fell from its highs and has been volatile ever since, trading between $ 0,0027 and $ 0,0075.
As of August 5, 2019, the price was $ 0,002953, giving lottery winners a return of more than 4 times their bet.
That was just the beginning. In 2020, the DRE token dropped to a low of $ 0,000569 on March 13. From there, the excitement for the upcoming main launch began and the DRE price went up, gaining over 5100%.
The current all-time high for the token was $ 0,029489 reached on July 27, 2020. The price fell after the mainnet launch, but was still standing at $ 0,024 in early August 2020.
Mainnet launch and Tokenomics change
While the mainnet launch itself was obviously a big deal, the biggest announcement was Elrond's symbolic economic shift. The team made the decision to drastically reduce the total supply of DRE tokens from 20 billion to just 20 million.
Furthermore, they also announced that over the next ten years there will be a maximum of 11.415.927 new tokens issued. Thus, the total maximum supply is now 31.415.927, which is significantly better than the old model. After ten years, no more tokens will be issued.
The shift was made to adopt a deflationary economic model, and to build a more robust currency that could eventually become the world's digital reserve currency.
The change is expected to allow the token to serve as a low-cost unit of account and a staking asset for the time being, while gradually lowering its stock flow, which will encourage users to keep ELD in their wallets and use it as cash.
Conversion of ELD tokens into eGLD.
Another change is to migrate the current ERC-20 and BEP-2 ERD tokens to a new native eGLD token which will be trading at a rate of 1.000: 1. This means 1.000 ERD tokens will be exchanged for 1 eGLD token.
The value of eGLD will be 1.000 times that of ERD. So if ERD is trading at $ 0,025 on the conversion date, this means that 1 eGLD will be worth $ 25,00. The ERD to eGLD exchange was announced on August 28, 2020, and the eGLD token began trading on September 3, 2020, while the actual token exchange began on September 4, 2020.
An overview of the eGLD
By changing the native currency of the Elrond network so drastically, one can imagine that the Elrond team had very good reasons for doing so.
So here's an overview of the most important features of the eGLD:
1. Designed for simplicity and global adoption.
When we look at the adoption of blockchain technology and cryptocurrencies, the biggest obstacle has been the inherent complexity of the new technology. Elrond's team saw this hurdle with ERD and knew that to reach over a billion people, they needed to completely rethink and redesign.
2. Digital pool of value and global pool.
When Elrond's team created eGLD, they knew it would be the core of any internal use in the Elrond ecosystem. They went further by designing it to create a strong store of value, similar to physical gold, but with characteristics that could make it superior to gold in the long run.
By creating new ticker symbols starting with the prefix 'e', the team makes cryptocurrency more intuitive and easier to understand. It also creates a logical and consistent path of derivation for future digital assets and currencies.
The built in eGLD design is the premise that the Elrond network will be compatible with other cryptocurrencies and government-issued fiat currencies. Eventually, everyone will be able to tap into Elrond's massive bandwidth capabilities and offer ways to transfer value electronically. In the future, Elrond plans to create many new “e” tokens that include fiat currencies, synthetic assets and stablecoins.
3. Built-in scarcity increases the demand for eGLD
By lowering the eGLD supply to 20 million, the eGLD supply per person is very low 0,0025 eGLD per person. This spurs the demand for eGLD, assuming owning several hundred eGLDs is now similar to owning several hundred Bitcoins in 2010.
4. Incentives for betting
Validator nodes have a strong incentive to bring eGLDs into play and secure the network that comes from newly issued eGLD supplies over the next decade. Eventually, as adoption increases, the inflation created by the new offering is supplanted by transaction fees to cover wagering rewards. The incentive to stake becomes greater by limiting the total eGLD supply to 31.415.926 eGLD, which will be achieved by 2030.
5. Adoption reduces inflation and increases scarcity
By replacing the issuance of new tokens with transaction fees, the theoretical limit of the eGLD is reduced, contributing to the scarcity of the token over time.
Looking at the usefulness of eGLD, the strength of the Elrond network and the potential adoption of Maiar, it is clear that each of these is individually very valuable. When combined, they create a powerful ecosystem that has the potential to create a financial revolution similar to the industrial revolution experienced over a century ago.
Given the fixed offering of eGold, combined with the global distribution and intuitive simplicity of Maiar, every new user who joins the application will be directly reflected in the value of eGold. So, the question becomes: how will eGold evolve with 1 million people using Maiar? How about 10 million or 100 million people?
Buy and trade eGLD
Since the coin was launched by Binance Launchpad, it is not surprising that almost all of the trading volume is on the Binance Exchange. There are only a handful of other exchanges that list the coin, and the only other significant trading volume is on OKEx.
This means that eGLD's liquidity is heavily concentrated on one exchange.
That said, the turnover of Binance it's really impressive. Indeed, compared to similar market capital, Elrond has much higher levels. This bodes well for executing a large lock up order Binance.
To store your eGLD tokens, it is best to use the native eGLD wallet. This is a cryptocurrency wallet where you can securely transfer, receive and store your Elrond tokens, while interacting with Elrond apps. You can also choose to use the Maiar Mobile App, which acts as a wallet and much more.
Take note📝: There is also an Eldorado coin that uses the ERD designation. Don't confuse an Eldorado wallet with an Elrond wallet.
Conclusion
The Elrond network has been in the works for three years, and with the release of the mainnet joining the mainstream blockchain projects. The fact that the project was backed by Binance Launchpad is a good sign, indicating that Elrond has been fully controlled by Binance and has proven to be a solid project.
The increase in the price of the DRE token before the mainnet launch is also very encouraging, especially considering the lack of coverage by cryptocurrency exchanges for the token. This was also followed by an increase in the value of the new eGLD token, demonstrating that the value of the token has real power.
The team seems very competent. So far they have performed very well, meeting deadlines and deliveries as promised. This is valuable in the blockchain space.
With the single Sharding adaptive state and secure proof of participation, the project promises speed and scalability that hasn't been seen on many projects.
It's an ambitious project, but we'll have to wait and see how quickly the team is able to continue developing and deploying solutions to determine the potential longevity of the project. Even if the design looks great on paper.
Thanks for helping out, superb information. "Whoever obeys the gods, to him they particularly listen." by Homer.