What Is Elrond
Elrond aims to incentivize a distributed network of computers to run a smart contract platform that can prioritize scalability alongside the lowest transaction fees. It has two features that make it stand out from the rest, such as adaptive state sharding and Secure Proof-of-Stake (SPoS).
Adaptive state sharding is the process of splitting the Elrond infrastructure with the intention of supporting a lot more transactions as well as programs, while Secure Proof-of-Stake (SPoS) is the consensus mechanism that can sync separate network components.
As such, this network offers features such as smart contracts alongside transaction settlement and even token issuance.
Another noteworthy thing to mention here is the fact that the developers that decide to develop on Elrond have the opportunity to use common programming languages such as C, C++, and Rust to run smart contracts and even design decentralized applications (dApps).
When we discuss sharding, we are discussing the process where the network is split into pieces called "shards," where nodes need to only process a fraction of the transactions, not all of them. This processing mechanism has been dubbed "Adaptive Sate Sharding," and as such, the nodes are split into subsets to verify the transactions. Once they are processed, the shards then broadcast them to the metachain, which is the central blockchain, and here is where they are settled.
Every 24 hours, one-third of the nodes which are verifying the transactions are reshuffled to a new shard, and this prevents collision from occurring. All of this is seen in the EGLD price.
Taking another look at Secure Proof-of-Stake (SPoS), it is used by computers that run the software to secure the network and validate the transactions. They, in turn, distribute newly minted EGLD tokens.
SPoS is used to select validating nodes to produce blocks in a shard, not the entire network, and this is how it differs from other blockchains. When it comes to achieving the final settlement, the validators need to check the work of the block producers and even sync with other shards within the network, where once a batch has been successfully appended, the contributors are finally able to receive their rewards of EGLD tokens.
Elrond Founders
Discussing the founders of Elrond (EGLD), it was founded by Lucian Todea, Beniamin Mincu, and Lucian Mincu in 2017.
Moving along its timeline, throughout June of 2019, the project had a private investment round which managed to raise $1.9 million from different angel investors, and it even held an initial exchange offering (IEO) where it raised $3.25 million, where it exchanged 25% of its total supply of tokens.
The cryptocurrency was originally known as ERD; however, once the project finally launched throughout July of 2020, it was actually renamed EGLD.
Beniamin and Lucian Mincu co-founded MetaChain Capital before creating Elrond, which is a digital asset investment fund. Here, Beniamin filled the role of the CEO while Lucian was the CTO. They also co-founded ICO Market Data which is an aggregator of information surrounding initial coin offerings.
Beniamin was also an early investor in projects such as Tezos (XTZ), Zilliqa (ZIL), Binance, and Brave.
Overall, the team has a history in the cryptocurrency industry and definitely did not start this with no prior knowledge, which is why it is such a unique and sophisticated project.
How Does EGLD Work
EGLD is the native cryptocurrency token that powers and maintains the Elrond network. If you are an owner of EGLD and stake it, you will gain the ability to vote on network upgrades. Here, you will be rewarded with newly minted EGLD, which is proportional to the amount you ended up staking.
Keep in mind that Elrond gives 30% of the transaction fees to the creators of the smart contracts; this is known as smart contract royalties. It also extracts 10% of all of the transaction fees to reward any community participants. This is done through specific events. There can only be 20 million EGLD in existence which is its cap or total supply.
Moving along, Elrond has essentially described itself as a blockchain platform where decentralized applications (dApps) can truly shine due to its high scalability due to the network and transaction sharding.
The network runs on 2,169 validator nodes. All of these are split into four shards. Three of these shards are execution shards, which can process 5,400 transactions per second each, and one of them is known as a coordination shard or the Metachain.
The network can scale when an additional shard is added when the demand is unmet.
To secure all of this, we, of course, saw the use of the SPoS consensus algorithm. Nodes need to stake their EGLD tokens to participate in the validation process, and every validator is assigned a rating score which is based on their past activity that influences if they are selected. When a rating becomes a bit too low, it will not be selected, and fines need to be paid here. In extreme cases, validators can be removed from the network and have their stakes slashed if they go against the integrity of the network and misbehave.
Each validator is randomly selected; this is done in a way that cannot be predicted and cannot be modified based on the previous round of validations. Validators are all shuffled. All of this impacts the Elrond price. The internet economy development is also based on this blockchain network, and EGLD can be purchased using fiat currencies. It is fully secured and uses a genuine state sharding scheme to process global transactions while ensuring distributed fairness and internet-scale blockchain.
This blockchain technology has distributed fairness while eliminating energy usage and having practical scalability. There are validator rewards for each Elrond set, and it produces little computational waste while ensuring resistance. It does not have many security problems as a result of the way Elrond's network is created. This is all reflected in the Elrond price, and Fiat currencies can be used to purchase it. This is not an Elrond price prediction.
Where Can You Buy EGLD
Elrond (EGLD) is a cryptocurrency that can be purchased on cryptocurrency exchanges and can even be traded against FIAT currencies such as the U.S. dollar alongside others. You can also purchase it through the usage of other cryptocurrencies, and it can be bought and sold on both spot as well as derivatives the market, making it exceptional for investors. Note that this is not investment advice, and every single investment you make will have its own set of risks associated with it.
If you want to buy, sell or trade Elrond (EGLD), you can do so on exchanges such as Binance Futures, Binance, OKEx, and Binance U.S.
Overall, Elrond (EGLD) is a cryptocurrency network that stands out due to its scalability and throughput through the implementation of SPoS as well as sharding. It is fully secured and offers something truly unique and unlike anything else out there. Also check out our how to buy Elrond guide to learn more.
