Elrond (EGLD) is a blockchain that aims to create a global efficient transaction network. This is of course not the first project that has the same goal. Yet Elrond is different from the other projects. To achieve this, the protocol uses new techniques, Adaptive State Sharding, Secure Proof of Stake (SPoS) and Battle of Nodes. We explain exactly how that works!
- 1 What is Elrond?
- 2 The Elrond team
- 3 The Partners
- 4 How does Elrond work?
- 5 Adaptive State Sharding
- 6 Secure Proof of Safe (SPoS)
- 7 Battle of Nodes
- 8 The Elrond Token – EGLD
- 9 What is the EGLD used for?
- 10 The IEO and the financing of the Elrond project
- 11 Elrond (EGLD) Chart
- 12 How do I buy EGLD?
- 13 How can I keep my EGLD?
- 14 Conclusion
What is Elrond?
The Elrond project was born in 2017 in Sibiu, Romania. The aim of the project is to completely redefine the public blockchain infrastructure with an emphasis on security, efficiency, scalability and interoperability.
To achieve this, the Elrond blockchain is based on three principles: Adaptive State Sharding, Secure Proof of Stake (SPoS) and Battle of Nodes.
Elrond’s mission is to create a platform capable of meeting the global demand for transactions. Elrond’s network is joined by numerous masternodes that allow for fast and cheap transactions. In addition, Elrond also hosts decentralized applications (dApps) for key use cases.
In just 3 years, the Elrond project team has developed a network that can process up to 11,500 transactions per second (compared to just 5-7 transactions for Bitcoin or 15 for Ethereum).
With a simplified user interface, Elrond also hopes to promote the mass adoption of blockchain to the masses. Remarkably, Elrond’s code is open source and verifiable by anyone on GitHub.
The Elrond team
Elrond was developed by a team of entrepreneurs, engineers and researchers with technical backgrounds at Intel, Google, Microsoft and a background in blockchain, including by being part of the team at NEM. According to Elrond’s website, the team consists of 24 people. These are some of Elrond’s most prominent team members:
- Beniamin Mincu ( CEO and co-founder of Elrond): He is a technology entrepreneur and has previously worked for the NEM Foundation.
- Lucian Todea (COO and co-founder of Elrond): Serial entrepreneur and investor for over 15 years.
- Lucian Mincu (CIO and co-founder of Elrond): has at least 10 years of experience with tech startups.
- Felix Crisan (Research Director): He is also a co-founder of BTKO, which is the largest stock exchange in Romania.
- Radu Chis (CTO): Radu is a graduate student in computer science and also specializes in machine learning.
- Adrian Dobrita (Director of Engineering): Adrian has at least 10 years of experience as a software engineer, of which 3 years at Intel.
The Elrond team has already concluded numerous collaborations with major industrial players. Here is the list of known partnerships to date:
- Just Mining : the French platform incorporates Elrond’s masternodes and staking into its services
- Binance : The exchange allows issuance of its BUSD stablecoin from the Elrond blockchain. It also takes care of the nodes on the blockchain.
- Samsung : A video game that uses Elrond’s network is integrated with Samsung Blockchain Wallet.
- Ankr : a cloud infrastructure that enables the deployment of Elrond nodes.
- Chainlink : Elrond uses Chainlink’s price oracles to improve the security and reliability of the smart contracts .
- Nash : A decentralized exchange looking to integrate the Elrond blockchain into its ecosystem.
- TypingDNA : a behavioral biometrics company, with which Elrond aims to improve the protection of its users.
- Netopia : a payment processor in which Elrond wants to introduce EGLD.
How does Elrond work?
What Elrond does is essentially not unique per se. The way they do it, though. They use different techniques that ensure that the project brings even more benefits.
Adaptive State Sharding
Sharding is a technique of horizontally dividing data into a large number of independent shards (or fragments) and thus dividing the storage in memory. Sharding was first used in databases and is a method of distributing data across multiple machines.
This makes it a technique widely used by blockchains to increase scalability by distributing status and transaction processing so that each node in the network processes only a fraction of all transactions.
Elrond’s most important innovation is therefore the use of sharding. The team has developed Adaptive State Sharding. This is an innovative solution that increases the efficiency of this technique tenfold.
This evolution alone combines the 3 main types of sharding most commonly used on the market: network sharding, transaction sharding and state sharding.
The sharding implemented in the Elrond network is designed to achieve the following objectives:
- Scalability without compromising reliability . That is, increasing or decreasing the number of fragments should only affect a negligible portion of the nodes without causing downtime.
- Fast shipping and instant transaction traceability.
- Efficiency and adaptability. This way fragments are as balanced as possible at all times.
Secure Proof of Safe (SPoS)
For the functioning of the blockchain, Elrond uses a new approach of Proof of Stake. They call this Secure Proof of Stake (SPoS), and it is an improved version of PoS.
This algorithm is innovative in the way the masternodes are selected from a shard and also in the steps validators take to complete the transaction validation process as efficiently as possible.
At the beginning of the block creation, SPoS selects the validators using a random resource that cannot be predicted or influenced. The time required for the random selection of the consensus group is exceptionally short (about 100 milliseconds, often less).
The main advantage of such short cycles is that of network security. SPoS is based on the principle that an attacker cannot adapt faster than the time allowed by a cycle to affect in any way the block that will be created.
Like other PoS-based consensus algorithms, SPoS selects masternodes based on the amount of EGLD coins wagered by the holders.
In addition, an individual score has been added to each validator. This rating reflects the past behavior of the validator and is taken into account in the consensus selection: validators with a higher rating are more likely to be selected than other validators.
Battle of Nodes
To test the protocol before the release of the mainnet, the community was invited to take the Elrond blockchain through a series of tests. This phase called “Battle of Nodes” is a public test of the Elrond blockchain. With this, Elrond wants to be sure that it meets the safety requirements. And the public can see with their own eyes whether that is really safe.
Battle of Nodes is a permanent testnet and will continue to be used after the rollout of the mainnet. Network validators can run nodes there to test the latest versions of the protocol before deploying to the mainnet.
The goal is to push the Elrond network to its limits and detect potential vulnerabilities before a new protocol update is rolled out.
This test net is one of the components that enables Elrond to guarantee the security of its network. To encourage help from developers, hackers and cybersecurity specialists, Elrond financially rewards anyone who finds a vulnerability.
In the 1st and 2nd phase of Battle of Nodes, which took place in October and December 2019 respectively, $90,000 was distributed among the participants. Prior to the mainnet, participants who found a bug were awarded $60,000. So that’s a big reward!
The experiments of this phase have enabled the Elrond blockchain to prove its scalability and security. Indeed, the network peaked at 13,000 transactions per second and 3 attempts at DDoS (Denial of Service) attacks were thwarted by the protocol.
The Elrond Token – EGLD
Elrond’s token is called EGLD. You have probably come across this token on a crypto exchange , because it is quite a popular cryptocurrency.
What is the EGLD used for?
Elrond grants access to its network via EGLD, which is a utility token. All costs associated with transaction processing, execution of smart contracts and rewards for various contributions to the network will be paid in EGLD.
In addition, EGLD can also be used to vote for the board of Elrond. In this way, users determine for themselves what the future of this project looks like.
EGLD Coins are also eligible for staking, allowing their holders to earn rewards commensurate with the amount of EGLD invested in managing the network through masternodes. Currently, the return for staking the EGLD token is 20% when you delegate it, and 36% when you do it yourself.
The IEO and the financing of the Elrond project
The IEO (Initial Exchange Offering) took place in July 2019 and raised $3.25 million (pre-determined limit). A total of 5 billion EGLDs were issued in the IEO, which is 25% of the total number of tokens. The prize awarded to each token at the IEO was $0.00065.
In terms of private investment, the project raised $1.9 million between April and May 2019. This IEO was led by Binance Labs and saw participation from NGC Partners, Maven 11 Capital and Electric Capital.
The EGLD tokens were distributed as follows (same distribution for future tokens released):
- 25% for individual investors (IEO)
- 19% for private investors
- 19% for the team
- 17% for the project reserve
- 8.5% for the marketing of the project
- 7% for contributors to the functioning of the ecosystem
- 2.5% for advisors
- 2% for the community (airdrops, competitions, etc.)
Elrond (EGLD) Chart
How do I buy EGLD?
You cannot buy Elrond on every crypto exchange. This is because it is still a fairly new cryptocurrency. We therefore recommend that you use Binance or Gate.io . There are several reasons for that. Firstly, you have high liquidity on these crypto exchanges, so you can always buy or sell EGLD.
In addition, these crypto exchanges are also a safe choice. For example, when you buy it from a small exchange, problems can arise. This is especially true for a decentralized exchange, in addition to the fact that it is also very difficult to carry out the transaction there.
How can I keep my EGLD?
The safest way to store EGLD is to use the official wallet developed by the team: Elrond Wallet. This wallet will also make it possible to communicate directly with the dApps built on the blockchain of Elrond. If you want to take advantage of all the benefits that Elrond offers, it is recommended to use the Elrond Wallet.
It is of course also possible to store EGLD in your Binance or Gate.io wallet. However, you cannot then take advantage of the advantages that the Elrond blockchain offers.
Do you want to store EGLD in a hardware wallet ? Then make sure you have a hardware wallet that supports EGLD. You can always find this information on the website of the provider of the cold wallet.
The 3 key components of the Elrond blockchain ensure that there is a solid foundation to create an efficient transaction network. The focus on security is also a key point that sets Elrond apart from most other blockchains that share the same goal.
With a strong network of masternodes, Elrond’s protocol is truly decentralized. Its new consensus algorithm offers real added value for the administrators of the nodes. In addition, EGLD allows all holders to generate passive income through staking.
With a testnet already exceeding the highest initial expectations in terms of security and number of transactions per second, the mainnet will certainly be able to compete with the major blockchains on the market.
The team’s ambition to position Elrond among the most important cryptocurrencies in Europe therefore also seems very realistic. However, time will have to tell us how this will turn out. There have been enough blockchains in the past that have not been able to fulfill their dreams.
Thanh Lanh Tran(1989) is Chief Editor from BitcoinUSD.com