Elrond (old)

What is Elrond (EGLD)?

Elrond is a blockchain-powered smart contract platform that prioritizes scalability and low transaction fees.

One of several projects born to solve certain problems with the blockchains of the time, Elrond doesn’t promise anything flashier than massive transaction throughput at low cost.

With 15,000 transactions per second at just a tenth of a US cent each, this boast is a lot closer to reality than its fantastical name. In fact, as recently as June 2022, it was estimated that Elrond could theoretically handle up to 263,000 transactions per second.

Designed to combat three flaws in Ethereum at the time, Elrond also brings to bear an innovative proof-of-stake consensus system that’s far less power-hungry than proof-of-work mining.

When Was Elrond Launched?

Elrond was conceived in late 2017, and its first actual cryptocurrency token was called Elrond, with the ticker ERD.

ERD was sold at an Initial Exchange Offering (IEO) on Binance that raised $3.25 million in change for a quarter of its total supply. This public investment round was preceded by a private sale to angel investors that raised $1.9 million for 19% of its total supply.

ERD was changed to its current EGLD form in July 2020, when Elrond went to the mainnet. Investors were able to swap one for the other during a token swap event in September 2020, with ERC-20 and BEP-2 ERD tokens changed for EGLD.

During this event, the total EGLD supply was reduced from 20 billion to 20 million via a 1000 ERD to 1 EGLD swap.

Who are the Founders of Elrond?

Elrond was founded by Lucian Todea and the brothers Beniamin and Lucian Mincu. The Mincu brothers had previously founded a digital asset investment fund called MetaChain Capital as well as an initial coin offering information aggregator, ICO Market Data.

Beniamin Mincu had also had previous operational experience in blockchain through his work in NEM until 2015 and was also an early investor in notable projects such as Brave, Binance, Tezos, and Zilliqa.

Lucian Todea, meanwhile, is a tech entrepreneur with successful ventures like software review site Soft32 and mobile payments app mobilPay under his belt.

How Does Elrond Work?

Thanks to its proof-of-stake consensus mechanism, Elrond is validated rather than mined. This means that instead of running expensive and specialized hardware rigs, validators on Elrond lock their EGLD tokens away in exchange for the right to process transactions on the blockchain.

Participants, called Fishermen, then verify the new blocks produced by the validators, hunting for invalid blocks or malicious actors. Finally, Observers store the blockchain’s history.

Elrond’s scalability comes from this concurrent network participation by three different types of participants.

Meanwhile, the blockchain also offers developers and users a variety of functionalities found in other similar networks, such as smart contracts and token issuance.

Smart contracts are pieces of code that allow certain actions to be executed when predefined conditions are met. Most famously used in decentralized finance, these smart contracts make blockchains like Elrond and Ethereum, among many others, programmable.

What Makes Elrond Unique?

Adaptive State Sharding is one of Elrond’s key innovations. Sharding itself is the practice of dividing the network into several pieces called shards to allow nodes to only process a limited number of transactions.

Elrond’s sharding mechanism, Adaptive State Sharding, splits nodes into subsets in order to verify transactions. Once processed, these transactions are broadcast to the Elrond blockchain by the shards to complete the settlement.

Every 24 hours, a third of the nodes in each shard are reshuffled to a new shard. This prevents the possibility of collusion among validators.

How is the Elrond Network Secured?

Elrond is secured by a consensus mechanism called Secure proof-of-stake (SPoS).

SPoS is similar to traditional proof-of-stake mechanisms that feature economic incentives and disincentives, such as rewarding network participants who stake their EGLD and slashing the stakes of those that misbehave.

Since Elrond uses a sharded network architecture, its consensus mechanism selects validating nodes within a shard rather than the whole network. Then, nodes verify the blocks created by the block producers and synchronise them with all of the other network shards.

Once a block is finally added to the Elrond blockchain after this process, contributors are given EGLD tokens as a reward for performing according to the protocol.

What is the Use of EGLD?

EGLD is the native token of the Elrond blockchain network. Its main use is for staking, where validators of the network lock EGLD away to avail themselves of a higher chance to create blocks to append to the Elrond chain. Stakers then earn a share of the newly minted EGLD.

Participants who stake EGLD also have the ability to vote on network upgrades. This is a form of decentralized on-chain governance.

Elrond is used as the network’s native currency for transactions and smart contracts. Elrond also rewards smart contract authors using EGLD. 30% of the transaction fees attributed to a smart contract are granted to the author of said smart contract in the form of a “smart contract royalty.”

Furthermore, Elrond also uses 10% of all transaction fees to give back to the community in the form of special events, bounty projects, and network development.

Who Controls Elrond?

Elrond Network, led by CEO Beniamin Mincu, controls Elrond. Co-founder Lucian Todea is Elrond Network’s COO, and third co-founder Lucian Mincu remains CIO.

Per Messari, Elrond Network is headquartered in Romania and has 20 employees. Felix Crisan serves as Elrond Network’s Head of Research, while Radu Chis and Adrian Dobrita head Technology and Engineering, respectively.

How Much EGLD Is In Circulation?

EGLD has a limited token supply, with the Elrond protocol dictating that there will only ever be a total of just over 31.4 million EGLD in existence.

The supply of EGLD at genesis was 20 million EGLD, converted from 20 billion ERD, but that number has increased slowly thanks to the minting of EGLD to reward network validators.

At genesis, 44% of the token (then ERD) supply went to investors. 7% was reserved for ecosystem rewards, 8.5% went toward marketing grants and an accelerator pool for dApp developers, and 2% went to a community fund.

2.5% of the supply went to advisors, 19% to founders and core team members, and 17% to the Elrond Network organization for ecosystem support.

How Do You Buy EGLD?

EGLD is a popular cryptocurrency for its fundamentals and technology, and as such, it is widely available.

EGLD can be traded against a variety of stablecoins and even fiat currencies on top worldwide exchanges, and it is even available on derivatives markets.

Is It Possible to Buy EGLD Instantly?

Elrond features extremely fast transaction speeds, so the settlement of EGLD on the blockchain will be very close to instant.

However, you may find that transferring your EGLD from an exchange to your wallet may not be as fast as the blockchain’s advertised performance.

This is because most centralized exchange platforms have to carry out Know Your Customer and Anti-Money Laundering processes before they release funds to private wallets. This can take some time and delay transfers. However, once the transaction is initiated, it’ll hit your wallet in no time.

How Do You Store EGLD?

Like any cryptocurrency, Elrond is stored in a wallet. By and large, there are two main kinds of wallets:

• Cold wallets, which will keep your EGLD offline for safety, protecting them against any sort of cyber attack.
• Hot wallets, which keep your EGLD online and thus tend to be a little more convenient when it comes to transacting and connecting to various interfaces.

The Maiar wallet is notable as a flagship Elrond product and a big part of the Elrond ecosystem. Maiar is a digital wallet available as a mobile payment application. It is easy to use, even for non-crypto savvy consumers.

Maiar is a non-custodial wallet, meaning that you don’t have to trust a third-party custodian, and it has various features, including access to Elrond staking.

Elrond Energy Consumption

In 2021, Elrond became Europe’s first carbon negative blockchain. The Elrond Network team additionally estimates that Elrond is 6 million times more energy efficient than Bitcoin! As per the 2021 study, Elrond saw a 6 million KG CO2 footprint offset by retiring carbon units equivalent to 7.4 million KGs of CO2. Furthermore, Elrond has several investments in verified green projects.

Is EGLD a Good Investment?

As far as cryptocurrency projects go, Elrond certainly seems to have it all. Featuring a capped token supply and the option for passive income via staking, EGLD has many of the tokenomics sought after by mainstream investors.

Elrond also has strong fundamentals to back that up, with a secure and carbon negative consensus mechanism combined with extremely high transaction throughput and fast finality.

With all the pieces in place, all that remains for Elrond is to achieve significant mass adoption.