Elrond Review: The Sharding Blockchain Focused on Scaling.
Elrond is a project that has been getting quite a bit of attention lately. Like many other projects before them, they are focused on scalability. When I say a bit of attention I mean a more than 5,000% jump in the value of its ERD cryptocurrency in less than 4 months! That was in early 2020, between mid-March and the launch of the Elrond mainnet in July 2020.
However in September 2020 the ERD cryptocurrency underwent a change as it was transitioned 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 were swapped) it also saw a redenomination of 1,000 ERD to 1 eGLD, which was in-line with the changed economic model that saw the total supply of the cryptocurrency drop from 20 billion for ERD to 20 million for eGLD.
You can read more near the end of this article, when we cover the ERD and eGLD tokens and the tokenomics of the Elrond project.
We will note here though that the eGLD token has also seen a roughly 300% increase in the 5 months since it was released.
Scaling and throughput is perhaps one of the most pressing concerns facing some of the largest blockchains today. We have all witnessed blockchain bloat and the inevitable frustrations that come with low throughput and slow transactions.
Yet, with so many competing solutions, is Elrond worth it? Can we justify the huge spike in its price that’s come in response to the official mainnet launch of the Elrond blockchain? Given that after a brief period of profit taking in the token it resumed its climb high it does seem as if it is justified to Elrond investors.
In this Elrond review, I will give you everything that you need to know about the project. I will also take a look at the long term prospects for the eGLD token.
What is Elrond?
The Elrond Network is a public blockchain created to provide high-level scalability, interoperability, and high throughput. The goal is to create a decentralized network that can provide the same or better performance when compared with centralized networks, while also providing users with greater privacy.
The Elrond Network plans on achieving these goals through its unique technology Adaptive State Sharding, and by using the Secure Proof of Stake (SPoS) consensus mechanism.
The Elrond Network has several key pieces that make up the framework of the blockchain.
Nodes and Users : These are the two main pieces keeping the network running. Users deploy transactions on the network, either as a transfer of value or as the execution of a smart contract. Nodes are the devices on the network that process these transactions in both an active and passive manner.
Validator : These are special node types that provide block generation and consensus building in return for rewards. Validators are required to stake tokens to become eligible and are then nominated by other stakeholders. Other special node types include observers and fishermen, which we will describe later.
Shards : The Shards are smaller partitions of the Elrond network and are used for scaling: each shard is responsible for recenzo de binance-volbo
a portion of the state (accounts, smart contracts, blockchain) and transaction processing, so that every shard can process only a fraction of the transactions in parallel with other shards.
Metachain : The Metachain is the blockchain that runs in a special shard, where the main responsibilities are not processing of transactions, but notarizing and finalizing the processed shard block headers, facilitating communication between shards, storing and maintaining a registry of validators, triggering new epochs, processing fisherman challenges, rewarding and slashing.
eGLD Tokens : The eGLD token is what powers the network, acting as the entry point for the network, and providing the means to pay for transactions, dApp deployment, دا یو ښه تبادله ده storage, smart contract execution and rewards to validators. Transaction fees are split between validators and i-binance ngaphandle kwe-ssn the Elrond Community Fund.
Adaptive State Sharding Technology.
Adaptive state sharding is a unique way to employ sharding technology, and while it has long been a database optimization technique, it is only recently being introduced to blockchain applications.
Elrond is using adaptive state sharding to accomplish 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 shards are present in the network it shouldn’t impact state updates or network uptime. Determining the destination of transactions is easy to calculate and deterministic thanks to the sharding solution, leading to instant traceability and dispatching. The adaptability of the network means shards remain balanced at all times. The state sharding solution employed by Elrond means demand changes are handled without an impact on the security of the network.
The Elrond Network divides its blockchain timeline into epochs and rounds. While it is possible to modify epochs by modifying the architecture of the system, for the most part, the epochs have a fixed duration.
At the end of an epoch, shards are pruned and reorganized across the network. Rounds also have a fixed time span. As each new round begins a new consensus group is randomly selected for committing one block.
Secure Proof of Stake Consensus (SPoS)
The SPoS consensus mechanism used by Elrond was developed to improve the existing Proof of Stake solutions. It reduces the latency in the network and allows any node in the shard to determine which members will be part of the consensus group at the start of each round.
Randomization is provided through the aggregated signature from the last block. The Elrond team estimates this reduces the time required to elect a consensus group to under 100ms.
There is also a weighting factor introduced that serves to promote meritocracy among nodes while also considering stakes. And Elrond introduces the Bellare and Neven multi-signature scheme which was designed to reduce the number of rounds of communication necessary in the signing algorithm.
As a more sophisticated version of Proof of Stake, it aims to ensure distribution of shards is fair, and it is a compromise between increased energy and computational demands and security.
Elrond Network Roles.
Validator : Validators are nodes on the Elrond network that process transactions and secure the network by participating in the consensus mechanism, while earning rewards from the protocol and binance staking සමාලෝචනය transaction fees. In order to become part of the Elrond network, a validator needs to put up collateral in the form of EGLD tokens, dib u eegista shaqaalaha binance which are staked to align the incentives between validators and network goals. Validators stand to lose, their stake if they collude to disrupt the network.
Observer : Observers are passive members of the network that can act as a read & relay interface. They can be either Full, بائننس کمیشن keeping the entire history of the blockchain, or Light, keeping only 2 epochs of blockchain history. Observers are not required to stake EGLD tokens to join the network and are not rewarded for their participation.
Fisherman : A node which verifies the validity of blocks after they have been proposed. They challenge invalid blocks resulted from adversity of malicious actors and are rewarded for their service. The Fisherman role can be fulfilled by validators which are not part of the current consensus round or by observers.
Elrond Network Performance.
Elrond launched its mainnet on July 30, 2020. The developers are looking to create a blockchain that is at the heart of a global, border-less and fully accessible digital economy.