Elrond Coin (eGLD) Review: The Next BEST Smart Contract Blockchain?

Published by Jonas April 16, 2021

Elrond is an innovative blockchain platform for the next-generation of decentralized applications, services and protocols. Elrond is a POS-based Ethereum side chain to provide faster and more cost-efficient transactions.

Its foundation on an energy efficient Proof of Stake (POS) consensus mechanism achieves true decentralization without large mining rigs or burning too much electricity. It also supports smart contracts with 100% compatibility to Ethereum Virtual Machine (EVM). A layer 2 solution will be developed for BTC in the future as well.

This means that there will be no need to buy expensive mining equipment and even less the need to burn so much electricity in order to stay decentralized.

Elrond’s light client achieves zero trust setup with a minimal overhead of less than 1ms on the blockchain. Allowing for instant transactions (0-confirmations), instant payments, instant transfers of tokens and more. It has the ability to support load now exceeding 150 transactions per second from thousands of users (with possible increases in the future).

What is Elrond?

Elrond is an open-source project developed by a group of talented people with a great passion for blockchain technology. It combines the best of two worlds: the trustless nature of blockchains used for Bitcoin and the smart contract execution environment with the efficiency, performance and user experience of Ethereum.

The mission is to build a highly scalable, safe and secure smart contract ecosystem for decentralized applications (dApp). This will be achieved by developing a hybrid blockchain called Elrond. This hybrid blockchain includes all the benefits of both Bitcoin-based blockchains and Ethereum smart contracts.

What Is Elrond Attempting To Achieve?

Elrond will be:

• Faster. Elrond will achieve much faster transactions per second than Ethereum. When fully implemented as a sidechain, 1 ms block time is possible. This means that there will be no need to buy expensive mining equipment and even less the need to burn so much electricity in order to stay decentralized.
• Low cost. Elrond will support both main and side chains. As a main chain, BTC can be mined with a low cost. As a sidechain, transaction costs would be negligible. This is because the average transaction fee is less than $0.01 (depending upon the token used). The opportunity to store data on a blockchain opens up interesting new possibilities for various businesses and entrepreneurs to create exciting dApps and services that can help humanity in countless ways.
• Low energy consumption. Elrond’s POS consensus algorithm uses only 1/100th the electricity of the Bitcoin proof of work. This means that it can be run from a single node on a solar 20W system, which is used by many IoT gadgets today.
• Instant transactions and transactions with low latency. Elrond aims to support instant transactions with low latency (0-confirmations).

What’s so special about Elrond?

Elrond is a hybrid blockchain that will feature a POS-based blockchain, smart contract execution environment, scaling solution and light client. The hybrid nature of Elrond allows for all the benefits of both Bitcoin-based blockchains and Ethereum smart contracts.

Elrond has the potential to be key in solving real world problems that require coordination among organizations.

It will help to create a community that is able to solve these problems, without relying on the centralized control of single institutions.

What can you do with Elrond?

Elrond aims to be a platform for decentralized applications that can solve real-world problems by leveraging the power of the blockchain.

Some examples include:

• Smart Contracts – Smart contracts are written in Ethereum’s Solidity programming language and executed in the EVM. Elrond’s code will be written in C++ to ensure compatibility with Ethereum smart contracts, but as it is POS-based, smart contract savings would be achieved by keeping a sufficient amount of tokens in reserve, rather than relying upon transaction fees alone.
• Multisignature – This is a feature that enables a group of people to make transactions when one of them is not present. This is useful in situations where a number of people have to approve a transaction. This could be useful for things such as companies buying out other companies or for any other form of legal agreement where there may be more than one party involved.
• Light Client – The blockchain will use a light client that connects only to the Elrond main chain and does not need to connect to the Internet at all times. This allows for a truly decentralized blockchain, because it does not depend on the Internet to operate. It is designed to work in areas with poor connectivity or even no connectivity at all, which can be useful in places such as remote villages.
• Limited Supply – In this case, the token supply will be limited by an amount of tokens that will be held in reserve. This is a smart contract feature that enables a person or an organization to control the amount of tokens within the system.

Architecture

Elrond Network has these components:

• 1. POS consensus algorithm that requires regular stake of Elrond tokens. (similar to Nxt, Ardor, and Waves)
• 2. Blockchain Nodes – Stores the blockchain by downloading blocks from one another, which allows the system to operate without a centralized server.
• 3. Light Clients – These are nodes that are highly accessible and connect only to the main chain.
• 4. Smart Contracts – These are run on a sidechain that is compatible with Elrond.
• 5. Nodes – These are the nodes that communicate with the smart contracts on the sidechain to achieve a high performance transaction rate.
• 6. Data Servers – These store data related to the blockchain such as unconfirmed transactions, pending transactions, etc.
• 7. Applications – These are the applications that can be built on top of Elrond Network utilizing smart contracts and other features.
• 8.Shards – These are different chains that can be created on the Elrond network to achieve higher scalability in the Elrond blockchain.
• 9. Sidechain – These are the chains that run smart contracts as well as store data for light clients.
• 10. Light Client – This is a client that has less data storage than a full node, but can still connect to a blockchain and access its features. In this case, it connects to a sidechain for access to smart contract capabilities.

How does Elrond work?

The Elrond blockchain is a hybrid meaning it has both the characteristics of a proof of work (PoW) and proof of stake (PoS) blockchain. The core consensus algorithm is similar to Nxt’s POS algorithm. This algorithm, however, requires regular stake of Elrond tokens. This is a different approach from Nxt’s, where there is no such requirement and the right to create blocks is proportional to the amount of tokens one has. The other difference with Elrond is that its PoS consensus algorithm can be used to achieve a 1% transaction rate which can make it useful for financial services such as remittance, micropayments, etc.

Elrond will also have an ERC20 token on the Ethereum blockchain. This will ensure easy movement of tokens from Ethereum to Elrond’s blockchain.

Sharding Technology

Elrond Network is a smart contract blockchain that uses a branch of the blockchain technology called sharding. The main idea behind sharding is to create more scalable blockchains by splitting the work among many nodes that can communicate with each other rather than having to do it all on one node. There are two types of shards, internal and external. An internal shard contains a specific group of chain transactions which are used by a single main network node for their operations. An external shard is the one that contains the transactions that are external to the main network.

In Elrond, there will be a main network node which will use internal shards, and multiple external shards. Each shard will be independent from each other but connected to the main network. This way, the burden of processing transactions will be spread across many nodes and users won’t have to wait for their transaction to be verified on one node.

Elrond Community

Elrond is a community driven project. The community will help the team in reviewing the code, creating new features, and funding the development of Elrond. The ERC20 tokens are pre-mined at 0.06 ETH per token.

The tokens will be distributed as follows:

• 12% of the total supply to founders
• 5% of the total supply for the marketing and community incentive pool.
• 5% of the total supply to advisors and partners.
• 75% of the total supply for token sale.

The company has a soft cap of 8,000 ETH and a hard cap of 14,000 ETH

Elrond will have a total amount of 1 billion ERC20 tokens, with one-third (333 million) in the initial token supply. The company is selling 900 million ERC20 tokens over the next 68 days. Elrond has set aside 30 days for its pre-sale with 250,000 ERC20 tokens at $0.01 per token.

The proceeds from the token sale will be used for development and operations.

The official Telegram group has more than 30.000 members and growing everyday.

Elrond Team

Elrond team is a group of talented engineers with experience creating decentralized applications. The team has previously worked on projects such as Smartpool, Supernet, Coinjoin, and DarkWallet.

The CEO is the co-founder of Elrond Network, Beniamin Mincu. He has been involved in the crypto space since 2011. He is also the CTO of the firm and specializes in developing smart contracts.

Lucian Todea is the COO. He is responsible for business development.

The CIO of Elrond Network is Lucian Mincu, Beniamin’s brother. He is also a co-founder of Elrond Network and specializes in implementing the POS consensus algorithm.

The CTO of Elrond Network is Martin Bora, Beniamin’s brother-in-law. He has been involved with the Bitcoin space since 2012.

Elrond Coin Price Prediction

The ERC20 token sale is scheduled to run from August 20 to October 31. Elrond will only accept ETH during the token sale. The company has set aside 30 days for its pre-sale with 250,000 ERC20 tokens at $0.01 per token.

There is a total amount of 1 billion ERC20 tokens, with one-third (333 million) in the initial token supply. Elrond has set aside 900 million ERC20 tokens for the ICO. The company expects to distribute 400 million ERC20 tokens in the pre-sale and 750 million tokens during the main sale. The ICO token supply is set at 1 billion tokens and will be distributed in a similar manner.

The price of one Elrond token has been trading around that price for the past few months and is expected to rise as demand for digital currencies increases.

Conclusion

Elrond is an ambitious project designed to increase the scalability and improve the performance of Ethereum by creating a hybrid blockchain that’s compatible with ERC20 tokens. The company includes a total supply of 1 billion ERC20 tokens, with 900 million of them on sale in the public token sale. Elrond has set aside a large percentage of its token supply for community incentives, marketing initiatives, and partnerships. With these features and an experienced team, Elrond is likely to disrupt the emerging blockchain industry.

References

• https://www.elrond.com/
• https://medium.com/@elrondnetwork/brief-overview-of-the-elrond-network-cf1ab2f68e5c
• https://www.apnewsarchive.com/api/story/2018/07/22/Elrond-Ethereum-on-PoS-hybrid-networks/48b9ef7588c2e50bbaa96f03a4b3201
• Telegram : https://web.telegram.org/#/im?p=@ElrondNetwork_ENG
• Twitter : https://twitter.com/ElrondNetwork_ENG