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.
Erond Network in Comparison. Image via Elrond.
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.
Shards: These are small units that make up the sharding system of the network. Validators receive shards in an automatic process that ensures the shards are evenly distributed across the nodes.
ERD Tokens: The ERD token is what powers the network, acting as the entry point for the network, and providing the means to pay for transactions, dApp deployment, storage, smart contract execution and rewards to validators. Transaction fees are split between validators and 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.
Sharding Tree Structure & Shard Redundancy across Epochs. Image via Whitepaper.
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.
Graphical Representation of Elrond Sharding. Image via Elrond Docs.
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 Performance
Elrond remains in its testnet currently, but the developers are looking to create a blockchain that is at the heart of a global, borderless and fully accessible digital economy.
This can be achieved by making Elrond a platform that uses a scalable value transfer protocol along with easy deployment of decentralized applications (dApps).
One of the key features offered by Elrond is its near-instant transaction performance and the linear scaling that will allow the network to grow. The Elrond website claims the network can process 10,000 transactions per second, and a recent testnet case saw 12,000 transactions per second with just 5 shards in use.
The platform also features reduced storage requirements and improved linear scaling as more nodes join the network. The combination of linear scaling and parallel processing is the key that will allow Elrond to surpass the throughput of current centralized solutions.
Cross Chain Interoperability
In addition to efficient decentralization, Elrond is also looking to provide cross-chain interoperability. The team wants to deliver full decentralization in hopes of minimizing the possibility of bad actors exploiting a single point of failure.
The team also hopes to do away with exchanges as the main point of interoperability between blockchains. The Elrond Network has plans to allow full communication between various external services, beginning with the implementation of the Elrond Virtual Machine (EVM).
Components of the Elrond Virtual Mahchine
This virtual machine will support smart contracts written in Solidity, allowing users to create secure transactions between Elrond, Ethereum and other ERC-20 tokens without using an exchange. The Elrond VM will also feature an adapter mechanism that will allow communication with other chains that include adapters to work with Elrond.
The Elrond Team
Elrond is fortunate in that it has a team that features professionals with both technical and entrepreneurial backgrounds.
The CEO of the project is Benjamin Mincu, who began his blockchain experience as a part of the NEM core team for 1.5 years. He led the marketing, business and community building efforts to turn NEM into a global blockchain product.
The CIO at Elrond is Lucian Mincu, an engineer with 8 years experience designing complex infrastructure and network solutions for clients such as the German government.
Some members of the Elrond Team
The COO at Elrond is Lucian Todea, a successful entrepreneur who has over 15 years of experience investing in the technology space and is active in both startup and blockchain spaces.
All of this has given him significant management, business development, leadership, and investment experience. In addition to his role at Elrond, he is also a CEO, partner and founder of several tech startups.
The complete team is comprised of 18 technology and business professionals, all of whom bring extensive experience, skills, and talents to the Elrond Network project.
The size and enthusiasm of a community can have a direct impact on the awareness and adoption of a cryptocurrency project. They impact on marketing as well as general trading volumes.
Hence, I decided to take a closer look at the community that is behind Elrond.
Firstly, they have an official Telegram group that has just below 14,000 members. I jumped into the Telegram to get a better sense of the conversation and the conversation was quite engaging.
Convo in the Elrond Telegram
Then, on the traditional social media side, they appear to only have a Twitter account. This has just over 16k followers which is on the low end when compared to other projects.
Having said that, the team is quite active on their Twitter and share useful updates about the project. They also have an official blog that is kept fresh with contet that keeps their community informed.
The ERD Token
The ERD token is used to power the Elrond Network, and it was the second token launched on the Binance Launchpad. The lottery format initial equity offering ended on July 1, with the Elrond Network raising $3.25 million. That sale offered 5 billion ERD tokens or 25% of the total 20 billion token supply.
The ERD token is a BEP-2 token while the network runs on a testnet, and will transition to a native token once the mainnet is released in the fourth quarter of 2019.
ERD tokens sold for $0.00065 each during the IEO, with the winning lottery ticket holders receiving 461,538.61 ERD, or $300 worth. There were a total of 10,833 winning lottery tickets.
ERD Price Performance. Image via CMC
The price of ERD initially jumped higher following the IEO, trading above the $0.007 level. It fell off its highs and has been volatile since, trading in the range of $0.0027 and $0.0075.
As of August 5, 2019, the price is $0.002953, giving the lottery winners a more than 4x return on their investment.
Buying & Storing ERD
Since the coin was launched by Binance Launchpad it should come as no surprise that nearly all the trading volume is on the Binance Exchange. In fact, there is only one other exchange that lists ERD and that is Dcoin (with only 8% of total volume).
This does mean that ERD liquidity is highly concentrated on one exchange. If ever there was a disruption with trading on Binance then is could pose a risk the broader liquidity of the token and hence have a negative impact on trading.
Register at Binance and Buy HOT Tokens
Having said that though, the turnover on Binance is really quite impressive. In fact, compared to similar market cap coins, Elrond has much higher levels. This bodes well for execution of large block order on Binance.
For storing your ERD tokens you can use the any of the BEP-2 compatible wallets, including the Ledger hardware wallet. The Elrond team has released a wallet on the testnet and plans on releasing the production wallet in the third quarter of 2019.
Development & Roadmap
Development progress at a project can sometimes be hard to ascertain. This is because the team members could embellish what is being done on the project.
For me, the proof is in the pudding.
That is why I like to take a look into the public code repositories of a project. This can give one a rough sense of coding activity and hence the amount of development progress.
So, I decided to dive into the GitHub of the Elrond project. Below are the code commits that they have pushed to their two pinned repos in the past 12 months.
Code commits to select repos in past 12 months
As you can see there has been a fairly regular stream of activity on their testnet over the past year. They have also recently started pushing a host of updates to their Elrond Virtual Macine repo.
If I were to compare this to other projects that I have seen in the past few months, I would say that their level of code output is about average.
However, Elrond seems to have been meeting their milestones as outlined in their initial roadmap. For example, in Q2 of 2019 they just released their block explorer and wallet.
In terms of the next few months, below is what we can expect from the project based on their remaining milestones:
- Q3 2019: They will have a public launch of their testnet with their VM integration.
- Q3 2019: They hope to develop shard adaptivity & Pruning
- Q3 2019: Finally in Q3, they would like to launch the Elrond game dApp
- Q4 2019: If all has gone to plan in Q3, then the developers would like to roll out their Mainnet and initiate the token swap. They would also like to implement the functional payment gateway.
- Q1 2020: Finally, they plan to introduce the Elrond digital identity and launch the Elrond DEX.
It will be interesting to see if the developers are able to keep to these milestones laid out as we are already in Q3. If you want to keep up to date with the progress then you can view their blog.
The Elrond Network has been in the works for two years, and with the release of the token is ready to join the mainstream. The fact that the project was backed by Binance Launchpad is a good sign, indicating Elrond was fully vetted by Binance and found to be a solid project.
Certainly, the team seems very competent, with a deep skillset. So far they have performed very well, hitting deadlines and deliverables as promised. This alone is valuable in the blockchain space.
Với Shending State Shending và Secure Proof of Stake độc đáo, dự án hứa hẹn tốc độ và khả năng mở rộng chưa từng thấy từ nhiều dự án. Và việc bao gồm hỗ trợ cho nhiều ngôn ngữ hợp đồng thông minh chỉ có thể giúp ích khi Elrond chuyển sang không gian ứng dụng phi tập trung.
Chắc chắn đó là một dự án đầy tham vọng và chúng ta sẽ phải chờ xem nhóm có thể phát triển và triển khai các giải pháp nhanh đến mức nào để xác định tuổi thọ tiềm năng của dự án. Trong khi dự án có vẻ xuất sắc trên giấy tờ, nó sẽ cần phải nhanh nhẹn và nhanh nhẹn để luôn đi trước đối thủ.