The Beginner’s Guide
Elrond is software that aims to promote a distributed network of computers to run a smart contract platform that aims to prioritize scalability and low transaction fees.
In this way, Elrond aims to grow an ecosystem of decentralized applications and cryptocurrencies. It is designed to compete against major blockchains like Ethereum and Zilliqa.
To do this, Elrond uses two unique features:
- Adaptive State Fragmentation: The process of splitting Elrond infrastructure to support more processes and programs.
- Secure Proof of Stake (SPoS): Consensus mechanism designed to synchronize separate network components into a common ledger.
Also developers copy goods and services on its platform. It will use the Elrond Integrated Development Environment to write and launch customizable programs.
Elrond, interacting with apps. It is backed by EGLD coin, the native cryptocurrency used for sending transactions and incentivizing actors supporting the network.
For more regular updates from their team, it releases categorized updates for technologically or economically savvy users.
How Does Elrond Work?
The Elrond network offers many features common to other cryptocurrency networks, such as smart contracts, transaction settlement, and token issuance.
Developers can use programming languages (such as Rust, C, and C++) to design new programs (decentralized applications) to run custom programming logic (smart contracts) and deliver various products and services.
Unique to Elrond are sharding and proof-of-stake design variations that help handle around 12,500 transactions per second.
Fragmentation works by dividing the network into chunks or chunks so that the nodes handle only a fraction of the network operations. This practice is also implemented in other competing blockchains such as Zilliqa and Polkadot.
Elrond’s transaction processing mechanism is called “Adaptive State Sharing”, where nodes are subsets to validate transactions. After the transactions are processed, the shards publish them to the metachain (Elrond’s central blockchain) where they will be resolved.
Every 24 hours, one-third of the nodes verifying transactions in each shard are changed to a new shard to avoid collusion between the validators in each shard.
Secure Proof of Stake (SPoS)
At the heart of Elrond is Secure Proof of Stake (SPoS), a Proof of Stake governance mechanism that keeps the distributed network of computers running the blockchain in sync.
Similar to traditional PoS, SPoS is to secure the network. Verifying transactions. And it is used by computers running Elrond software to distribute newly minted EGLD coins.
However, Elrond’s web is built from parts rather than a single chain. The SPoS consensus mechanism is used to select validation nodes to generate blocks within a chunk rather than the entire network.
To reach the final solution, validators must check the work of the block producers and synchronize them with other parts within the network. When a series of transactions are successfully added to the Elrond blockchain, these contributors are rewarded with EGLD tokens.
Who Created Elrond EGLD Coin?
Elrond was founded in 2017 by Lucian Todea, Beniamin and Lucian Mincu. It is supported by Elrond Network, a Malta-based company dedicated to expanding the project.
In June 2019, the project embarked on a private investment round that raised $1.9 million from several angel investors. That same month, Elrond held an Initial Exchange Offering (IEO), raising $3.25 million in exchange for 25% of the total token supply.
At that time, Elrond distributed the cryptocurrency as ERD coin. But after the project launched its mainnet in July 2020, Elond changed the cryptocurrency to EGLD coin. The project then held a temporary event that allowed its investors to trade ERD for Elrond’s new EGLD cryptocurrency.
Why does EGLD have value?
Elrond’s cryptocurrency EGLD plays an important role in maintaining its network. And the network can be used to send and reward contributors and execute smart contracts.
By owning and staking EGLD, users gain the ability to vote for network upgrades. Rewarded with newly minted EGL in proportion to the staked amount.
Elrond gives smart contract authors 30% of their transaction fees in what they call “smart contract royalties”. Elrond also receives 10% of all transaction fees to reward community participants in special events, bounty projects and network development.
Like many cryptocurrencies, the EGLD supply is limited, meaning there will only be 20 million EGLDs per the rules of the software.