Bitcoin was created as a potential alternative to traditional money. The Ethereum team took the next step by introducing smart contracts. Since the launch of the Ethereum blockchain, blockchain technology has become the backbone of a new kind of emerging economy. Both coins are so popular that the BTC/ETH exchange is almost the only Crypto/Crypto operation that is supported on almost all exchanges.
Following Ethereum, other advanced blockchains with similar functionality began to be launched. One such project is Elrond.
What is Elrond
Elrond is a project that offers its own solution to the “blockchain trilemma” problem. To do this, it seeks to provide significant throughput, decentralization and security in its blockchain architecture. Achieving high performance under heavy loads is carried out thanks to the special structure of the blockchain.
Elrond’s whitepaper notes that the project aims for throughput comparable to centralized payment systems, while providing a high level of decentralization and protection against attacks.
Elrond uses solutions aimed at reducing computational costs and data volume. The platform is compatible with modern smart contracts, which allows you to increase performance by a thousand times compared to analogues, as reported on the official website of Elrond.
The creators of Elrond claim that their blockchain platform is highly scalable. After testing, the developers launched the mainnet with a declared maximum speed of 263,000 transactions per second.
The Elrond blockchain uses adaptive sharding, which means that the number of shards can change depending on the current load. This flexibility ensures optimal throughput and network security.
Transactions in each network segment are executed in parallel, and shards create blocks independently of each other, which eliminates external delays.
The Elrond platform provides the ability to use smart contracts and create decentralized applications. For this purpose, Elrond’s EVM-compatible WebAssembly-based virtual machine (WASM) is used. Smart contracts can be written in the Solidity, C, C++ and Rust programming languages, after which they are compiled into the WASM format. The virtual machine uses a special adapter to process transactions by various shards.
The network rewards its community and active participants with its own EGLD protocol token (formerly ERD). It acts as a store of value and currency to pay for the use of the network. The coin also serves as a medium of exchange between platform users and validators. Users pay transaction fees in EGLD and validators provide their services.
The EGLD token allows developers to deploy smart contracts, protocols, and decentralized applications (dApps) on the platform. It provides participants with the ability to perform various actions on the network. Through staking, validation fees, and transaction fees, EGLD manages the Elrond network. In addition, EGLD has the functions of a governance token, allowing its holders to vote on important network decisions.
Is EGLD a good investment?
The project quite successfully solves the problem of blockchain performance. This is very important in the context of the growing popularity of cryptocurrencies and the influx of new users.
The high demand of the project is indirectly evidenced by the rather high place of its native token in the ranking of the most capitalized cryptocurrencies. At the moment, the coin occupies the 47th line of the rating according to CoinMarketCap, and the current ERD price is about 33.8 dollars per unit.
The Elrond ecosystem (now – MultiversX) is developing quite actively. The main application operating on the basis of the platform is the Maiar wallet with the possibility of staking. In December 2021, the Maiar DEX exchange launched on the network.
The team plans to issue regulated stablecoins on the basis of the network in the EU. To this end, in early 2022, it acquired the payment service provider Twispay, which has a license to issue virtual assets. In April of the same year, the Skynet EGLD Capital crypto fund was created.
The coin has good growth potential and deserves your attention. However, the project is relatively young and periodically encounters problems of a different nature, which is inevitably reflected in the price of the coin. The decision to invest part of the funds in EGLD as part of an aggressive strategy has the right to exist and can bring profit in the long term. However, it is worth considering the relative youth of the project and the presence of numerous ambitious competitors. Before making an investment decision, be sure to do your own research and do not neglect the diversification of your investment portfolio.