What is Elrond: Complete Guide

Elrond is a sharding architecture blockchain platform. Uses the SPoS (Secure Proof-of-Stake) algorithm for reaching a consensus.

Depending on how much work is being done, the Elrond Elrond blockchain can be broken up into several pieces, or “shards.” Each shard is its own network, and a different group of validators is in charge of running it.

Who Started Elrond and when?

Beniamin and Lucian Minchu, who are brothers, and Lucian Todea came up with the idea for the blockchain project. In 2017, work began on making the blockchain platform. In 2019, the Elrond token sale took place on the Binance Launchpad. In July 2020, the main network went live.

Elrond’s mainnet went live in July 2020, and it can handle up to 263,000 transactions per second, according to reports.

Beniamin Minchu, who worked on the team that made another blockchain platform called NEM, is in charge of Elrond. Between 2014 and 2015, he was in charge of the company’s marketing and community development.

The Minchu brothers also set up their own investment company called MetaChain Capital. Todea was in charge of the Soft32 project in the past.

What Problems Does Elrond Dolve?

The goal of the project is to solve the blockchain trilemma. To do this, the blockchain architecture needs to offer a lot of bandwidth, decentralization, and security at the same time. Because of how the blockchain is built, it works well even when there are a lot of requests.

In Elrond’s white paper, it says that the project’s network should be as fast as centralized payment systems. At the same time, the developers want to make sure that the system is very decentralized and safe from attacks.

The solutions used in Elrond are meant to cut down on the amount of data and the cost of computing. The development works with smart contract platforms of today.

According to the Elrond website, all of this lets you be a thousand times more productive than with analogs.

The people who made Elrond say that their blockchain platform can be used in many different ways. After testing, the developers put the mainnet online, saying that it could handle up to 263,000 transactions per second at its fastest.

How Does Elrond’s Secure Proof-of-Stake consensus system work?

Proof-of-Stake is the method used to figure out how to make new blocks. Transaction processing is done by the validator nodes that put money into staking.

Each shard has its own group of validators who come to a “local” agreement. The pieces of the shards are put together randomly, which keeps attacks from being planned. The function that figures out who is in the group takes as an argument the last block’s signature when it is added up.

From a group of validators, one is chosen at random to make a block, and the others confirm that it is correct. The stake and rating of a validator affect how likely it is that they will be chosen.

The validator’s rating also depends on how long they worked and how their previous work turned out. If this indicator falls below a certain level, the node is punished and may be taken off the list of possible candidates for finding a new block. If the validator breaks the network, it can be removed from the network.

Depending on what role it will play, the Elrond node can be set up on a computer, a smartphone, or a server:

A node that stores network data but doesn’t have an EGLD stake is an observer. An observer node is full if it stores the whole blockchain. If it only stores the last two epochs, it is light. Nodes can send messages to other nodes, but they don’t get paid for doing so.

The node that puts money into the stake is the validator. Takes part in getting the network to agree on something, confirms transfers, and is in charge of making blocks. Gets paid for his work through network commissions.

Fisherman is a node that checks to see if the blocks that validators present are correct. These nodes reject blocks that aren’t valid and get paid for doing so. Fishermen can’t be in groups that try to come to a decision.

How Does the Ecosystem of Elrond Change?

The people who made the blockchain say that it works better than centralized systems. The amount of work Elrond can do is proportional to the number of fragments. This lets you increase speed by splitting the network into more shards. However, for the mainnet to work, the segments need to be brought into sync, which makes it take longer for transactions to be confirmed.

The main program on the platform is the Maiar wallet, which lets you send and receive cryptocurrencies and stake them. On the Elrond network, the Maiar DEX decentralized exchange went live in December 2021. Later, a huge $1.29 billion program called a “liquidity stimulus program” for the ecosystem was announced. Its goal was to bring users and money into the ecosystem. Rewards were paid in Maiar DEX (MEX) tokens.

Someone broke into Maiar DEX in June 2022 and used a bug in the code to steal $113 million worth of cryptocurrency. After the Maiar event, DEX was turned off temporarily and the security hole was fixed.