The Elrond EGLD token has grown explosively in the last year, but what is the Elrond platform all about, and how does it measure up against the competition?
Elrond is a smart contract platform that supports things like dApps and NFTs, and like other platforms that came after Ethereum, Elrond uses sharding technology to improve the speed and scalability of the blockchain.
Sharding splits the blockchain into multiple “shards” that run parallel to each other.
Transactions are processed separately on the shards, and the results from all the shards are synced and written to the blockchain.
This saves the blockchain from the bottleneck effect, where all the transactions are trying to push through on one chain, all at once.
For this reason, Elrond is marketed as an “internet-scale blockchain.” According to the development team, Elrond has already achieved 15,000 transactions per second (TPS) with sharding, and speeds as high as 263,000 TPS on the testnet.
Other more popular blockchains, like Bitcoin and Ethereum, can currently only process 10 or 20 transactions per second on the base layer. However, these OG blockchains are also exploring scaling solutions which should improve their performance.
The team behind Elrond is strong, and consists of the CEO Beniamin Mincu, the COO Lucian Todea, and more than a dozen engineers and blockchain researchers.
The project was founded in 2018, it raised $5 million via an ICO, and managed to receive further backing from Binance Labs and the Binance Launchpad.
Elrond uses the EGLD token for transactions on the blockchain, participating in governance, and for distributing staking rewards in their proof-of-stake consensus mechanism.
According to the Elrond Twitter, there are now 831,000 account holders on Elrond. Stakers have locked up 1.8 million EGLD and there’s been a cumulative total of nine million transactions on the network. That may sound like a lot, but to put it into perspective, Ethereum, the leading smart contracts platform, is currently averaging around 1.3 million transactions per day.
But that’s not to say that Elrond doesn't have some real-world adoption. They’ve partnered with Shopping.io, and this partnership will give EGLD hodlers a chance to spend their tokens at some of the world’s largest merchants like Walmart and eBay. The Elrond development team have also announced plans to bring NFTs to the platform. The first series of NFTs will be “eGold vaults”, a limited edition, “store-of-value” themed run of NFTs for investors who wish to signal they are early adopters of the Elrond blockchain! Currently, there are only a handful of dApps built on Elrond, compared to over 2800 built on Ethereum.
The project is trying to address this with one of its most unique features: a royalty distribution mechanism where 30% of the gas spent on smart contract calls go to its author (the person who writes it) at no extra cost for the caller (the person who chooses to interact with the smart contract). This means that developers can potentially be paid each time someone interacts with their work. Time will tell whether this incentive will bring developers over to Elrond, and result in a flourishing dApp ecosystem that can challenge or at least thrive alongside some of the bigger smart contract platforms in the space!
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