Scalability and cost are two primary concerns facing major blockchain networks like Ethereum and Bitcoin, respectively. Polygon, Harmony, and Elrond, among other projects, have provided solutions. Elrond, in particular, has become popular due to providing creative concepts and answers for low costs, value growth, scalability, and security needs.
Elrond blockchain supports fintech, decentralized apps (DApps), and IoT applications, all under its roof. Elrond's virtual machine, powered by Web Assembly technology, facilitates the development and operation of Ethereum Dapps; its claims state it can execute 250,000 transactions per second for less than one cent, which makes its transactions six times faster than existing transaction speeds.
Elrond's main purpose is to increase decentralized network performance so it can compete more evenly against centralized ones through proprietary technologies like Adaptive State Sharding and Secure Proof of Stake consensus mechanisms. You will learn more about their operations, client services, and more in this article.
What Is Elrond?
Elrond is an open and decentralized blockchain network with smart contracts for running decentralized applications (Dapps). Two characteristics set it apart from other blockchain networks:
- Adaptive State Sharding.
- Secure Proof of Stake Consensus mechanism.
Elrond blockchain utilizes Adaptive Sharding Technology, or AST, to process data and transactions simultaneously across its network nodes. Sharding helps Elrond perform better as more nodes join up and boost capacity to over 100,000 transactions per second while offering decentralized features. One key difference between Elrond and other blockchain networks is that node participation does not require powerful hardware or a significant processing power boost to be active as a node on Elrond.
Common computer systems allow anyone to take part in the Elrond network as nodes, thanks to its special architecture that doesn't rely on Proof of Work (PoW) algorithms or their associated high energy consumption; instead, it uses Proof of Stake (PoS), where participants stack or deposit Elrond tokens (EGLD) before receiving rewards in the form of additional EGLD tokens as an incentive and ensure network security.
Elrond may still be early in its development stages, yet its creators believe it can become the cornerstone of an open global digital economy in the near future. Elrond can serve this goal via platforms offering value transfer protocols with simple deployment mechanisms for decentralized applications (Dapps). Therefore, Elrond features both technical and non-technical entrepreneurs on its team; some even had previous involvement in the NEM blockchain platform, while others worked at Google, Microsoft, or Intel before joining the Elrond team.
Elrond has utilized its safe Proof of Stake algorithm to effectively address issues related to excessive energy usage and expensive computing hardware requirements, and parallel transactions have been made possible, as well as increased scalability through its unique Sharding technology.
How Does The Elrond Network Operate?
Elrond blockchain architecture was designed by developers using Adaptive State Sharding in order to maximize scalability and accelerate transaction processing times, with Sharding implemented at every level - transactions, data storage systems, and network infrastructure all making use of Sharding in one way or another.
Adaptive shredding differs from blockchain shredding by improving chain communication and optimizing network performance through parallel processing - increasing TPS (transaction processing per second). Nodes may engage with the Elrond network in three distinct ways.
- Validators: Validators participate in the consensus process to process transactions and maintain network security. Validators must place an EGLD token onto the network as collateral in order to accomplish their mission successfully; any errors or disruption will lead to penalties, such as losing stake.
- Observers: Observers, or passive network users, serve a valuable purpose: they provide assistance. Their primary task is either maintaining two periods of general ledger history as an extra revenue stream for themselves or serving as full nodes and storing all blockchain history within their system. As observers, they are not required to stake any EGLD coins for participation - their participation can even be voluntary.They provide Elrond with part of their system as server space.
- Fishermen: As soon as blocks have been created and processed by validators, users known as fishermen review them to make sure that they contain valid information and identify invalid blocks - they're then rewarded. Observers or validators who choose not to participate can act in their place during consensus-building phases and are also considered fishers.
Elrond uses Secure Proof of Stake (SPoS), as previously indicated, to achieve consensus among its network nodes and coordinate them through this distributed consensus mechanism. Like Proof of Stake (PoS), Elrond software runs on computers running Secure Proof of Stake to safeguard its network nodes while validating transactions and dispersing new EGLD coins into circulation.
Confirmation nodes have the task of building blocks on individual shards rather than verifying every transaction or building block across the network since Elrond uses split chains rather than one continuous one. Fisherman nodes evaluate the reliability of built-in blocks while simultaneously adding nodes to additional networks and inspecting creations by other block builders; participants receive payment in the form of EGLD when new blocks are generated and added to Elrond.
What Is Elrond's Roadmap?
Elrond's distributed and peer-to-peer networks enable low-cost systems and transactions at acceptable performance with acceptable costs, thanks to Elrond addressing blockchain's most challenging consensus and sharding issues. A few notable accomplishments for Elrond include:
- A pioneer of blockchain network architecture for Sharding technology.
- This network can easily support over 100,000 transactions per second due to its ability to handle 15,000 transactions every second.
- Six-second transaction execution latency with $0.001 transaction fees.
- Six-second transaction execution latency and a $0.001 transaction fee.
- Smart contract execution offers opportunities for stakes of EGLD coins.
Elrond developers have outlined their future roadmap for the protocol as follows:
- Launching the 2.0 version of the Maiar app.
- Supplying blockchain governance.
- Launching DeFi 2.0, which will allow synthetics and lending.
- Vendor Yielding.
- Strategically establishing multi-country hypergrowth.
What Are Elrond Network Services?
Elrond enables its users to generate tokens, complete transactions, and develop smart contracts like many other blockchain networks do. Elrond's services include its wallet application (Elrond Wallet), Maiar decentralized application, and chain interaction; this latter feature is provided via its services platform, Elrond.
-
Maiar Decentralized Application
Establishing an ecosystem for decentralized application development is one of the main functions of the Elrond network. Maiar, one of Elrond's original Dapps, serves to increase privacy while being a quick browser; other features and functionalities available within Maiar include sending, receiving, storing, and staking EGLD coins - you can even directly purchase it.
-
Elrond Wallet
Elrond Wallet provides safe storage and sends/receives eGold tokens; additionally, decentralized apps built upon this network provide another advantage.
-
Cross-Chain Interoperability
Elrond aims to offer cross-chain interoperability as part of its attempt to become even more decentralized by connecting various external services and developing the Elrond Virtual Machine (EVM). Smart contracts written in Rust, C++, C#Typescript may also be supported by EVM; users may securely transfer Ethereum and ERC-20 tokens without exchanging between networks using its Adapter Mechanism feature.
Elrond Network Design
Elrond blockchain launched for public use to offer distributed apps and businesses security, scalability, decentralization, maximum operational efficiency support from developers, and cross-chain interoperability capabilities. Elrond Network prides itself on being an "internet-scale blockchain," meaning that, unlike most other blockchain networks, its transactions manage transactional throughput equivalent to that of large internet platforms.
Elrond's crypto team boasts of their network's capacity to handle 15,000 TPS transactions at only one cent of each transaction cost, giving a throughput rate comparable to Bitcoin (an average of 7 TPS). Elrond uses its unique Secure Proof-of-Stake consensus mechanism, validator network architecture, sharding technology, and native coin eGold (gTLD).
Secure Proof Of Stake (SPoS)
Elrond Network uses Secure Proof-of-Stake (SPoS), an advanced Proof-of-Stake consensus algorithm with special innovations, as its Proof-of-Stake (PoS) consensus algorithm. Nodes on Elrond are servers, smartphones, or computers running Elrond node client software to relay and process data across its network - each node serves a distinct function within Elrond. In contrast, all PoS networks rely on node systems to exchange information and reach consensus.
- Elrond's main nodes, known as validators, are responsible for handling network transactions for an exchange fee in return for eGLD tokens.
- Observers are inactive network nodes who only read and transmit data, not being compensated like Validators are. Instead, these nodes do not need to stake any eGLD coins to use this network.
- Fishermen nodes are special nodes that, once processed by validator nodes, use data verification techniques to check or challenge block data. The reward for Fishermen nodes depends upon how quickly and successfully they find malicious actors.
Elrond Network's SPoS mechanism includes near instantaneous validator selection through blockchain sharding, which divides large blocks into more manageable chunks for optimal efficiency and accelerates transaction throughput. It reduces validators' verification burden by randomly assigning each node into distinct shards of blockchain data stored there. Validator nodes then receive assignments randomly throughout these various shards of information stored thereon.
SPoS uses Boneh-Lynn-Shacham (BLS) multi-signature technology to select nodes within each shard randomly and completes validator selection within 100 milliseconds (0.1 seconds), making SPoS one of the fastest blockchain networks currently in operation. This level of speed typically reserved for internet networks is unparalleled within blockchain networks.
Elrond's Blockchain Sharding Innovations
Elrond Network employs what's known as Adaptive State Sharding by integrating three standard sharding techniques--network sharding, transaction sharding, and state sharding--into a well-balanced, high-performance system. Transaction sharding determines how transactions are assigned shards, while network sharding assists with allocating nodes across specific shards; its most unique characteristic lies within state sharding, which sets Elrond apart from its rivals.
How It Works: Transactions often involve accounts present on different shards, and randomness helps maintain security by randomly shuffling nodes within network shards to improve resilience to various attacks. Unfortunately, when nodes move across to new shards, they must sync quickly; state sharding allows this transition process to happen much more rapidly by only downloading part of their new state on each move rather than downloading everything simultaneously.
Elrond also uses an innovative mechanism known as a Metachain to synchronize all its shards within its network. Running on its own shard, the Metachain facilitates cross-shard operations supporting the Elrond crypto ecosystem through direct real-time communications among all shards.
Read More: Unlocking the Potential: How Blockchain Development Solutions Can Revolutionize Your Business
Smart Contracts On Elrond
Arwen WASM Virtual Machine, commonly called Elrond Virtual Machine (VM), primarily creates smart contracts on Elrond. This feature works with any programming language - Rust, C/C++, C# Go, and Typescript can all generate Web Assembly smart contracts - that can generate Web Assembly smart contracts, making Elrond's sophisticated Rust smart contract framework the preferred one for creating these smart contracts.
Ethereum smart contracts run smoothly on Arwen WASM VM thanks to Elrond VM's smart contract engine, which is designed to work alongside Ethereum Virtual Machine (EVM). Furthermore, Arwen WASM VM was engineered specifically so as to achieve full interoperability between external blockchain systems for easy value transfer between protocols.
High Speeds & Low Costs Thanks To Protocol Integration
Elrond directly incorporates Elrond ESDT standards. One significant effect is that tokens issued via Elrond may have smaller storage footprints and costs since they do not need their own smart contracts, while token transfer transactions do not rely on processing by Virtual Machine for processing; rather, transfers take place simply by adding token ID/transfer amount/date into the data field of standard TX cost transactions - thus significantly decreasing transfer speeds. Gas requirements become reduced to the regular cost of TX and an extra storage fee, which ensures regular TX cost plus storage fee/transaction cost plus storage fees to allow faster transfer speeds.
True Ownership Via Smart Accounts
Elrond Smart Accounts each come equipped with their own data trie, making them capable of accommodating key-value storage, which stores an infinite number of tokens - meaning in third-party smart contracts, they are linked directly to an account rather than just associated with its address. Even in areas previously considered impossible for decentralization to succeed, true ownership embodied by low-cost blockchain networks will act as an irresistibly persuasive argument in favor of adoption.
Native Use Of Tokens In Smart Contracts
Elrond Smart Contracts, by default, are set as non-payable, meaning any direct balance transfers made will immediately be rejected, saving time and money when simple mistakes arise. When set as "payable," these contracts become capable of receiving tokens through method invocation using data entered in their fields, potentially saving the user from unnecessary frustration in this scenario.
High-Speed & Low Cost For NFTs & SFTs
Elrond NFTs and SFTs combine extra metadata with an ESDT token for easy management and transfer, such as links to external information like media files on decentralized file systems or royalties information for each transaction involving their NFT. This makes Elrond NFTs and SFTs ideal solutions to mint transactions at fast speeds at reasonable costs.
And finally, expenses related to NFT and SFT operations are practically nonexistent:
- $0.20 to register an NFT brand -> no Ethereum equivalent.
- $0.01 to create an NFT -> $100 - $600 on Ethereum.
- $0.01 to transfer an NFT -> $100 on Ethereum.
Fuel For Elrond DeFi 2.0
The next significant mainnet upgrade will feature the deployment of Elrond's ESDT standard, which is currently accessible on Elrond Public Devnet. Elrond Network's innovative token offerings will also be fully leveraged during the launch of Maiar Exchange and other components on the Elrond DeFi 2.0 module, which enables stable coin transfers at almost instantaneous speeds and minimal expense wherever users may be located, quick swapping resources quickly and affordably with NFTs which have exquisite user experiences which make them accessible worldwide.
Conclusion
Elrond has developed its NFT framework, Smart Accounts, specifically to support non-fungible tokens (NFTs). Similar to regular blockchain network accounts, these Smart Accounts facilitate key-value data storage directly at the account level, allowing users to store emails, bitcoin addresses, health information, private identity data, and proof of citizenship directly on Elrond Network accounts, reducing smart contract bloating while at the same time providing users with digital asset ownership proof without using Elrond Virtual Machine for storage or proof.
