What is Elrond (EGLD)?

In the blockchain world, scalability has become one of the top priorities. Developer teams are looking for ways to speed up networks, eliminate network congestion, and increase the number of transactions that can be processed per second. However, this remains one of the fundamental problems that large networks like Bitcoin and Ethereum are still struggling with. One of the projects that aims to provide a solution to this problem is Elrond. This project, which changed its name in 2023 and is now known as MultiversX, has left its mark on the cryptocurrency space. Apart from the MultiversX transformation, Elrond has been reshaped with a metaverse and Web3-focused vision, as well as being a highly efficient blockchain. With its Romanian origins, Web3 has become one of the Romanian projects. This system, which enables the creation of crypto assets with the support of smart contracts and allows transactions to be made in seconds, now aims to build a much broader digital economy. If you have any questions about Elrond (currently known as MultiversX/EGLD); If you are wondering what Elrond is, what is EGLD coin, let's take a look at the details of this project together...

Elrond's Definition and Origin

Elrond is a Layer 1 blockchain platform known today as MultiversX, offering high scalability, low latency and strong security features. This platform is specially designed for distributed applications (dApps), enterprise solutions and the next generation internet economy. It addresses areas such as DeFi, metaverse and Web3 applications, while providing developers with a scalable infrastructure and NFT support. Elrond was founded by a Romania-based team in late 2017. The founders include Beniamin Mincu, Lucian Mincu and Lucian Todea. Before Elrond, the Mincu brothers founded a crypto asset investment fund called MetaChain Capital and an ICO information platform called ICO Market Data. It is also known that Beniamin Mincu previously worked in the marketing and community development areas of the NEM project. The main motivation behind Elrond’s development is to solve one of the biggest challenges faced by blockchain technology, the blockchain “impossible trilemma”. This trilemma refers to the difficulty of simultaneously providing security, decentralization, and scalability. Elrond is trying to stand out with innovative solutions that aim to offer these three elements together. So, how does Elrond work at this point? Elrond has focused on two main technologies to solve blockchain problems. The solutions in question are as follows:

1. Adaptive State Sharding: This technology dynamically divides the network into shards, allowing each shard to process transactions in parallel. In this way, the network can perform high transaction volumes with low latency and low cost.
2. Secure Proof of Stake (SPoS): Elrond’s consensus mechanism, SPoS, combines the amount of staked tokens and randomness in the selection of validator nodes. This structure provides energy efficiency while increasing the security and fairness of the network.

Thanks to these technologies, Elrond has reached the capacity to process up to 15,000 transactions per second and has made its name among the fastest networks. Meanwhile, Elrond is also known for its EGLD token. If we talk about the EGLD token features; this token is the native token of the network and has many uses. It is used to pay for transactions on the network, to generate passive income through staking, and to act as a validator to ensure the security of the network. It also offers voting rights in governance processes.

Elrond History: Major Milestones

So where exactly did Elrond's story begin? What were the major milestones? Elrond started as a technical project and became one of the big names in the web3 space. The project, which was founded in 2017, has seen many important developments, from early investment successes to the mainnet launch, from token conversion to taking on a brand new identity under the name MultiversX. In this section, we take a look at the prominent stops on Elrond's journey.

2019: A Successful IEO Process on Binance Launchpad

Elrond raised $3.25 million with its Initial Exchange Offering (IEO) on Binance Launchpad in June 2019. During this process, 25% of the total token supply was distributed. The project, which had previously raised approximately $1.9 million in private investment rounds, thus set off with a total capital of $5.15 million. So why was Binance Launchpad so important to Elrond? Binance Launchpad is a platform where new crypto projects sell their tokens for the first time on Binance. Thanks to this system, projects receive early investment, while users have the chance to buy tokens at a low price. These sales, which take place in a secure environment, provide visibility and liquidity to the project. They also offer potential high-yield opportunities to investors. Therefore, Elrond or MultiversX started its life with a vote of confidence from Binance. According to EGLD's token economy, the initial distribution of tokens was as follows:

2020: Mainnet Launch and Transition from ERD to EGLD

Elrond's mainnet was officially launched in July 2020. With this launch, the project's native token, ERD, was renamed to EGLD (eGold) in September 2020 as part of a new token economy. A special conversion process was launched for users to exchange old tokens for new ones.

2021-2023: Maiar Wallet, DeFi, NFT, and Launchpad Expansion

In January 2021, Elrond's official wallet, the Maiar application, was launched. So what is a Maiar wallet and what does it do? Designed to store, send, receive, and perform various transactions with EGLD tokens, this application appealed to a wide audience thanks to its user-friendly interface. Maiar has a non-custodial structure, meaning your assets are completely under your control. The security system is quite flexible: it starts out easy, and as your wallet grows, advanced measures come into play. In other words, it guides you according to your usage habits. Thanks to usernames called “Herotags”, you don’t need to know someone’s number to pay them, you just need to type their username. The app also allows staking, multiple coin support, browsing crypto news, and sending crypto.

Similarly, Elrond launched Maiar Launchpad, which offers early investment opportunities for new projects, and Maiar DEX as a decentralized exchange (DEX).

However, these projects received a name change to MultiversX in late 2022. Currently, Maiar wallet has become MultiversX Wallet, Maiar Launchpad has become xLaunchpad, and Maiar DEX has become xExchange.

During the same period, the Elrond ecosystem grew rapidly; It hosted more than 100 projects and became integrated with stablecoins, wallets, validators, and payment systems. DeFi projects (Orion, Reef) and NFT support also contributed to this growth.

Transformation to MultiversX

As mentioned above, Elrond entered a significant brand transformation process in 2022 and took the name MultiversX. According to the project's own statements, Elrond entered this process by taking the name MultiversX in parallel with the increasing interest in the metaverse and developments in this field. According to their own statements, this name change was made to reflect the project's expanding vision to the metaverse and its commitment to the future of the internet. As part of the rebranding, not only the name but also the logo and platform design were updated.

Why is Elrond Valuable?

To understand why Elrond attracts so much attention, it is necessary to look not only at its technology but also at the user experience it offers. Because Elrond (or MultiversX as we now know it); In addition to being a fast blockchain, it is also a user-friendly, scalable and developer-focused ecosystem. In other words, while it performs tens of thousands of transactions per second at a low cost, it also manages to offer this technology with a simple and accessible interface. Now, let's take a look at the main technical features that make Elrond stand out and why it offers a valuable infrastructure.

Adaptive State Sharding: Maximum Efficiency with On-chain Sharding

MultiversX uses an advanced mechanism called Adaptive State Sharding to optimize scalability. So, what is Adaptive State Sharding? This system divides the network into many shards, allowing each shard to perform operations simultaneously. In this way, the processing load is balanced, network congestion is prevented, and thousands of transactions can be performed at low cost. The shard structure increases efficiency by dynamically merging and separating according to the needs of the network.

According to the project’s own description, sharding in the MultiversX network was designed from the ground up to address the complexity of combining network sharding, transaction sharding, and state sharding. The result is a cohesive protocol design that not only achieves full sharding, but also achieves the following goals. The protocol’s goal is to:

• Scalability without impacting availability: Increasing or decreasing the number of shards in the network should not disrupt the operation of the system. When making these changes, it is expected that only a very small group of nodes will be affected, and the overall state of the system will be updated smoothly.
• Fast dispatch and instant traceability: It should be possible to easily and unambiguously (deterministically) calculate which shard a transaction will be directed to. This calculation should require very little processing power and should not require additional communication between different nodes.
• Efficiency and adaptability: The goal is for all shards in the network to operate as balanced as possible at all times. That is, the transaction load should be distributed evenly, and one part should not be overloaded while the others are idle.

Secure Proof of Stake (SPoS): Energy-Efficient Consensus Mechanism

Elrond’s consensus model is called Secure Proof of Stake (SPoS) and is known as a faster and more secure version of the classic PoS system. This model is designed to make both how validator nodes are selected and how these nodes work in the block creation process more efficient. Validator nodes are determined by a combination of the amount of EGLD they stake and the random selection. According to the project’s description, this randomness is so secure that it cannot be predicted or manipulated from the outside.

This selection process is very fast. Because it usually takes less than 100 milliseconds. Because there is no need for extra messaging in the system; once the randomness is generated, the selection is completely automatic. Thanks to this, the total block production time is reduced to just a few seconds. Such fast rounds also have a security advantage: Even if a malicious person wants to influence a block in the system, it is almost impossible to manipulate it in such a short time.

SPoS, like other Proof of Stake systems, looks at how much EGLD they have staked when determining who will be a validator. But this is not the only criterion. Each validator also has a score (rating). This score is determined by how well they have worked in the past. In other words, the system rewards not only those who stake a lot, but also those who work properly. During block production, a special multisignature system is used. This ensures that the block prepared by the block producer is signed by the validator group in two rounds of communication.

Up to 15,000 Transaction Capacity Per Second

Thanks to the Adaptive State Sharding and Secure Proof of Stake algorithms mentioned above, the Elrond network has the theoretical capacity to process 15,000 transactions per second. The highest speed measured was 263,000 transactions per second. This feature makes it one of the fastest blockchain infrastructures. The average transaction cost is only around $0.001. This makes Elrond a very attractive option for both users and developers.

User-Friendly Wallet Experience with Maiar

MultiversX’s official mobile wallet, Maiar (MultiversX Wallet), allows users to easily manage their EGLD tokens. One of Maiar’s most striking features is that an account can be created without a password, private key or recovery phrase.

Who is the Founder of Elrond?

So, who is behind this fast blockchain? Who is the founder of Elrond? First of all, Beniamin Mincu comes to mind. If you ask who Beniamin Mincu is, we can answer as follows: Beniamin Mincu is the co-founder and CEO of MultiversX (formerly Elrond). He is described as a technology visionary. He was one of the early blockchain pioneers in Europe. Because he was on the NEM.io core team from 2014 until he founded Elrond. Beniamin Mincu is also the co-founder of cryptocurrency investment fund MetaChain Capital and initial coin offering (ICO) data aggregator ICO Market Data, along with his brother Lucian Mincu. Beniamin Mincu co-founded Elrond in 2017 with Lucian Todea and his brother Lucian Mincu. Lucian Todea is the Founder/CEO of software review and download site Soft32 and a partner of mobile payment app mobilPay.

The team of Mincu brothers and Lucian Todea developed the Elrond network to address issues related to blockchain scalability. Their goal was to create a platform that is interoperable and highly scalable, better than existing blockchain platforms. The MultiversX team is comprised of engineers, designers, and researchers from various technology companies, including Intel, Microsoft, ITNT, and Soft32. The founding team designed MultiversX to provide a highly scalable blockchain that addresses Metaverse, DeFi, and Web3-focused applications. They specifically built it as a blockchain platform that offers speed and security. Their vision was to provide a solution to the blockchain challenges we mentioned earlier and create an “internet-scale” blockchain. To achieve this vision, they utilized innovative technologies such as Adaptive State Sharding and Secure Proof of Stake (SPoS). The platform’s growth strategy focused on building the ecosystem with tools such as the user-friendly Maiar app and support for DeFi, NFTs, and various projects and partnerships. The EGLD token has become a key component for access, usage, security, and growth within the network. Staking incentives also played a key role in securing the network. In addition, the team says it designed eGold for simplicity and global adoption. In general, the goal is to position MultiversX as a distributed blockchain for next-generation applications.

Frequently Asked Questions (FAQ)

Below are some frequently asked questions and answers about MultiversX (aka Elrond):

• What is the Elrond network, how does it work?: Elrond is a Layer 1 blockchain network developed for high-speed and low-cost transactions. It can process up to 15,000 transactions per second thanks to Adaptive State Sharding and Secure Proof of Stake (SPoS) technologies.
• What is the EGLD coin used for?: EGLD (eGold) is the native token of the Elrond network. It is used to pay transaction fees, perform staking, contribute to network security, and vote in governance.
• What makes Elrond different from other Layer 1 networks?: Elrond offers high scalability by dynamically dividing its network into shards with Adaptive State Sharding. It works both fast and energy efficient thanks to SPoS. This combination makes the project stand out from a technical perspective.
• How is Elrond staking done?: EGLD tokens can be locked by staking them to validator nodes via a wallet (e.g. MultiversX Wallet/formerly Maiar). In return, users earn staking rewards as passive income.
• Who is the founding team?: Elrond was founded by a team based in Romania. The founders are Beniamin Mincu, Lucian Mincu and Lucian Todea. The team consists of experienced engineers and entrepreneurs who have worked in large technology companies in the past.

For more content on Elrond and Web3 infrastructures, stay tuned to our JR Kripto Guide series.