What is MultiversX (Elrond)?


MultiversX is a blockchain protocol that aims to provide extremely high-speed transactions through the use of sharding. The project positions itself as a technology ecosystem for the new internet economy, including fintech, decentralized finance, and the Internet of Things. Its smart contract execution platform is said to be able to handle 15,000 transactions per second, with a latency of six seconds and a transaction cost of $0.001.

Key Takeaways

  • MultiversX (Elrond) is a blockchain-based platform and cryptocurrency (EGLD) that allows users to create and develop dApps and tokens to create a new internet economy.
  • The project aims to resolve the problem of traffic congestion on blockchains by offering solutions for scalability. The MultiversX network can reportedly achieve up to 15,000 transactions per second.
  • EGLD is the native token used for staking, voting, and transacting on the network.

According to reports, the network can handle up to 15,000 transactions per second, making it one of the fastest blockchain networks available. The native token, known as eGold or EGLD, is a multi-purpose cryptocurrency used for staking, voting, and transacting on the network. MultiversX (Elrond) also boasts a latency of six seconds, the ability to scale with sharding, and attractive transaction fees of $0.001.

How does MultiversX (Elrond) work?

The MultiversX (Elrond) network offers support for smart contracts, transaction processing and token issuance. It allows developers to utilize programming languages like Rust, C and C++ to build custom logic (smart contracts) and decentralized applications (DApps).

A unique aspect of MultiversX (Elrond) is its implementation of sharding and proof-of-stake which enables it to process around 12,500 transactions per second.

Adaptive State Sharding

Adaptive State Sharding is used in which the network is divided into smaller subsets called “shards” and nodes are responsible for validating transactions within their shard and then broadcasting them to the central blockchain (termed as metachain) for settlement.

To prevent collusion among validators in each shard, MultiversX (Elrond) shuffles one-third of the nodes validating transactions in each shard to a new shard every 24 hours.

Before settling transactions on the main chain, MultiversX (Elrond)’s Adaptive State Sharding uses a third of existing nodes to validate these transactions. Every 24 hours, nodes are reshuffled to new shards in a continuous process that prevents validators from colluding as they are switching shards. Instead of operating on a single chain, MultiversX (Elrond) divides the network into shards governed by the Secure Proof of Stake protocol.

Validators verify the block producers to ensure that everything is in order and all transactions are legitimate. After the block validation is complete, validators synchronize across the network with other shards. Once the shards are synchronized with validators, the settlement of transactions is completed in bulk. Network participants get rewarded with EGLD to help secure the network.

Secure Proof of Stake (SPoS)

Secure Proof of Stake (SPoS) is a key feature of the MultiversX (Elrond) network. It is a PoS type of consensus that keeps the running blockchain in sync.

Like traditional Proof of Stake (PoS), SPoS is used by computers running the MultiversX (Elrond) software to secure the network, validate transactions, and distribute new EGLD coins.

However, since MultiversX (Elrond)’s network is divided into shards rather than a single chain, its SPoS consensus mechanism is used to select validating nodes to produce blocks within a shard rather than the entire network.

To reach a final settlement, validators must check the work of block producers and sync with other shards in the network. Once a batch of transactions is successfully added to the MultiversX (Elrond) blockchain, the contributors are rewarded with EGLD tokens.

EGLD Token

The MultiversX (Elrond) network rewards active participants with EGLD tokens. EGLD, or Electronic Gold, is MultiversX (Elrond)’s native token and serves as a store of value currency to pay for network usage and as a medium of exchange between platform users and validators. Users pay transaction fees in EGLD, and the token enables Elrond developers to deploy smart contracts, protocols, and dApps on the platform and allows participants to perform any network action. Through staking and validation rewards, as well as transaction fees, EGLD manages the MultiversX (Elrond) network. Additionally, EGLD functions as a governance token, allowing its holders to vote on network decisions.

From the platform’s launch in 2018 until September 2020, MultiversX (Elrond) used a native currency called Elrond with the symbol ERD. In September 2020, a conversion occurred in which ERD holders received 1 EGLD for every 1,000 ERD they owned. While there was no maximum supply of ERD, the supply of EGLD was capped at 31,415,925 coins.

MultiversX FAQ

Who Are the Founders of MultiversX (Elrond)?

MultiversX (Elrond) was co-founded in late 2017 by Beniamin and Lucian Mincu, and Lucian Todea as a solution to the issue of blockchain scalability, which they saw as the most pressing problem facing the industry.

Before MultiversX (Elrond), Mincu brothers co-founded MetaChain Capital, a digital asset investment fund, with Beniamin serving as CEO and Lucian as CTO. They also co-founded ICO Market Data, an aggregator of information on initial coin offerings.

Beniamin Mincu has also held positions in product, marketing, and community for the blockchain platform NEM from 2014 to 2015 and is an early investor in projects such as Zilliqa (ZIL), Tezos (XTZ), Brave, and Binance. Lucian Mincu has additional experience as an IT engineer and security specialist, having worked with Uhrenwerk 24, Cetto, and Liebl Systems.

What Makes MultiversX (Elrond) Unique?

MultiversX (Elrond) distinguishes itself with the use of Adaptive State Sharding, a type of sharding that divides the network into smaller fractions so that nodes can validate transactions and network operations by resolving one partition at a time. This allows the network to process thousands of transactions per second while charging low fees.

MultiversX positions itself as a blockchain platform for the new internet economy, decentralized applications, and enterprise use. Its main advantage is its high scalability, claiming to be the first blockchain network that has implemented state, network and transaction sharding. According to its economics paper, it aims to build up its ecosystem and establish EGLD as a store-of-value asset.

In order to achieve this goal, the network operates on 2,169 validator nodes which are divided into four shards: three execution shards, each capable of handling 5,400 transactions per second, and one coordination shard, known as the “Metachain.” Elrond’s adaptive state sharding architecture fully shards state, transactions, and network. It can scale by adding an additional shard when throughput demand is not met. It was tested to run 263,000 TPS in a public environment with 1,500 nodes from 29 countries grouped in 50 shards.

How Is the MultiversX (Elrond) Network Secured?

The MultiversX (Elrond) network uses a proof-of-stake consensus algorithm called secure proof-of-stake. In this process, nodes must hold EGLD tokens to be eligible to validate transactions. Each validator is assigned a rating based on their past activity, which determines their likelihood of being selected. Validators with low ratings may be fined and can also be removed from the network and have their stakes slashed if they act against the integrity of the network.

Validators are chosen randomly in a way that cannot be influenced by previous selections, and they are periodically shuffled between different shards to prevent collusion. Communication between nodes is secured using modified Boneh-Lynn-Shacham (BLS) multi-signatures for strong cryptographic protection.

Final Thoughts

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