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Buy Elrond (EGLD) for exposure to DeFi scaling that works

elrond egld

When a coin outperforms strongly in a red day(s) for markets, it is time to sit up and take notice – Elrond (EGLD) is just such a coin.

Elrond was listed by eToroX in December – its first altcoin minnow. For those that don’t know, eToroX is the eToro investment platform’s institutional-grade crypto trading venue.  EGLD’s listing there was something of a vote of confidence in the project.

And what is that confidence based on? It’s the technology stupid, as Bill Clinton once didn’t say.

Elrond describes itself as a blockchain platform for the new internet economy, decentralised applications and enterprise use, so you could say it doesn’t lack ambition!

Its main selling point is its high scalability, claiming – convincingly – that it is the first blockchain network in which state, network and transaction sharding have all been implemented. According to its economics paper, it seeks to build out an ecosystem to establish EGLD as a store-of-value asset.

How Elrond works

To achieve this goal, the network runs on 2,169 validator nodes split into four shards: three execution shards, capable of 5,400 transactions per second each, and one coordination shard, the ‘Metachain’. Elrond’s adaptive state sharding architecture completely shards state, transactions and network. It can scale by adding an additional shard when the throughput demand is unmet. It was tested to run 263,000 TPS in a public environment with 1,500 nodes from 29 countries grouped in 50 shards.

In order to increase adoption, the project also supports developers building on the platform, allowing them to earn 30% of smart contract fees as royalties.

The company maintains a supply of EGLD tokens to stake on the network during its first year, with validator nodes receiving a 36% annual percentage rate.

Elrond is a new blockchain architecture, designed from scratch to bring a 1000-fold improvement in throughput, execution speed, and transaction cost.

To achieve this, Elrond introduces two key breakthroughs: a novel Adaptive State Sharding mechanism, and a Secure Proof of Stake (PoS) algorithm, enabling linear scalability with a fast, efficient, and secure consensus mechanism.

In contrast to Bitcoin, which can process 7 transactions per second, or Ethereum, which can process 15 transactions per second, Elrond can process more than 10,000 transactions per second, with 5-second latency, and 100x less cost than Bitcoin or Ethereum.

Who is behind Elrond?

The founders have been around the block. In late 2017 brothers Beniamin and Lucian Mincu co-founded Elrond, alongside Lucian Todea, as a solution to the perennial problem of blockchain scalability.

Prior to Elrond, Beniamin and Lucian Mincu co-founded MetaChain Capital, a digital asset investment fund, with Beniamin Mincu serving as chief executive and Lucian Mincu as chief technology officer. The pair also co-founded ICO Market Data, an aggregator of information around initial coin offerings.

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

Todea is a serial tech entrepreneur who previously founded and served as CEO of Soft32, a software review and download site, and a partner of mobilPay, a mobile payments application. He is also an angel investor, having invested in biometrics tech company TypingDNA and accounting platform SmartBill.

Elrond price action bucks the trend

Elrond is listed at 41 on the coinmarketcap league table of largest crypto projects and its price action of late has shown significant momentum that has been strengthening despite heightened market turbulence.

Its price is up 21% at the time of writing and 58% over the past seven days.

In early December rumours of big listing news began to circulate and the price began to stir. Then on 23 December the rumour became fact, with the listing on eToroX. Since then the price has been on a bull run, ignoring the ups and downs of the bitcoin price.

The price is likely to pull back from its current all-time high at $58 so choose your entry point carefully. Also bear in mind that on past equity market turbulence, bitcoin has failed as a safe haven port, so the current fluid situation triggered by the GameStop price action and the WallStreetBets retail investor phenomenon, could have a bearing.

For now bitcoin is firming above $30,000, which is promising.

If those short squeeze stock wins start becoming big losers, then the selling could easily spread to crypto, given the overlap in the market participant demographic.

But short-termism aside, Elrond has great tech and the first DeFi app to launch on its blockchain – Maiar – promises to bring a truly scalable non-custodial digital wallet solution and payments app to the masses.

The project announced on Twitter yesterday (27 January 2021) the first cross-chain DeFi experiment on the blockchain using automated marker maker (AMM) PancakeSwap on the Binance Chain.

…and don’t forget UniSwap

Elrond looks like it could become an important player in DeFi and that is a huge plus given the solidity (see what I did there) shown by UniSwap (UNI) over the past few days, when all around has been bleeding.

elrond price chart
Elrond currently trading at $60 (EGLD-USD), 28 Jan 2021. Courtesy CMC

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      Gary McFarlane is a cryptocurrency analyst for UK investment platform Interactive Investor and has a passion for all things crypto. He received the ADVFN International Financial Award for Best Cryptocurrency Writer 2018. Gary is also the production editor at respected UK investment magazine Money Observer, where he initiated coverage of bitcoin in 2013.