The Elrond network uses Proof of Stake and the eGold governance token to offer many features to users interested in blockchain technology
In this beginner’s guide, we look at Elrond and the EGLD token. Fans of J. R. R. Tolkien’s Lord of the Rings and Middle-Earth series of books will notice that Elrond’s name sounds familiar because Elrond is also the name of the Lord of Rivendell from the Lord of the Rings.
What is Elrond?
Elrond is a blockchain designed for scalability and significant transaction throughput thanks to the adaptive state sharding system Elrond incorporates. Sharding enables transactions to be handled rapidly by multiple validators.
Elrond was founded in 2017 by Beniamin Mincu, Lucian Mincu, and Lucian Todea, who acts as Elrond’s CEO, COO, and CIO, respectively. Elrond says its mission is to create a global, transparent, near-instant, non-inflationary financial system, and give anyone, anywhere, easy access to it.
The Elrond Network
The Elrond network is comprised of three main components:
Elrond explains Shards as smaller partitions of the Elrond network used for scaling. A shard is responsible for a section of the network and transactions.
Related: Proof of Work vs Proof of Stake
According to Elrond, the Elrond network Metachain is responsible for notarizing and finalizing the processed shard block headers, facilitating communication between shards, storing and maintaining a registry of validators, triggering new epochs, processing fisherman challenges, rewarding and slashing.
The Elrond network comprises computers, servers, and even smartphones that act as nodes for the network. These nodes work as validators and observers, providing support to the network, earning rewards in return. Another role that nodes provide on the network is, are what Elrond calls, fisherman. Fisherman on the Elrond network verifies the validity of blocks after the blocks have been proposed. Elrond says the role of fisherman can be done by validators that are not part of the current consensus or by observers.
Related: Proof of Work – PoW NFT
Elrond’s Secure Proof of Stake
The Elrond network uses a Proof of Stake (POS) consensus mechanism, which Elrond calls Secure Proof of Stake (SPOS). Using Secure Proof of Stake, Elrond avoids the environmentally unfriendly processing required by Proof of Work (POW) consensus mechanisms.
What is the eGold token?
eGold (EGLD) is the native token of the Elrond network. Users & developers use EGLD to pay to use the network. Elrond network validators take EGLD as payment for the services they provide.
Related: Yield Farming vs Staking
Elrond uses EGLD as a governance token for staking, transactions, smart contracts, and validator rewards.
Where is EGLD listed?
Several exchanges list EGLD, including Binance, Binance.us, Bitfinex, OKEx, Crypto.com, HitBTC, and more.
Which wallets support EGLD?
Wallets supporting EGLD include Ledger, Trezor, Math, and Trust wallets and the native Elrond Wallet.