EGLD, the native token of the MultiversX (formerly known as Elrond) blockchain, offers a diverse range of use cases grounded in its high scalability, low latency, and fast finality. Below, we delve into the primary applications of EGLD within different contexts.
1. Staking and Validator Incentives
EGLD is primarily utilized within the MultiversX ecosystem as a staking token to secure the network. By locking up a specified amount of EGLD, users can participate in network validation and governance. Validators and delegators receive rewards in EGLD for their role in maintaining the integrity and operations of the decentralized network. This process is a core aspect of ensuring decentralization while incentivizing active network participation.
2. Network Fees and Smart Contract Execution
One of the foundational use cases for EGLD is its role in covering transaction fees and smart contract execution costs. Whether it's simple peer-to-peer transfers or more complex decentralized applications (dApps) running on the network, EGLD serves as the medium of payment for computational resources. This applies across all layers of interaction within the blockchain, helping to ensure that MultiversX’s economy is supported by its native asset.
3. Governance Voting
As part of MultiversX's decentralized governance model, EGLD holders can participate in decision-making processes that affect the future of the network. Voting on code upgrades, protocol improvements, and system-wide changes often require participants to hold and stake EGLD to cast a vote. This gives holders influence over the direction of the blockchain, while encouraging engagement by rewarding participation with a direct say in governance.
4. Liquidity in DeFi Protocols
Decentralized Finance (DeFi) is a growing sector within the MultiversX ecosystem. EGLD serves as a critical component in providing liquidity to various DeFi protocols, such as decentralized exchanges (DEXs), lending platforms, and yield farming services. By staking or supplying EGLD in liquidity pools, users are able to earn passive rewards and play a role in enabling trading pairs and lending markets. The use of EGLD in this context also drives the rapid growth of decentralized applications built on top of the MultiversX platform.
5. Payments and Digital Store of Value
Some digital merchants and platforms are beginning to accept EGLD for goods and services in both physical and digital spaces. Additionally, EGLD can serve as a store of value in an ultra-scalable network with efficient transaction capabilities. Although payments with EGLD are still less widespread, its efficiency and low transaction costs offer potential in this direction.
These use cases illustrate a range of scenarios where EGLD is utilized in the MultiversX ecosystem, demonstrating its multifunctional role within this blockchain environment.
