How GLMR Works: Understanding the Moonbeam Network’s Crypto Asset

GLMR is the native utility token of Moonbeam, a smart contract platform that functions as a parachain on the Polkadot network. Moonbeam is designed to enable seamless integration and interoperability between Ethereum-based decentralized applications (dApps) and the Polkadot ecosystem. GLMR plays a central role in facilitating this cross-chain functionality.

Moonbeam as a Polkadot Parachain

Moonbeam operates as a parachain on Polkadot, utilizing Polkadot’s shared security and cross-chain messaging capabilities. This allows Moonbeam to run its blockchain while maintaining connectivity to the Polkadot network, benefiting from its scalability and consensus system. Since the Polkadot framework allows heterogeneous blockchains to interoperate through these parachains, Moonbeam enjoys the advantages of being part of Polkadot while also maintaining its own distinct features.

Ethereum Compatibility

One key aspect of Moonbeam is its compatibility with Ethereum. It mirrors Ethereum’s Web3 RPC, built-in DApp utilities, and existing toolsets such as Metamask, Truffle, and Remix. Specifically, Moonbeam's EVM (Ethereum Virtual Machine) implementation empowers developers to deploy existing Ethereum-based smart contracts directly on Moonbeam without any need for reconfiguration or adaptation. This makes it straightforward for projects to port their DeFi or NFT platforms to Moonbeam while retaining accessibility across both Polkadot and Ethereum ecosystems.

GLMR Token Utility

GLMR is integral to the broader Moonbeam ecosystem. It is used for:

• Transaction Fees: GLMR is required as the gas fee for executing smart contracts and other transactions within the Moonbeam network, following a model similar to Ethereum’s gas fee system.
• Staking and Governance: Token holders can use GLMR to engage in network staking. By staking GLMR, participants help secure the parachain and validate transactions. Additionally, GLMR token holders can participate in on-chain governance voting, giving them influence over future protocol updates and key decisions regarding the network's development.
• Smart Contract Execution: Developers deploying dApps or smart contracts within Moonbeam must have GLMR to establish and run their applications.

Cross-Chain Interoperability

Moonbeam introduces cross-chain interoperability through Polkadot’s Cross-Consensus Message (XCMP) format. This permits token transfers and data sharing between different parachains on Polkadot, such as Acala, and also external blockchains, enabling functionality beyond a single network. This positions Moonbeam to act as a cross-chain hub allowing smart contracts to operate across blockchain ecosystems.

Security and Consensus

Moonbeam employs Polkadot’s Nominated Proof-of-Stake (NPoS) consensus mechanism for securing the network. This system involves validators and token nominators, where validators confirm transaction validity, and nominators stake GLMR tokens to select reliable validators. This NPoS system is not unique to Moonbeam, but leverages Polkadot’s shared security model, benefiting from network-wide protection.