Elrond (EGLD) is a blockchain platform designed to enable high throughput, aiming for scalability, high transaction speeds, and minimal costs. Understanding how EGLD works involves delving into the underlying technology, key features, and components of the Elrond Network.
Key Features of Elrond's Architecture
The Elrond Network is built on two main innovations: Adaptive State Sharding and a Secure Proof of Stake (SPoS) consensus mechanism. Both of these components play a crucial role in how the network functions effectively at scale.
Adaptive State Sharding
Sharding is a technique used to divide the blockchain into smaller pieces, or shards, to enable parallel processing of transactions. Elrond takes a unique approach to this with what it calls Adaptive State Sharding, which combines three types of sharding:
1. **State Sharding**: Refers to splitting the state of the blockchain (the overall ledger) into segments so that different nodes hold different portions of the state.
2. **Transaction Sharding**: Different shards handle different transactions, speeding up the process.
3. **Network Sharding**: Different groups of nodes communicate within their particular shard, which allows them to split tasks among different sub-networks.
Combining these three types of sharding helps enhance throughput and scalability, allowing the Elrond network to handle more transactions than a standard blockchain network.
Secure Proof of Stake (SPoS)
In most blockchain networks, consensus is reached through Proof of Work (PoW) or Proof of Stake (PoS). Elrond opts for a tweaked version of PoS called Secure Proof of Stake (SPoS), which improves on traditional PoS by making node selection and communication more efficient.
SPoS involves validators who stake EGLD tokens to propose and validate new blocks. Turns to validate transactions are assigned randomly, and participants are rewarded based on their performance and participation. This removes the need for energy-intensive mining, while also offering a decentralized, tamper-proof system.
Validators and Nodes
Validators are an integral part of how the Elrond Network works. These are nodes that validate transactions in exchange for rewards. Validators must stake a certain amount of EGLD tokens to be eligible. The process for validator selection is designed for randomness and fairness, ensuring network security. Non-validator nodes can still participate by delegating tokens to validators and earning a portion of the rewards.
Elrond Smart Contracts
EGLD also supports smart contracts, enabling the creation of decentralized applications (dApps) and other blockchain-based services. Elrond uses a WebAssembly (WASM)-based virtual machine, which supports multiple coding languages, giving developers more flexibility to design complex dApps that can interact with the EGLD infrastructure.
These various technological innovations come together to make EGLD a robust, scalable solution in the blockchain space through high efficiency and a balance between security, decentralization, and speed.
