What is MultiversX? EGLD Explained
MultiversX is a blockchain protocol designed to provide businesses and developers with a highly scalable, energy-efficient, and secure network architecture. With its innovative use of sharding and Proof of Stake consensus mechanism, MultiversX is faster, more reliable, and more efficient than traditional blockchain solutions.
This article will explore the MultiversX protocol and explain how it works, highlighting its main benefits and advantages. We will also discuss EGLD, the native token of MultiversX, and its role within the network.
Read on to discover what MultiversX and EGLD have to offer! 👇
What is MultiversX (ELGD)?
MultiversX, previously known as Elrond, is a transactional computation protocol that utilizes a sharded state architecture and secure Proof of Stake consensus mechanism. This innovative blockchain technology offers high scalability and operates without requiring specialized hardware or excessive energy consumption.
The MultiversX protocol enhances performance by using sharding, a parallelizing data and transaction processing method. As the number of computers joining the network increases, the protocol’s performance scales up, which could ultimately lead to it processing over 100,000 transactions per second
MultiversX’s Secure Proof of Stake (SPoS) consensus mechanism ensures the network remains safe and reliable. This mechanism allows participants to earn rewards by staking their tokens and participating in the consensus process.
eGold (EGLD) is the native cryptocurrency of the MultiversX blockchain network. Users can use the token to participate in network governance, earn rewards, and pay transaction fees.
How does MultiversX work?
The main features at the core of MultiversX’s design are:
- Adaptive State Sharding,
- Secure Proof of Stake consensus mechanism
- MultiversX virtual machine.
These features allow MultiversX to process a significantly higher volume of transactions in a shorter time while maintaining the network’s security and decentralization.
Let’s go over them one by one and understand how they function and how they ultimately amount to the highly scalable platform that is MultiversX.
Adaptive State Sharding
In blockchain, sharding refers to dividing a network into multiple smaller networks called “shards”, each containing its unique information.
MultiversX has developed an innovative Adaptive State Sharding technique that sets it apart from other blockchain platforms. To create a balanced, high-performance system, the MultiversX network combines three standardized sharding methods – network, transaction, and state sharding.
Network sharding allows network nodes to be allocated and mapped into specific shards, while transaction sharding determines how transactions are mapped to shards. However, state sharding is the most complex and critical method in MultiversX’s State of Sharding technique.
In a typical blockchain network, transactions often involve accounts on different shards, which require exchanging messages and updating network states across shards. This presents challenges in terms of latency and security, especially when nodes are reassigned and need to synchronize to new shards.
To address this issue, state sharding ensures that nodes only store a portion of the overall network state rather than the entire state. This means that when nodes are moved to a new shard, they only need to download a portion of the new state, making the synchronization process much faster and more efficient.
To coordinate cross-shard operations, the network employs the Metachain. Metachain operates on a specialized shard that communicates directly with all other shards to coordinate and synchronize operations.
To enhance network security, MultiversX shuffles nodes within network shards randomly, making it challenging for attackers to target specific nodes. With its advanced state sharding technique and the metachain system, MultiversX’s State of Sharding offers an efficient, secure, and scalable solution to blockchain technology’s challenges.
Secure Proof of Stake
MultiversX has designed a unique Proof-of-Stake (PoS) consensus algorithm called Secure Proof of Stake (SPoS), which features several innovative elements.
A node is a device such as a smartphone, computer, or server that runs the MultiversX node client software to process and relay data across the network.
Unlike other PoS networks, MultiversX employs three different types of nodes:
- Validators: Validators are the primary nodes responsible for processing transactions on the network in return for eGLD tokens.
- Observers: Observers, on the other hand, are passive nodes that read and relay network information. They do not need to stake eGLD coins to participate in the network or are rewarded for their services.
- Fishermen: Fishermen are specialized nodes that validate or dispute block data after validator nodes have processed it. A Fishermen node is allocated rewards in proportion to its effectiveness in detecting malicious actors.
MultiversX’s transaction throughput is enhanced by its near-instantaneous randomized validator selection, facilitated by blockchain sharding. Blockchain sharding breaks a blockchain into smaller, more manageable data sets for maximum efficiency. Validator nodes are then randomly assigned to these individual shards so that each validator only needs to confirm the data on its shard rather than all the data on the blockchain.
To select nodes within each shard, SPoS employs Boneh–Lynn–Shacham (BLS) multi-signature technology, considered exceptionally fast for a blockchain network. Selecting nodes to finalize validator selection takes only 100 milliseconds (0.1 seconds). This is the kind of speed that is typically reserved for internet-scale networks.
Overall, MultiversX’s SPoS consensus algorithm is designed to enhance transaction throughput while maintaining a high level of security on the network. By utilizing innovative technology such as BLS multi-signature technology and blockchain sharding, MultiversX can offer a highly efficient and scalable PoS network.
MultiversX Virtual Machine (WASM VM)
MultiversX has developed a virtual machine (WASM VM) that enables developers to build smart contracts on the MultiversX platform. The MultiversX VM supports any programming language that can compile Web Assembly smart contracts, including Rust, C/C++, C#, Go, Typescript, etc. This allows developers to program in familiar languages, with Rust being the recommended language due to MultiversX’s advanced Rust smart contract framework.
The Ethereum Virtual Machine (EVM) and the MultiversX VM’s smart contract engine are entirely interoperable, enabling the MultiversX VM to execute Ethereum smart contracts. Additionally, the MultiversX VM facilitates full interoperability between external blockchain systems, enabling the exchange of value and data across multiple blockchain protocols.
Benefits of MultiversX Blockchain
MultiversX offers a comprehensive solution to sharding challenges with the help of its innovative technology. It does so with the use of:
- Adaptive Sharding that enables dynamic network configuration. It ensures a high level of security while also scaling with demand, making MultiversX one of the most scalable blockchains on the market.
- The Secure Proof of Stake mechanism that offers large throughput and fast execution while mitigating potential attack vectors.
MultiversX competitive advantages
- Scalability: The network is one of the most scalable blockchain architectures globally, with sharding enabling potential scalability beyond 100k TPS. The network also boasts over 3200 independent nodes distributed worldwide, ensuring high decentralization and security.
- Decentralization Security: Transaction costs on MultiversX are remarkably low, at just $0.05/tx, making it an inexpensive option for users.
- Environmental Sustainability: Additionally, MultiversX has fully offset carbon emissions for each transaction, making it a carbon-negative blockchain network.
What is EGLD token?
eGold (EGLD) is the native cryptocurrency of the MultiversX Network. The EGLD token plays a crucial role in the network’s functioning, being used to power transactions as well as for staking, governance and paying fees.
EGLD price trend in 2023. Source: CoinMarketCap
As of March 2023, the circulating supply of EGLD was over 25 million, with the majority (63%) locked up in the network’s staking rewards protocol. The remaining eGold will be released gradually over the next ten years until the final supply of 31.4 million EGLD tokens is reached.
MultiversX Ecosystem:
The MultiversX blockchain has a diverse and quickly-developing ecosystem. Some of the MultiversX ecosystem’s essential products include:
xMoney Crypto
xMoney Crypto, a rebranding of what is known as Utrust, is a seamless crypto payment system that allows businesses and individuals to make and accept payments in a flash.
xMoney Fiat
xMoney Fiat, a rebranding of what is known as Twispay, is a payment gateway for businesses, facilitating online crypto payments at competitive rates
xExchange
xExchange is a decentralized exchange (DEX) offering Instantaneous, worldwide, low-cost, fully automatic asset swapping.
xSpotlight
xSpotlight is a platform for exploring, collecting and supporting all kinds of NFT art. It allows you to connect with other creators, collectors and NFT enthusiasts in enjoying, as well as potentially acquiring your favourite NFT.
xLaunchpad
xLaunchpad is a platform that empowers the hardest-working teams and most revolutionary technology. It funds startups with the aim of building new blockchain-related communities and improving the world of tomorrow.
How to buy EGLD?
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Conclusion:
MultiversX is a project that stands for it innovative approach to solving the blockchain trilemma allowing it to achieve great results in terms of scalability & overall utility. We believe that its features have the potential to drive the next wave of blockchain adoption and innovation. With that, we recommend keeping a close eye on in & what it has to offer in the foreseeable future.
We hope that this article helped you better understand the technical aspects of MultiversX & decide if it would make a worthwhile investment for your portfolio. Subscribe to our Twitter & other socials to stay up to date with the latest crypto news & get the lates educational articles. And as always – we wish you good luck and safe investing! ✨
