Elrond’s mainnet has successfully launched, ushering in an era of high-speed dApps and scalable crypto payment technology. The blockchain’s developers have wasted no time in refining components of Elrond’s architecture, starting with an enhanced token model.
Elrond has also announced details of the first app to go live on its mainnet, available on mobile devices. Maiar is an easy-to-use application that facilitates ERD transactions between users, and will offer features such as staking, lending and progressive security. The app launched on July 30 for early sign-ups and will fully open to the public within the next month.
Traditional payment stocks are already feeling the competitive pressure brought by the newcomers like Elrond. Last month Western Union (NYSE:WU) made an offer to buy MoneyGram in order to be able to better compete with the digital payment start-ups. Western Union hopes that joining its network of tens of thousands of agent locations with MoneyGram’s will give the company a better reach and offer consumers more convenience. We aren’t certain that lack of physical presence is Western Union’s main problem.
The biggest news concerning Elrond’s launch is an adjustment to its tokenomics in a bid to make ERD function more like digital cash with store of value characteristics. This will be achieved by switching to a bitcoin-like deflationary model, which will drive greater demand for the token over time. This aligns with recent partnerships and integrations that have elevated ERD from a gas and staking token to a digital payment option, suitable for spending in-store and online.
The TPS Battle (Transactions per second)
Scalability is imperative and the launch follows successful testnet results with more than 1,500 nodes in 29 countries, and 50 shards, running at extremely high speeds with a peak of more than 260,000 transactions per second
Defi Debuts on Elrond
Defi is everywhere right now, and thus it was always going to feature prominently on a high throughput network such as Elrond, which is launching amidst a decentralized finance boom. Maiar, its debut app, promises to be easy to use, bringing the gaps to the unbanked and placing an array of staking and lending capabilities in the hands of users.
The financial app enables users to lend, spend, and stake their ERD, giving the token additional functionality from day one of the network’s launch. Crucially, more than 150 fiat currencies are integrated into Maiar, allowing it to serve as a portal for on-boarding users to the Elrond ecosystem. From there, it’s just a short skip and hop into the broader world of digital assets should newcomers be so inclined. Maiar has been designed to make it easy to send money to contacts and other app users via dedicated usernames, giving it a utility akin to a digital banking service such as Revolut.
High Scalability Meets High Scarcity
The other major news concerning Elrond’s launch is the adjustment to its token supply. The current issuance schedule of 20 billion ERD has been slashed to just 20 million, starting with a 10.8% reduction in year one. Due to the reduced supply curve, there will be no further tokens issued after 10 years. The redesign of Elrond’s token model will make the token function more like hard money, analogous to bitcoin, albeit with a higher total circulating supply.
Originally used to calculate the value of commodities like gold and silver based on circulating supply and annual issuance rate, the stock to flow (S2F) model has permeated the crypto space and its proponents believe that BTC can be modeled in this manner.
By the fifth year of its existence, ERD should have a stock to flow ratio of 275, with CEO Beniamin Mincu explaining: “A large population of the world is unbanked, without access to the existing financial infrastructure, and so their opportunities to participate in wealth creation are extremely limited. What’s more, this skewed distribution means that incentives and risks can remain hidden until they blow up, creating a problem for everyone. We saw evidence of this during the 2008 financial crisis and we’re seeing it again these days.”
According to Mincu, Elrond will fit into “a post-scarcity world,” serving the needs of a global population that demands financial inclusion and deserves incentives to save, lend, and earn.
The Summer of Crypto Love Continues
Aside from the explosion in defi growth, summer 2020 is proving to be a busy time for crypto networks, which are launching like champagne corks right now. In addition to Elrond’s mainnet, Cardano’s Shelley hard fork has just occurred, bringing staking pools, delegation, and rewards to the mainnet, and helping to further decentralize the blockchain founded by Charles Hoskinson.
In addition, distributed data storage network Bluzelle is launching the first phase of its mainnet on August 8, introducing staking rewards for BLZ holders. With the launch of ETH 2.0 also looming, competition between smart contract chains is about to get fierce.
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