MultiversX (eGLD)

MultiversX

Total supply	Binance Research: 20,000,000 ERD
Website	https://elrond.com/

"Layer 1 blockchain with a focus on scalability to advance Web3 technology in the form of metaverse-related products."

Basics

• Started in: 2017
• Based in: Rumania
• Mainnet launch: 30-7-2020
• Interoperable blockchain network that uses sharding to scale.
• From Binance Research (20-6-2019):

"Elrond is a high-throughput public blockchain aimed at providing security, efficiency, scalability, and interoperability via Adaptive State Sharding and a Secure Proof of Stake consensus mechanism. Elrond is currently in the testnet phase." 

History

• Made a second name switch (4-11-2022) from Elrond to MultiversX.
• First was called Elrond (ERD) but changed it with its mainnet launch. From CoinDesk (31-7-2020):

"As part of the mainnet transition, Elrond said total token supply had been drastically reduced from 20 billion to just 20 million. Rather than burning tokens, Elrond is using an exchange swap where 1,000 testnet ERD tokens translate into just one token on mainnet – called Elrond Gold (eGLD)."

Audits & Exploits

• Bug bounty program can be found here (6-12-2021), amounts as bounty are not mentioned.
• From their docs (6-12-2021):

"Validated through multiple audits from Trial of Bits & others"

Bugs/Exploits

• A full breakdown of the exploit can be read here (9-6-2022), with the final conclusion:

"The hacker swapped the EGLD for USDC on Maiar and tried to bridge them to Ethereum. To stop him, the Elrond team paused the necessary smart contracts and investigated."

• The founder tweeted about the aftermath (8-6-2022):

"Nearly all of the exploited funds have already been recovered in this address: erd1pml9k2tsqsnvtmmalglt2su0sn3cguvr8e8jq0gy69zw2ldcej2qapml9a Any remaining missing funds caused by the known bug, will be covered in full by the Elrond Foundation. Third, the API send function will once again be activated in 45 min, enabling sending tokens across the Elrond web wallet and Maiar app."

• From Blockworks (5-6-2022):

"Founder and CEO of Elrond, Beniamin Mincu, tweeted Sunday his team was investigating “suspicious activity” on Maiar and would provide an update “soon.” Blockworks has confirmed that Maiar has gone offline by way of a “scheduled maintenance” with an accompanying message on its site claiming that “operations will resume shortly.” The exchange has remained offline for more than seven hours. Smart contracts built for Maiar and deployed on Elrond were touted at the time of the launch as having undergone “rigorous auditing and formal verification.”"

Governance

DAO

• From their blog (27-9-2023):

"The protocol governance module has two main components: Agora, or the governance forum, and the voting portal.

Every wallet account with a minimum of 1 EGLD staked is now able to login on the Agora, participate in discussions around protocol development, ecosystem growth and essentially all things MultiversX, and create drafts with improvement proposals that can later be submitted for on-chain governance vote - recommendable only if they gain sufficient interest from the community.

The second main component is the voting portal, and it’s the place where the community expresses their direct intention of approval or disapproval on proposals that reached the final stage, by voting based on the staked amount of EGLD on which the governance power is calculated upon. *To be opened in the next few weeks.

1. Mandatory deposit of 1000 EGLD for any voting proposal.
2. Potential penalty on deposit: if a submitted proposal is rejected with veto, the proposer will lose a part of the deposit
3. Voting period is 10 epochs: it takes approximately 10 days from the time a proposal is published and put to a vote to when it is concluded"

• Is on their roadmap for Q2 of 2020. As of 6-2022, no on-chain governance has been implemented or published about. According to the roadmap it is now scheduled for Q3 of 2022.
• From Binance Research (20-6-2019):

"The ERD token will also be used for voting and on-chain governance at a later stage, once on-chain governance is enabled."

Treasury

• From Binance Research (20-6-2019):

"Each time a transaction happens in Elrond, a percentage of transaction fees will go to validators, another percentage will be burned, while the small remaining part will either be: a) donated to the Elrond Community Fund or b) also burned. The percentages will be released publicly in upcoming releases from the team."

Token

Private sale

• April 2019 - May 2019, raised $1.9M.

Launchpad Sale

• Conducted in June 2019 for a total raise of 3,250,000 USD on the Binance Launchpad.

Token allocation

• From Binance Research (20-6-2019):

1. "Launchpad sale tokens comprise 25% of total supply. [Messari claims 17.3%, all other percentages the same]
2. Private sale tokens comprise 19% of total supply.
3. Team tokens comprise 19% of total supply.
4. Reserve tokens comprise 17% of total supply.
5. Advisors received 2.5% of total supply.
6. Ecosystem Rewards tokens comprise 7% of total supply.
7. Marketing tokens comprise 8.5% of total supply.
8. Community tokens comprise 2% of total supply."

Utility

• From Binance Research (20-6-2019):

1. "The ERD token is used to stake and participate in the Secure Proof of Stake consensus of the network.
2. In addition, the ERD token is used to pay for transactions, storage fees, and as gas. The token also serves as rewards to the SPoS validators.
3. The ERD token will also be used for voting and on-chain governance at a later stage, once on-chain governance is enabled.
4. In Elrond, rewards are paid through an emission of ERD defined in the protocol. The majority of all newly issued ERD will go to validators, while a very small part will go to a reserve pool. The reserve pool will be used to fund development and ecosystem expansion, increasing the security and value of the network in the long term.
5. Each time a transaction happens in Elrond, a percentage of transaction fees will go to validators, another percentage will be burned, while the small remaining part will either be: a) donated to the Elrond Community Fund or b) also burned. The percentages will be released publicly in upcoming releases from the team."

Token Details

• From Cointelegraph (9-9-2020):

“One of the most attractive features of Elrond is that smart contract authors get 30% of the gas utilized by their contract as royalties, without the caller having to pay more. Elrond smart contracts are upgradeable, which will definitely make life easier for any project’s lifecycle.”

Inflation

• From a commissioned report by Messari (4-11-2024):

"The remaining tokens enter through inflation that lasts 10 years following the initial bootstrapping phase. The max theoretical supply is 31.4 million EGLD, and the network offsets any remaining tokens entering through inflation with the total transaction fees collected. For example, if the scheduled inflation for a given year is 100,000 EGLD, and the transaction fees collected during that year amount to 75,000 EGLD, only 25,000 new EGLD tokens will be created and added to the circulating supply. The token offset differs from a burn mechanism since tokens removed from scheduled inflation were never created; they were just scheduled to be created. This mechanism increases token scarcity as adoption grows, strengthening incentives for validators and stakers.

Of all tokens that enter due to inflation, 90% go to validators and delegators, and 10% go to the treasury."

Coin Distribution

• Half of all tokens are within a smart contract, presumably the staking contract. The second biggest address holds about 10% of the supply (6-12-2021).

Tech

• Whitepaper can be found here (19-6-2019).
• Code can be viewed here (6-5-2020).
• Built on: Elrond has tapped (13-8-2020) Bluzelle as its decentralized database layer provider for dApps running on its mainnet.
• Secure Proof-of-Stake (SPoS)
• Programming language used: 'multiple languages'. From their website (6-12-2021):

"The Elrond Virtual Machine is a dedicated smart contract execution engine built on WASM. It expands the family of languages available to smart contract developers to include Rust, C/C++, C#, Typescript. This means you can write smart contracts in whichever language you’re familiar with, compile it of WASM and easily debug its WAT human readable format."

• Capacity (TPS): 10K (20-6-2019), up to 250,000 (31-07-2020), according to the website (6-12-2021) they now claim 15,000 TPS (scales > 100kTPS), 6s latency, also bumping up the below mentioned latency. As of 4-11-2024 they claim 10k TPS per shard.
• Latency: 5-seconds (20-6-2019). NEAR says it is 6-12 seconds (17-10-2022).

How It Works

• From a commissioned report by Messari (4-11-2024):

"MultiversX takes sharding a step further with adaptive state sharding, which combines state sharding, transaction sharding, and network sharding into a single, more efficient solution:

1. State Sharding involves distributing the blockchain’s state (account balances, smart contract states, etc.) across multiple shards, reducing the storage and computational load on individual nodes.
2. Transaction Sharding ensures that transactions are assigned to different shards based on predefined rules, enabling parallel processing and horizontal capacity scaling.
3. Network Sharding splits the network's nodes into distinct groups, each responsible for a specific shard. This ensures efficient communication and coordination between nodes.

MultiversX shuffles the nodes between shards at the end of each epoch to reduce the risk of collusion or targeted attacks on specific nodes.

Key features of SPoS include:

1. Improved Validator Selection Process: Similar to conventional PoS, SPoS randomly selects a subset of validators for each shard at the beginning of each round. In addition to the stake factor generally used in PoS architectures as a sole decision input, MultiversX includes an additional weight factor called rating. The node’s probability of being selected in the consensus group considers both stake and rating, adding another layer of security by promoting meritocracy.
2. Low Latency Block Finality: SPoS achieves fast block times with minimal latency — currently around six seconds per block. For comparison, the average block time for Ethereum PoS is around 12 seconds. MultiversX hopes to achieve sub-second finality through several design upgrades on its roadmap, with testing measuring 600ms in 99.9% of instances.
3. Stake-Based Incentives: Similar to PoS, validators are required to stake tokens to participate in consensus. Rewards are provided for honest behavior, and penalties (slashing) are issued for malicious activity. This economic incentive aligns validators' interests with the security of the network."

• From the NEAR twitter (17-10-2022):

"Elrond sharding mechanism is called Adaptive State Sharding, which insists of network sharding, transaction sharding & state sharding. The mechanism is already live and the network is currently running with 4 shards: 3 execution shards and 1 coordination shard “metachain”. “Metachain is the blockchain that runs in a special shard, where the main responsibilities are not processing transactions but notarizing and finalizing the processed shard block headers”."

• Combines, stake, reputation & random selection.
• From Binance Research (20-6-2019):

1. "State sharding (transaction, data & network sharding); adaptivity through shard merges and shard splits
2. Consensus in two communication rounds with modified Boneh–Lynn–Shacham ("BLS") multi-signatures
3. High resiliency to malicious attacks due to intra and cross shard node reshuffling
4. Secure randomness beacon with BLS signing
5. Smart contracts on a state sharded architecture with balanced load on shards
6. Fast finality for cross shard transactions (seconds)"

The blockchain has low system requirements and can run on anything from an ordinary computer to T2 medium AWS machines. The blockchain features epochs of ~24 hours and rounds of ~5 seconds.

All the validators in Elrond's network will be split among multiple shards, where they will only have to synchronize the state for the current shards and process transactions only for their current shard. In order to prevent collusion amongst validators, up to ⅓ of the validators in a shard will be reshuffled to other shards at the end of every epoch. Liveness is not affected by this because the fast state synchronization for the newly reshuffled validators needs to synchronize only the state for the current epoch (~24 hours timeframe), while the remaining ⅔ of the unshuffled validators in the shard can still process transactions.

Each shard will consist of 400-600 validators and have a separate chain, accounts and application state. The consensus group (currently set to be n=63) changes every round based on a randomness seed stored in the previous block's header. These validators in the consensus group need to agree on the proposed block in every round of every epoch.

Based on the randomness source in the previous block, n validators are chosen using a deterministic function. Every other validator in the shard can compute the n validators and verify the correctness of this nomination. The first selected validator will be the block proposer for the current round.

The block proposer signs the previous randomness source with a BLS single signature to generate the next randomness source, creates a block with transactions, adds the new randomness source in the block header and broadcasts this block to consensus group members.

Each member validates the block, also validating that the new randomness source is a signature verifiable with the leader's public key on the old randomness source. If both are valid, it creates a BLS signature on the proposed block and sends this back to the leader.

The block proposer selects from among all received signatures, creating a subset of at least ⅔*n + 1 signatures, and creates a bitmap for his selection, where B[i]=1 if the ith member of consensus group was selected and B[i]=0 otherwise. The proposer then aggregates the signatures and attaches the bitmap and signature to the block. It must also sign the end result to "seal" the configuration for (B[ ], aggSig) before propagating the resulted block through gossip inside the shard.

The strategy for processing one cross-shard transaction is to use an asynchronous model. Validation and processing is done first in the sender's shard, notarized in the metachain and then finalized in the receiver's shard.

• Step 1: The cross-shard transactions are first processed and added to a block in the sender's shard. The transaction value has thus been deducted from the sender's account.
• Step 2: The block header is sent to the metachain where it is added to a metablock.
• Step 3: The metablock arrives in the destination shard and then needs to be processed there. The destination shard requests the transaction from the sender's shard (if missing).
• Step 4: The transaction is then added in a block in the destination shard and the block header is sent to the metachain. As a result, the transaction value has been added to the recipient account.
• Step 5: The metachain notarizes the block that includes the processed transaction in the destination shard and the transaction is then finalized.

This iteration consists of static state sharding, secure proof of stake consensus, Schnorr signature for transactions, BLS signatures for random seed generation, and modified BLS multisig for blocksigning.

Metrics that are being monitored to check improvement of the network include: latency, bandwidth limitations, running each validator node on a separate machine with very limited compute power (average dual-core CPU with 4GB of memory), and different geographic locations.

Key stats for the current testnet are as follows:

• Sharding setup: 5 Shards + Metachain
• Nodes: 500 x AWS T2.medium (validator nodes) and AWS 12 x T2.large (observer nodes)
• Nodes per shard: 83
• Consensus: BLS round every 6 seconds on each shard
• Consensus size: 63 nodes per shard
• Max-Blocksize: ~800KB
• Peak-TPS: ~12,500"

Upgrades

• From a commissioned report by Messari (4-11-2024):

"In 2024, MultiversX implemented two major network upgrades — Vega and Spica. MultiversX recently passed the Spica protocol upgrade, introducing onchain 2FA, cost-effective relayed transactions, and dynamic NFTs."

Staking

• Has 3200 live nodes, with 55 in queue (6-12-2021) and 56% staked.
• There are now more than 2,000 validators with 50% locked in staking. (11-2020).
• Has 39% staked, according to their website (6-5-2020).

Metachain

• From their website (6-12-2021):

"The Metachain is the blockchain that runs in a special shard, where the main responsibilities are not processing of transactions, but notarizing and finalizing the processed shard block headers, facilitating communication between shards, storing and maintaining a registry of validators, triggering new epochs, processing fisherman challenges, rewarding and slashing."

Interoperability

• From State of Stake (1-2021):

"Cross-Chain Interoperability For Elrond DeFi Via Fire Protocol"

Other Details

• From this blog (9-8-2019):

"Elrond is also looking to provide cross-chain interoperability. The Elrond Network has plans to allow full communication between various external services, beginning with the implementation of the Elrond Virtual Machine (EVM). This virtual machine will support smart contracts written in Solidity, allowing users to create secure transactions between Elrond, Ethereum and other ERC-20 tokens without using an exchange. The Elrond VM will also feature an adapter mechanism that will allow communication with other chains that include adapters to work with Elrond."

Oracle Method

• Got DIA integrated (20-8-2020).
• Band Protocol; from the announcement (22-1-2021): "has completed the integration of the Band Standard Dataset on the public devnet for all DeFi developers to readily-integrate. Both teams outlined an integration roadmap in 2020 which is on track to fulfilling the end goal of integrating a permissionless and end-to-end customizable oracle design for developers on Elrond Network"

Privacy Method

• Is on their roadmap for Q4 of 2020 (6-12-2021).

Their Other Projects

Maiar DEX

• Main DEX on Elrond, built by the same team as Elrond Core. From Blockworks (5-6-2022):

"Launched late last year, Maiar coincided with a liquidity incentive program totaling $1.29 billion in MEX tokens in a bid to curry activity on the new exchange."

Sovereign Chains

• From a commissioned report by Messari (4-11-2024):

"In Q2 2024, MultiversX announced the Sovereign Chains SDK, enabling developers to deploy a custom L2 or app chain natively interoperable with the MultiversX ecosystem. The protocol plans to launch Sovereign Chains in Q4 2024. Sovereign Chains can design their own tokenomics that align with their specific needs. While this offers more potential for customization, independence, and innovation, Sovereign Chains must rely on their own set of validators and stakes for security. Sovereign Chains can participate in MultiversX’s dual staking system to aid in bootstrapping security."

Roadmap

• Released a technical roadmap (4-2024):

"The team has split the roadmap into five key areas and highlighted updates for each:

1. Core Network: Includes distributed transactional computation protocol updates, consensus, and performance. As of Q3, twenty tasks are done, nine are in progress (including updates from the Spica upgrade, such as EGLD multi-transfer and Relayed V3), and ten are upcoming.
2. SpaceVM: Includes changes made to the MultiversX virtual machine, which is responsible for executing smart contracts. As of Q3, six tasks are done, two are in progress (restaking and timestamps as blockchain hooks), and three are upcoming.
3. Developer UX: Includes developer tooling, testing frameworks, and SDKs. As of Q3, two tasks are done, nineteen are in progress (including an explorer for Sovereign Chains, a wallet for Sovereign Chains, and a Tag Builder), and six are upcoming.
4. Sovereign Chains: This includes changes made to the Sovereign Chains SDK, which allows developers to create custom L2s connected to the global MultiversX network. As of Q3, ten tasks are done, eight are in progress (including an economics paper, a testing framework, and cross-chain mint and burn functionality), and three are upcoming.
5. Interoperability: Includes efforts by MultiversX to connect to other blockchains. As of Q3, one task is done, two are in progress (technical support for EVM Compatible Sovereign Chains and Native IBC (Cosmos standard) Development), and six are upcoming."

• From their website (6-12-2021):

1. Q4 2021
   • Maiar App new features
   • Maiar Launchpad
   • DeFi 2.0: Lending, Synthetics
2. Q1 2022
   • Onchain Governance
   • Staking Phase 4

• The old one can be found here (6-5-2020):

• "Q2 2018
  • Elrond technical paper
• Q3 2018
  • Prototype Launch
• Q4 2018
  • Code open source
  • Whitepaper update
• Q1 2019
  • Elrond testnet v0.5

initial results

• Q2 2019
  • Private testnet launch
  • Consensus & cryptography optimizations
  • Elrond explorer & wallet
• Q3 2019
  • Public testnet launch
  • IELE VM integration
  • CryptoBubbles dApp launch
• Q4 2019
  • Elrond New Website & Vision
  • Wasm VM, Dev IDE, Debugger, Rust SDK
  • Battle of Nodes & in-depth security audits
  • Elrond Bootstrapping Phase 1:
    • Pre-staking in 10 waves
    • Staking target 50% of circulating supply
    • Reach PoS economic security threshold
• Q1 2020
  • Economic model proposal
  • App in Samsung dApp store
  • Native Elrond wallet
  • Elrond Bootstrapping Phase 2:
    • Genesis block
    • Select validator staking program
    • Progressive feature activation
• Q2 2020
  • Governance model proposal
  • Functional payment gateway
  • Elrond Bootstrapping Phase 3:
    • Complete set of features
    • Elrond nodes phase-out
    • Global validator staking
• Q3 2020
  • Elrond dApp store
  • Elrond digital identity
  • Elrond name service
• Q4 2020
  • DeFi initiatives
  • Privacy research
  • Blockchain Interoperability"

Usage

• Has done almost 20m tx (6-12-2021) with 1m addresses..

Projects that use or built on it

• Autonio migrated (10-9-2020) to Elrond.
• Bonded Finance which joined together with Orion.
• PlotX is looking into launching a prediction market on Elrond (29-10-2020).
• Orion Protocol wil come to Elrond (12-2020).
• Unmarshal; announced it will add support (24-3-2021).

Competition

• Ethereum, smart contract blockchains. NEAR and TON are other sharded chains.
• Goes into how they are different from Ethereum in this doc (6-5-2020). Has a list of comparisons within their docs (6-12-2021).
• From a commissioned report by Messari (4-11-2024):

"MultiversX’s Sovereign Chains stand out for their horizontal scaling and frictionless experience, although the chain abstracts the complex sharding technology for users. For instance, users can conduct transactions across chains without specifying shards. Moreover, these chains benefit from shared security, allowing them to maintain their own token incentives while leveraging the main chain for quicker bootstrapping."

• From Cointelegraph (9-9-2020):

"In terms of scalability, Ethereum 2.0 will have a hard job keeping up, as the project achieved 260,000 transactions per second on its testnet, thanks to its adaptive state sharding mechanism.

According to Daniel Serb, head of business development at Elrond, the platform’s approach to sharding is comparable with Ethereum 2.0. Both platforms partition the network nodes, transactions and state of the blockchain to achieve high throughput. However, Elrond starts with a fixed number of shards that can process 15,000 transactions per second. However, the protocol allows for the number of shards to increase dynamically, depending on traffic. In contrast, the number of shards on Ethereum is fixed at 64. Developers may find that building on Elrond is more rewarding in the long term in comparison with Ethereum, as Serb told Cointelegraph: 

“One of the most attractive features of Elrond is that smart contract authors get 30% of the gas utilized by their contract as royalties, without the caller having to pay more. Elrond smart contracts are upgradeable, which will definitely make life easier for any project’s lifecycle.”" 

Team, Funding, Partners

Team

• From Binance Research (20-6-2019):

"Elrond is built by a team of entrepreneurs, engineers and researchers with technical experience at Google, Microsoft, Intel, NTT, a PhD in Computer Science ("CS"), and blockchain backgrounds, including being previously part of the NEM core team."

• Full team can be found here (6-5-2020).

• Beniamin Mincu; CEO, former NEM core team. "began his blockchain experience as a part of the NEM core team for 1.5 years. He led the marketing, business and community building efforts to turn NEM into a global blockchain product."
• Lucian Mincu
• Lucian Todea; COO
• Daniel Serb, head of business development
• Has 7 advisors, one of which is Raul Jordan (Prysmatic Labs)

Funding

• From Binance Research (20-6-2019):

"As of the June 2019, Elrond has used approximately 5% of TGE funds according to the breakdown below:

1. R&D - 62%
2. Operational - 17%
3. Marketing/PR - 11.6%
4. Business Development - 5.5%
5. Legal & Audit - 3.9%

Elrond plans to hold sufficient fiat reserves to fund the operational costs for at least 18 months. The rest of any funds held in crypto will be stored in cold wallets with multisig support."

• Covalent; the firm was part of a $2M round for Covalent (26-3-2021).

Partners 

• According to their website (6-5-2020): Matic, Nash, Chainlink and Trusted IoT Alliance.
• From Binance Research (20-6-2019):

"In order to drive adoption and build a robust ecosystem, Elrond has partnered with several companies and blockchain projects, including the following:

1. Netopia: Netopia is an electronic payment processor from Southeast Europe. Elrond and Netopia aim to jointly explore the potential of integrating ERD into the Netopia payment platform.
2. TypingDNA: TypingDNA is a behavioral biometrics company, protecting online users based on how they type on their keyboards. Elrond and TypingDNA aim to explore the integration of TypingDNA biometrics solutions into the Elrond platform and future products in order to improve security.
3. SmartBill: SmartBill is a fintech company providing SaaS-based services to small, and medium-sized businesses for invoicing, accounting and inventory management. Elrond and SmartBill aim to explore the potential integration of the two platforms to provide to their users and clients blockchain-based features for transparency or traceability.
4. NASH (formerly known as NEX):NASH is a decentralised cryptocurrency exchange. Elrond and Nash aim to explore the potential integration of Elrond blockchain platform ERD into the NASH payment platform, allowing their users and clients to trade and acquire ERD tokens across different platforms.
5. Distributed Systems Research Laboratory (DSRL): DSRL is a laboratory focusing on distributed systems related research areas such as machine learning, big data analytics, and IOT. Elrond and DSRL aim to collaborate on Blockchain Research and educational initiatives."

• Partners with Injective Protocol (12-10-2020).
• Is mentioned as a partner on Ontology's website (2-11-2020).
• FinNexus names it as a partner on its website (6-3-2021).
• Is one of the announced partners of Unmarshal during their first months (5-4-2021).

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