Elrond (EGLD) Overview: Sharding Internet-Scale Blockchain

UTC by Oluwapelumi Adejumo · 7 min read
Elrond (EGLD) Overview: Sharding Internet-Scale Blockchain
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The following guide provides details on the architecture and features of Elrond – a blockchain that aims to provide efficiency, security, interoperability, and scalability beyond what is already obtainable.

The Elrond (EGLD) project has been attracting attention for a while. Like many other similar projects, Elrond focuses on scalability. Between mid-March and the launch of Elrond’s mainnet in July 2020, its ERD cryptocurrency saw a more than 5000 percent increase in value. However, the ERD cryptocurrency underwent a change in September 2020 and became the new EGLD.

ERD is the native cryptocurrency of the Elrond Blockchain that experienced a redenomination of 1,000 ERD to an EGLD in tandem with the changed economic model. It led to a drop in the total supply of the cryptocurrency from about 20 billion for ERD to about 20 million for EGLD.

Origins of Elrond

The Elrond (EGLD) was co-founded in 2017 as a solution to the problem of blockchain scalability. Lucia Todea, Benjamin Mincu, and Lucian Mincu were behind the project. These individuals saw it necessary to collaborate to introduce Elrond as the viable solution.

The Mincu brothers have previously worked on a digital asset investment fund called MetaChain Capital. They also co-founded ICO Market Data, an aggregator of information around ICOs.

The objective of the Elrond blockchain is to offer an increased transaction speed via sharding. Information regarding its smart contracts shows that it has the capacity to execute about 15,000 transactions per second, a transaction of 0.001 dollars, and a 6-second latency.

Elrond Architecture

The Elrond blockchain’s high throughput aims to provide efficiency, security, interoperability, and scalability beyond what is already obtainable. Adaptive State Sharding and the Secure Proof of Stake consensus mechanism are the two most essential features that makes Elrond distinct. There are also several key components at the core of the Elrond architecture.

  • Nodes and Users

These two are essential to the running of the network. The job of the users is to deploy transactions on the network, in the form of a transfer of value or as the execution of a smart contract. Nodes on the other hand are devices on the network that process these transactions in either a passive or active manner.

  • Validators

The validators are special nodes that provide block generation and consensus building in exchange for rewards. These special nodes are necessary for staking tokens in order to become eligible. Other stakeholders nominate them. Fishermen and observers are other examples of special types of nodes.

  • Shards

Shards are smaller partitions of the Elrond network whose duty is scaling. The job of each shard is to handle portions of the state which includes accounts, smart contracts, and blockchain. Each shard is responsible for the processing of transactions. That means each individual shard is able to process only a fraction of the transactions simultaneously with other shards.

  • Elrond VM

The Elrond VM (Elrond Virtual Machine) is useful in the execution of smart contracts. Elrond VM is based on a non-standard portable binary-code format that aligns with CPU architecture called WebAssembly (WASM).

  • Metachain

A blockchain that runs in a special shard is Metachain. Its major roles include transaction processing, finalizing and notarizing the processed shard block headers, enabling communication between shards, maintenance, and storage of validators’ registry, as well as stimulating new epochs, fisherman challenges processing, rewarding and slashing.

  • EGLD Token

The Elrond (EGLD) token’s job is to power the blockchain, serving as a point of entry for the network, as well as the provision of a means of payment for transactions. Also, the EGLD Token assists in dApp deployment, storage, smart contract execution, and rewarding validators.

Adaptive State Sharding

This technology has long been a database optimization technique that has just been introduced to blockchain applications. Elrond blockchain employs adaptive state sharding technology to achieve certain goals.

Firstly, with the adaptive state sharding technology, Elrond maintains scalability without having any negative impact on the network’s availability.

Secondly, this technology makes determining the exact destination of transactions easy to calculate. Dispatching and traceability are also simplified with the aid of this technology.

Further, thanks to the adaptability of the network, there is a balance between the shards at all times.

Notably, handling demand changes on the Elrond blockchain does not have an impact on the network’s security.

Secure Proof of Stake

The SPoS mechanism was developed with the aim of improving the existing Proof of Stake solutions. The SPoS helps in reducing the latency of the Elrond network and gives any node in the shard the permission to determine which members will be part of the consensus group at the beginning of each round.

Aggregated signature from the last block helps in providing randomization. This helps to limit the time of electing a consensus group. A weighting factor was also introduced to promote meritocracy among nodes while simultaneously considering stakes. The Bellare and Neven multi-signature schemes introduced by Elrond are vital in the reduction of the number of rounds of communication needed in the signing of algorithms. SPoS as an advanced version of PoS ensures an even distribution of shards.

Smart Contracts on Elrond

Smart contracts on Elrond are built using the Elrond Virtual Machine (Elrond VM), or Arwen WASM. The Elrond VM supports any programming language that is able to compile Web Assembly contracts. These include Rust, C#, C/C++, Go, Typescript, etc. This functionality permits developers to program in languages that are familiar. Elrond’s sophisticated Rust smart contract framework is compatible with Rust. Hence, it is the advisable language for using on Elrond.

Inclusively, the Elrond VM is compliant with the Ethereum VM. That means Ethereum smart contract can function on the Arwen WASM VM without any hitch. The Arwen WASM VM is also able to achieve interoperability between external blockchain systems. This helps in the exchange of value and other data between multiple blockchain protocols.

EGLD Token

The Elrond (EGLD) coin serves to power the Elrond blockchain network. The token became the second one launched on the Binance Launchpad. The Elrond network raised about 3.25 million dollars at the end of the lottery format initial equity offerings in July 2019. That sale offered about 5 billion ERD tokens of its total 20 billion tokens in circulation.

While the network ran on a testnet, the ERD token was a BEP-2 token. After the launch of the mainnet, Elrond has disclosed that there has been a dramatic change to the token’s economic level. The tokens went for about 0.00065 dollars each at the IEO, and the holders for the winning lottery tickets got about 461,538.61 ERD (about 300 dollars).

Elrond Use Cases

Elrond blockchain network supports non-fungible tokens (NFTs) and also features smart accounts. These smart accounts work like any other account on a blockchain network. The difference is that they have support for key-value data storage at the account level. They allow users to store emails, Bitcoin addresses, health data, proof of citizenship, etc. Smart accounts also do not require the Elrond VM to store and prove ownership of digital assets.

Elrond is also looking to deploy Elrond Standard Digital Tokens (ESDTs), which are tokenized stablecoins, synthetic assets, and fiat currencies that operate on the network without the input of smart contract functionality. Elrond network’s scalability and speed also prime the network for the Internet of Things (IoT).


Business solutions are in search of platforms that have the capacity to meet their most pressing needs as they also continue to explore the possibilities of blockchain technology. The entry of Elrond into the industry provides an efficient, scalable, developer-friendly, and inexpensive blockchain alternative that is able to satisfy the needs of large-scale businesses. The network is also seeking to provide solutions for data exchange, financial services, IoT, etc.



What is Elrond?

Elrond is a public blockchain built to provide high-level scalability, high throughput, and interoperability.

What issues does Elrond address?

Elrond addresses issues bothering on decentralization, interoperability, scalability, and security for businesses and distributed apps.

Who founded Elrond?

Elrond was founded by three individuals: Benjamin and Lucian Mincu, and Lucia Todea.

How does Elrond function?

Elrond functions based on two technologies: Secure Proof of Stake (SPoS), and an Adaptive State Sharding technology. 

What are the key elements of Elrond Architecture?

The key elements of Elrond architecture include Nodes and users, validator, shards, metachains, and eGLD tokens.

What is adaptive state sharding?

Adaptive state sharding is a unique way to employ sharding technology and a technique used to optimize a database.

What is Elrond token?

The EGLD coin serves to power the Elrond blockchain network. It also serves as a means of payment on the Elrond network. 

How to use Elrond?

Elrond can be used as a storage for large amounts of information like Bitcoin addresses, emails, health data, proof of citizenship, etc. 

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