What is MultiversX? (EGLD)
The Beginner’s Guide
MultiversX (formerly Elrond) touts itself as a highly scalable, cheaper smart contract platform.
MultiversX's founders built it to compete against major blockchains, such as Ethereum and Zilliqa, aiming to grow an ecosystem of decentralized applications and cryptocurrencies.
To achieve this, MultiversX employs two unique features:
- Adaptive State Sharding – The process of splitting the blockchain's infrastructure to support more transactions and programs
- Secure Proof-of-Stake (SPoS) – The consensus mechanism devised to sync separate network components to a common ledger
n November 2022, the company officially rebranded as MultiversX to reflect its new direction toward metaverse development. As part of its new transformation, MultiversX has launched three new metaverse-based products: xFabric, xPortal, and xWorlds.
The first represents a customizable blockchain that external developers can easily deploy. xFabric is the blockchain infrastructure that underpins MultiversX's new metaverse world.
MultiversX describes xPortal as a multi-purpose app for storing avatars, cryptocurrency, and NFTs. Users can also swap supported crypto-assets, send and receive fiat payments, chat to friends, and manage a crypto-fiat debit card.
xWorlds will be the engine where developers and gamers can create their own immersive digital worlds.
Who Created MultiversX EGLD Coin?
Lucian Todea, Beniamin Mincu, and Lucian Mincu created MultiversX in 2017. The trio founded a company called MultiversX Network.
In June 2019, the project conducted a private investment round raising $1.9 million from several angel investors. That same month, MultiversX held an Initial Exchange Offering (IEO) that raised $3.25 million in exchange for 25% of its total token supply.
MultiversX initially distributed its cryptocurrency as ERD coin. After the project launched its mainnet in July 2020, MultiversX changed its cryptocurrency to EGLD coin. The project then held a transitory event that enabled its investors to swap ERD for MultiversX new EGLD cryptocurrency.
How does MultiversX work?
The MultiversX network offers many features common to other cryptocurrency networks, including smart contracts, transaction settlement, and token issuance.
Developers use programming languages like Rust, C, and C++ to write custom programming logic (smart contracts) and programs (decentralized applications.)
Unique to MultiversX is its design variations of sharding and proof-of-stake, helping process roughly 12,500 transactions per second.
Sharding works by splitting the network into pieces, or shards, for nodes to only process a fraction of the network's transactions. Competing blockchains such as Near Protocol and Polkadot also use this practice.
MultiversX's transaction processing mechanism is called 'Adaptive State Sharding,' where the system splits nodes into subsets to verify transactions. Once the system processes the transactions, the shards broadcast them to the metachain (MultiversX's central blockchain) where they are settled.
Every 24 hours, one-third of the nodes validating transactions in each shard move to a new shard. This mechanism prevents collusion among validators in each shard.
Secure Proof of Stake (SPoS)
Central to MultiversX is the Secure Proof of Stake (SPoS), a proof-of-stake (PoS) consensus mechanism that keeps the distributed network of computers running its blockchain in sync.
Similar to traditional proof-of-stakes, computers running the MultiversX software use sPoS to secure the network, validate transactions, and distribute newly minted EGLD coins.
However, MultiversX's network has shards instead of a single chain. To make blocks, the network selects validating nodes from shards instead of the entire system.
To achieve final settlement, validators must check the work of block producers and sync with other shards within the network. Once the system saves a batch of transactions to the MultiversX blockchain, these contributors receive EGLD tokens.
Why does EGLD have value?
MultiversX's cryptocurrency, EGLD, plays a key role in maintaining its network and helps send assets, reward network contributors, and run smart contracts.
By owning and staking EGLD, users gain the ability to vote on network upgrades. Stakers also receive newly minted EGLD, proportional to the amount staked.
MultiversX gives out 30% of the transaction fees to the authors of smart contracts in what they call "smart contract royalties." MultiversX also extracts 10% of all transaction fees to reward community participants in special events, bounty projects, and network development.
Like many cryptocurrencies, the supply of EGLD is limited, meaning that according to the software's rules, there will only ever be 20 million EGLD.
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Why use EGLD?
Users may find MultiversX appealing based on its attempt to create a scalable platform for decentralized applications. EGLD will also play an integral role in fueling the company's new metaverse products, providing additional utility.
Further, developers may find the platform attractive for the ability to capture a higher share of transaction fees within their deployed applications.
Investors may seek to buy EGLD and add it to their portfolio should they believe the market will favor scalable application platforms.
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