Full review of the Elrond Network project

Despite the 10th anniversary, the blockchain technology is still in the initial stages of its formation. For all these years, the practical application of the technology has never been found, crypto enthusiasts continue to overtake transactions between wallets and exchanges, trying to make money on it. In general, the technology of the blockchain, apart from speculative interest, has not yet generated anything sensible, something that would really be of interest to people and could modernize long-obsolete centralized structures. All this is due to the fact that so far no solution has been found that can solve the trillem of scalability.
V. Buterin wrote the scalability trilemma , according to which any Blockchain can have only 2 of 3 properties: scalability, decentralization, or security . All existing blockchains donate one of the indicators to the other, so the technology is still marking time. Bitcoin and Ethereum sacrificed scalability in favor of decentralization, they perform their function well only as long as the network is not overloaded, and with the growth of the ecosystem there are problems, such as limited transaction speed. As long as transactions are not carried out on a free scale, one can not even dream of the massive use of blockchain technology. Elrond Network project team it perfectly understands and creates its own network, which will be free from the drawbacks of the existing blockchains. 
 What is Elrond Network?   
The Elrond Network is a project that is finally able to solve the trilemma of blockchain scalability of networks and enhance the interaction of technology with real sectors of the economy. The main objective of Elrond Network is to create a new blockchain architecture that goes beyond the current level and is designed for practical scalability using adaptive state separation and secure transaction confirmation (SPoS). In an ecosystem that is committed to inter-network interoperability, their intelligent contract solution offers an EVM-compatible mechanism to ensure interoperability in design. This is a guarantee that Elrond Network will be relevant in an ever-growing blockchain environment.

Elrond network- it is a complete rethinking of the generally available blockchain architecture, specially designed to provide general overall improvement due to scalability, efficiency, and security while maintaining a decentralized configuration. To achieve this goal, the team has implemented a new adaptive state separation mechanism that provides scalability as more and more nodes join the network, paralyzing transaction processing. At the consensus level, Elrond proposes a new mechanism called the “Secure Proof of Stake”, introducing a random selection of the consensus group, a “bet plus” rate as a function of suitability for preventing sibil attacks and almost instant finality based on pBFT. To provide decentralized applications, Elrond is designed to be compatible with EVM and Ewasm,

Product 

To date, Elrond has made significant progress in developing its product. Thanks to the last iteration of their network, completely rewritten in the language of the GO code, the team was able to reach 3750+ TPS in one segment, which is a significant improvement since their prototype. This shows that the team is committed to its roadmap, ensuring continuous progress even before fundraising, and investors know in advance what they are investing in. Testnet is successfully up and running, and Elrond's early blockchain also has a convenient UX that will be available to the public in the next few months.
Competitiveness 

The main competitors of Elrond Network are EOS, Zilliqa, PChain and Quarkchain. All these competitors are trying to solve problems with scalability and offer solutions that provide high bandwidth TPS while maintaining appropriate levels of security. They also take a different beaten path between the chains, which is also solved by many other projects, such as Polkadot and PChain. There are all chances to outrun their competitors by giving the crypto community and the whole world a viable product that will take over the competition and integrate the network into the relevant infrastructure projects of the blockchain. 

Size of potential market 

Elrond Network expects to become a major player in the so-called “big league” of development of blockchains, which is a sector with high bandwidth, segmentation and interworking. The need for high bandwidth and low cost of data storage is constantly high. A project that solves these problems and provides an open and easily interacting chain will gain wide popularity, so this project has every chance to take a leading position.
Innovation and Intellectual Property The

position the team adheres to is an open source product that provides faster adoption levels and supports the principle of decentralization, so they made their prototype code available on their Github page .
 

Using Blockchain  

The Blockchain technology is an integral part of the Elrond network project, it is the main goal of these projects, since it aims to expand the blockchain infrastructure with its new solution and provide fast, scalable and secure cryptocurrency and high bandwidth networks.
Ecosystem Tokens
The Elrond platform will use its own token called Elrond (ERD) . It will act as an inexpensive high-speed cryptocurrency, which can be used to process various transactions. The ERD functions will primarily manage the network, since a secure proof of stake requires that the nodes contain a significant amount of EDR in order to manage the network and the matching mechanism. The Elrond Network will also use a system of master nodes that will encourage EDR holders who put their coins to help confirm transactions and regulate the system.
Security measures
The Elrond Network uses an improved Proof of Stake consensus algorithm, called Secured Proof of Stake , in which consensus is achieved by randomly selecting validators, determining the right to bid and rating with the optimal measurement for the consensus group. They use a random number consisting of several variable parameters to select nodes in a group of segments, thus preventing highly adaptive malicious attacks. After each epoch, 1/3 nodes from each shard are redistributed among other shards to further reduce the likelihood of malicious actions, and each node also has a rating based on the honesty of its actions. Ratings affect the likelihood of selecting a node in an agreed group.
Decentralization 
Elrond Network takes another step in the scale of decentralization of the Proof of Stake mechanism, adding randomness to it, thereby ensuring that nodes are redistributed evenly and non-deterministic among other segments. In addition, the network ensures that the consensus group is rightly chosen based on the node rating and other parameters that also guarantee randomness, and the signature of each block contains at least 2/3 +1 signatures of the validator group, thus ensuring democratic control consensus system.
As described above, the reconfiguration of segments in epochs and the random selection of validators in rounds prevents the creation of unscrupulous groups, reduces the likelihood of DDoS attacks and bribery while maintaining decentralization and high throughput of transactions.
Storage and mining 
The Elrond Network will operate on the basis of an agreed protocol that belongs to the class of interlacing-based protocols and is supported by the new Proof of Stake mechanism.
The storage problem is solved by the Elrond team due to the fact that the network with high bandwidth leads to a distributed register that quickly increases in size and increases the cost of loading (time + storage). Costs are taken into account in the Elrond solution using reduction algorithms that can summarize the full state of the blockchain in a more concise structure. The reduction mechanism is similar to the stable control points in pBFT and compresses the entire state of the register. The network is also starting to improve the Omniledger algorithm by adapting to state separation, faster random selection of the consensus group and increasing security by replacing a set of validators after each round (several seconds), rather than after each day.
The system delay due to the rearrangement of nodes between segments is eliminated by distributing 1/3 of valid validators to other segments, thereby ensuring a level of randomness and security, as well as the absence of temporary fines for network survivability. Elrond uses the Bellare and Neven multi-signature scheme, which excludes one communication round in the signature algorithm, since no proof of ownership is required, but a high level of security is still maintained.

The Elrond team offers a fast, secure and scalable blockchain network that can process 10,000 transactions per second and support a large number of dApp applications. Despite the great competition in this space, and all of them are aimed at creating high-bandwidth networks, by 2020 about 10,000 dApps will be involved and the blockchain industry will only contribute to mass adoption in the global economy and everyday life. What Elrond Network offers can significantly add value to all blockchain technology using new protocols and consensus mechanisms and expanding boundaries. This, combined with the fact that one of the priorities of the Elrond Network is interoperability, allows the project to become a leading force in the development of blockchains.

Documentation

All project documentation is in order. Key aspects are posted on the main project site, which anyone can read at any time. It describes in detail the architecture and levels of the Elrond network, presents their views on the development and adoption of the business, as well as a brief presentation of the team and consultants and a description of the roadmap. 

The technical document is presented in the form of a 16-page document and is devoted exclusively to the technical aspects of the project, I did not really understand anything there, but it was written professionally. The documentation briefly discusses what Elrond Network is upgrading the whole blockchain technology, what the problems of modern networks are and how Elrond plans to solve them.
The white paper is intended for people with experience in technology, but it summarizes many important aspects of networking even for non-technical audiences. In addition, it explains, first of all, the mechanism of consensus and separation, the cryptographic layer, as well as the space of a competitor. The documentation also covers security and bootstrap issues as well as storage issues. The technical document is not exhaustive and does not contain information about the team, the sale of tokens, legal disclaimers or any potential business plan. A simple roadmap is available, however additional information about the team is available on the website.
 
At the moment, the project has already updated technical document, consisting of a 16-page document with an emphasis on technical aspects. The new version of the document is more concise, structured and offers a broader approach to representing the Elrond ecosystem. The key areas that have been improved relate to the “Linked Work” and “Sharding” sections, which provide a comparative look at the Elrond Network with approaches from other networks. They also proposed new paragraphs that supplement the already detailed document, which details the real problems that blockchain networks face, the blockchain performance paradigm, and group iteration of smart contracts and virtual machines.
Readability
The language used in the official document is easy to understand and can be used by most readers. Although some key points are explained in detail, which is not so bad, a non-technical reader can catch up with these points with the help of generalized information, comparison with competitors' projects and well-written conclusions. There are also a number of illustrations that help readers understand the key points, and for the more technically advanced, the technical paper contains a large number of references to more detailed research.

The white paper does not contain any information about the team or any data on the sale of tokens; It focuses exclusively on the technical solutions and project methodology. The website does an excellent job of presenting the team and consultants, but there is also no information on the sale of tokens. The team said their focus was on delivering a prototype and reviewing the details of the sale of tokens later, when they had a work product to attract potential investors. The fact that they want to offer some type of product before raising funds from investors is a big plus.
Technology
The technical paper discusses most of the technological aspects of the Elrond Network, explains the new consensus model, the mechanism for separating the adaptive state, the cryptographic level, problems of boot-up and storage, and also discusses in detail how to improve or develop the network in terms of some aspects that can be found competitor projects. In addition, this document describes how security issues such as the Sybil attack, a fraudulent attack, how malicious behavior is prevented, and confidentiality is achieved are addressed. 

Road map  

The project roadmap emphasizes not only the team’s goals, but also the important achievements of the project that were achieved in each respective period. The team also provided detailed information on actions related to business and network expansion plans, which we would like to learn more about, since these documents give an idea of ​​the team’s overall vision for adopting the network. 
The team proposed a detailed version of the roadmap for the first part of 2019, which discusses the beginning, basics, launch and expansion of the Elrond Network. They divided the development of the network into two parts: the main ones, which represent a step forward in the development of the Elrond project, and functions that add value in combination with the main protocol, creating
In its latest version of the roadmap, the team highlighted the progress made by the Elrond network throughout 2019, delving into the details and creating an ambitious timeframe that addresses the development of a wide range of network functions and use cases. Although we believe that the team has established very ambitious plans for the year, the team is constantly progressing and moving to actual use cases, the functions performed become a natural step to create a global product that can be accepted as an industry standard.
With the degree of detail that the current roadmap represents, the team shows that they are determined to provide a multi-functional product and fulfill all the requirements of a powerful network blockchain. The first two phases are included in the first quarter, which will be dedicated to launching private and public test networks, a round of financing, as well as stress testing and security audits to ensure the smooth development of the network. The third stage will take place in the 2nd and 3rd quarters with the launch of the main network, the exchange of tokens and the integration of Elrond with a payment provider to create a payment gateway. The last stage will begin in Q3-Q4 with the consolidation of the Mainnet network, the development of the Ecosystem foundation and the integration of the network with digital maps. Along with these core tasks, the team will complement a set of functions to supplement the network and help boot the ecosystem, such as developing a private browser that will be integrated with Elrond, the desktop and mobile wallet, privacy mechanism, API + SDK. and many use cases for the platform. A private browser will also act as a more organic way to connect users to their blockchain, since Elrond will implement its own wallet that will use ERD tokens.  

Business model 

Another important step in the maturity of the project is the presence in the development and implementation of the business, as well as sections of the Elrond Ecosystem, which give an idea of ​​the main features of the project and provide a specific action plan for the group regarding the expansion of the Elrond project from startup to small and medium-sized businesses. The team has included a number of very important tasks in the business plan and has already been able to implement some of them, having established an appropriate partnership with the payment provider, thus ensuring the first use of the platform.
Update: With the further growth of the network, the team announced a new partnership with the Laboratory for Distributed Systems Research in the academic environment and hopes to expand the scope of projects to study the most basic problems and areas of applicability of the blockchain technology and also explore the possibility of using the Elrond platform for decentralized management of the demand response program in smart grids .
           

The display does not contain any information about the actual business model, how the project will be used, potential partnerships or any plans for using the network in real conditions. However, the team compares how different systems, centralized and decentralized, work in an environment where data storage and bootstrap caused current blockchain architectures to function unexpectedly with bandwidth at the Visa level, thus aiming to advance the network level, that is, partnerships are possible with operators who need high bandwidth for their applications.
Cost effectiveness
Currently, cost effectiveness cannot be determined, as the team has not yet released any information about the economics of tokens, but they compare themselves with projects whose cost varies from $ 50 billion (Eth) to $ 650 million (Zilliqa) , $ 4 million (Algorand) and work in the same development spectrum of the blockchain as EOS (valuation of 10 billion dollars), Hashgraph (growth of 300 million dollars), Thunder (valuation of 100 million dollars), Cadena (growth 12 million dollars), therefore, it is expected that the evaluation of the project will be at least 50 dollars. million. It's not clear how the Elrond team will determine the actual financial needs for the project and how revenue from using the platform will be generated.
Update: with the first version of the slide group, the team provided detailed information about the economy of tokens, setting a hard limit of $ 15.2 million. USA for 55% of tokens, creating an estimate of $ 27.6 million. USA, which is significantly lower compared to competitors. We believe that their severe restriction will not be satisfied by these bearish sentiments in the market, however, for Elrond to become a sustainable company with a revenue stream, 15.2 million are required.
Update No. 2: Several scenarios provided by the team and defining the latter approach with a significant reduction of $ 5 million in hardcaps for 40% of tokens creating an estimate of $ 12.5 million set the standard for the development of protocols and networks for mass evaluation. from competitors. This suggests that the team will rather re-release and have organic growth based on demand, rather than not delivering and risking the future development of the project, and we like it. 
Legitimacy
Due to the still uncertain status of cryptocurrency and the tight regulatory policies regarding blockchain technology and cryptocurrency throughout the EU, especially with Switzerland, the Elrond Network team decided to register Elrond Ltd. in St. Julians in Malta is a company number C88751.  

Team  

The Elrond team consists of 3 founding members and 8 members, and, moreover, there are currently 3 advisors on the board of directors. The team seeks to recruit more team members and expand their positions in development, marketing and business. There is a good mix of technical, commercial, legal and marketing knowledge, but the team will benefit from additional marketing efforts.
Update: To keep pace with the rapid development of the network, the Elrond team has expanded to 17 members, adding new software developers and researchers, as well as marketing and UI / UX specialists, thus improving the overall skill set. The team is currently starting to focus on the marketing side of the project, as Elrond is approaching the phase of selling tokens and product release.
Stages 
According to the site, work on the project began in the third quarter of 2017, when preliminary technical work was carried out. No other information is provided, except that in 2018 the company was founded in Zug, Switzerland. All participants and consultants have LinkedIn profiles that can be easily verified, but it’s difficult to assess the project’s company structure.
Founders
Beniamin Minku is the founder and CEO of Elrond. He had an early experience with cryptocurrencies, he was an early investor in Bitcoin and a member of the core business group of the NEM project, where he joined them in 2014, leading business, marketing and community work. After leaving the NEM project, he began helping projects such as Zilliqa, Polkadot, Icon, Matrix, to develop their business efforts. He is also the CEO and founder of ICO Market Data, ICO's evaluation platform, and Metachain Capital, which has invested in one of the best projects on the market (ICON, Zilliqa, Wanchain, Polkadot, Matrix, PChain).
Advisory Board
The advisory board consists of 3 advisors who have extensive experience in their respective fields.  
  • Alex Iskold is a serial entrepreneur and investor, with extensive software development experience, he has invested in more than 90 startups and founded a number of companies.
  • Patrick Storönenegger is a Swiss lawyer who is part of the Ethereum Foundation. He has many years of experience in international tax law, corporate law, commercial law and capital market law.
  • Andrei Pitis is vice president of engineering and head of the Bucharest office at Fitbit. Founder and CEO of Vector Watch. Angel Investor with several technical leadership positions. In general, the advisory board has relevant experience and should help Elron to forge partnerships and accelerate business development.
Update: Elrond welcomed 4 new advisers to his team that will help the founding team take the company to a new level. The following advisors have been added to the team:
  • Alex Tabarrok - Alex is co-founder of the University of Marginal Revolution: an online platform for studying economics. He is the author of numerous scientific papers in the field of law and economics, criminology, regulatory policy, voting theory and other areas of political economy. His academic background and impressive skill set are a great addition to the current team.
  • Fabio Chanesin is a co-founder of City of Zion, a global, independent group of open-source developers, designers and translators created to support the core and NEO ecosystem. Fabio is also a co-founder of NEX, a platform for creating complex decentralized cryptographic trading and payment services. He is the one who can really draw attention to the project, and Elrond's successful efforts to establish such a partnership bring the team much more confidence and trust.
  • Ethan Fast is a co-founder of the City of Zion and Neon Exchange and the creator of the most popular NEO wallet - Neon Wallet. He is an entrepreneur and researcher with experience in the field of human-computer interaction, artificial intelligence and the blockchain.
  • Raul Jordan - the main developer of Ethereum. He is the co-leader of Prysmatic Labs, the first implementation of Sharding for the Ethereum protocol. Raul is a partner of zk Capital, a research-oriented blockchain investment fund, and co-founder of Kynplex, the first ever life sciences network in the history that brings together online scientific innovation centers. 
This is a great update from the team, and it demonstrates that they did not stagnate when the hype was going for Elrond, but they did the opposite and used this impact to draw aboard very important people with an abundance of skills. This strategic step will not only help Elrond Network get more information from investors and cryptocurrency communities, but in the long run it will increase the ability of the team to establish partnerships and expand their reach.
Update No. 2 : The team has further intensified its efforts to gather the best minds in space to help develop the project. Their last adviser, Sunny Aggarwal , joined Elrond's advisory board, sharing his experience as a core developer for Tendermint / Cosmos projects and as one of the co-founders of the Blockchain research group in Berkeley.
Update No. 3 : Because the team constantly provides progress to the Elrond Network, they often interact with their consultants who help launch the project, and therefore they have suspended collaboration with Sunny Aggarwal because he is focused on development. from the environment of Tendermit / Cosmos and cannot offer his experience for the Elrond network at present.
The Elrond team has several well-known and talented developers who have many years of experience in a number of areas directly related to software development.  
  • Sebastian Marian is a leading developer with over 15 years of experience in programming and developing applications with languages ​​from C, C ++, Visual C ++ to HTML, Java Script, SQL, ABAP, SAP.
Update: due to the rapidly changing nature of the industry, the team has adapted and shaped its dimensions and roles to better match the development and growth of the project. With the growth of a team of up to 18 people, several positions were changed to a more structured approach to development, thus team members such as Felix Crisan, Radu Chis and Adrian Dobrita occupied leading positions as head of research, head of technology and Head of Technology. They boast an impressive array of skills related to software development and research, even publish scientific articles, several scientific papers and prestigious journals.
Although the team primarily specializes in technology, they have several participants that stand out in business and marketing, such as Lucian Todea , who is a serial entrepreneur with active investments in blockchain space and more than 15 years of experience in technology. He is the founder, CEO and investor-angel in a series of fast-growing technology startups. From the whole Beniamin Mincu teamhas the most extensive experience with blockchains. He has invested and managed a wide range of positions for blockchain projects that are relatively successful. He is also the CEO and founder of Metachain Capital, a successful investment fund with a large number of stellar projects in its portfolio.
Legal Counsel
Patrick Storöngenegger is also on Elrond’s advisory board . It is part of the legal group Ethereum Foundation in Switzerland and advises a number of international companies, including those engaged in trade, reinsurance, transportation and blockchain technology. Patrick will ensure that legal aspects are taken into account and the project remains legally compatible.   

Token sale  

The group’s approach to financing the design process was aligned with their development vision and included several fund-raising scenarios. Each scenario was associated with general market conditions, so the team set a hard limit for the first scenario of $ 15.2 million. USA for 55% of tokens, which, according to their estimates, will be enough to maintain development for 7 years. Given the current market conditions, the team has reduced its tight capitalization to $ 5 million for 40% of tokens, combined with the strategy of using the developer community, which they estimate will support development for 4 years. Through this, the team showed that they are connected to the current market situation and understand the value of providing funds through the ICO, primarily focusing on their community. Besides, 

Conclusion 

I have no doubt that the team creates an outstanding product that is able to modernize the entire blockchain industry and make the technology available to every inhabitant of the planet. The project has a highly qualified team, reliable partners and a finished product, but their competitors are not hamsters either, so the Elrond Network team needs to move very quickly to take its place in this competitive field. In general, the project is quite interesting and may well become the best blockchain in the world. For more detailed acquaintance with the project you can follow the links below.