What is Shardeum (SHM)?

Deep Dive

1. Purpose & Value Proposition

Shardeum aims to resolve the blockchain trilemma—balancing scalability, decentralization, and security. Traditional blockchains like Ethereum struggle with high fees during congestion. Shardeum’s dynamic state sharding splits the network into smaller partitions ("shards") that process transactions in parallel. This allows the network to automatically adjust shard numbers based on demand, ensuring low fees (claimed to stay "forever low") and high throughput without centralizing control.

2. Technology & Architecture

• Dynamic State Sharding: Validators are assigned to shards that adjust in real time, enabling horizontal scaling.
• Atomic Composability: Transactions across shards are processed atomically, avoiding fragmentation issues common in sharded chains like Polkadot.
• EVM Compatibility: Developers can deploy Ethereum-style smart contracts without code changes, leveraging tools like MetaMask.

3. Tokenomics & Governance

• SHM Supply: Total supply is 249 million, with ~19.4 million circulating (as of October 2025).
• Staking: Validators stake 2,400 SHM to participate, earning 10 SHM/hour for securing the network.
• Governance: SHM holders vote on protocol upgrades, fee structures, and treasury allocations.
• Fee Burning: Transaction fees are burned, reducing supply over time to counter inflation (Shardeum docs).

Conclusion

Shardeum positions itself as a scalable, user-friendly Layer 1 for high-demand applications like DeFi and gaming, combining Ethereum’s developer ecosystem with novel sharding. Its focus on low barriers for validators (minimal hardware/stake requirements) and deflationary tokenomics could appeal to both builders and long-term holders.

What’s next? Can Shardeum’s auto-scaling model maintain decentralization as adoption grows, or will validator incentives need to evolve?