Elrond’s smart contract network has launched with a bang, delivering a high throughput blockchain, a first app to communicate with it, and a new token model all on day one. The real headline-grabber from these initiatives is the decision to slash the emission rate of ERD by a thousand-fold, from 20 billion to 20 million, resulting in a deflationary model that will give Elrond’s native asset money-like qualities.
In year one, the issuance rate of ERD will diminish by almost 11% and after year 10 there will be no further ERD issued. This will allow the token to serve as a low-cost unit of account and staking asset initially, before gradually lowering its stock to flow, which will incentivize users to hold ERD in their wallets and use it like money.
Explaining the rationale behind the reduced supply schedule, Elrond CEO and founder CEO Beniamin Mincu said: “A large population of the world is unbanked, without access to the existing financial infrastructure, and so their opportunities to participate in wealth creation are extremely limited...the limited resources available to most people mean that they’re always being split and spread thinner. Elrond aims to accelerate the move to a post-scarcity world, solving these big-picture financial issues for a better tomorrow.”
In other words, the launch of Elrond gives people a chance to get in on the ground floor, something few were able to do when Bitcoin launched, and to benefit from the effects of seeing the network grow and demand for ERD rise.
To kickstart the new Elrond network, Maiar, a mobile application, will be operational from day one for early signups, and it’s packing some nifty features. The app can be used for staking, spending, and lending ERD, but it also boasts a fiat onramp, with more than 150 currencies connected. This means that users can onboard to the Elrond ecosystem directly, which is a coup for a new smart contract network, and something that wasn’t available with the launch of Ethereum, EOS, or Tezos.
It’s customary for new crypto-connected apps, particularly those launched on new networks, to be a little rough around the edges with v1, but Maiar looks production-ready from the get-go, combining a clean interface and intuitive UX with simple functionality that should make it a hit with first-time Elrond users.
The app isn’t just a clone of other popular defi applications, either: Maiar’s developers have crammed in some genuinely innovative features, like the ability to delegate friends of family to serve as “guardians,” using multisig to enable recovery of funds in the event of losing access. In addition, users can easily send funds to contacts and fellow Maiar users in just a couple of clicks.
While Elrond is the highest profile blockchain launching this summer, other networks are undergoing major upgrades. Notably, Cardano’s Shelley hard fork has occurred, introducing staking and helping to decentralize the network. The smart contract chain will go up against Elrond in the quest to lure developers and users to its dApp ecosystem, as well as Ethereum, whose upgrade is drawing closer. While no date for the launch of ETH 2.0 has been confirmed, the testnet is reported to be progressing well.
Ethereum co-founder Vitalik Buterin recently appeared on the Unchained podcast with host Laura Shin, where he expressed the belief that the transition to proof of stake will not lower the network’s security, even if the price of ETH falls, prompting stakers to sell. The new and improved Ethereum network will use sharding like Elrond, but while the former will have throughput per second numbering in the low double digits, Elrond’s Adaptive State Sharding enables up to 260,000 TPS according to their recent testnet results.