Securing MultiversX (EGLD) On ZERO

Overview of MultiversX

MultiversX is a blockchain protocol that provides fast transaction speeds via sharding. It aims to be a technology ecosystem for decentralized finance, fintech, and the Internet of Things. According to the project, its smart contract execution platform can process up to 15,000 transactions per second, with a latency of six seconds and a transaction cost of $0.001.

The community and active participants of MultiversX are rewarded with EGLD tokens, which are Elrond's native token. EGLD functions as a store of value currency to pay for network usage, a medium of exchange between platform users and validators, and a means of deploying smart contracts, protocols, and dApps on the platform. Moreover, EGLD can manage the Elrond network through staking and validation rewards, transaction fees, and governance functions that allow its holders to vote on network decisions.

Who founded MultiversX?

In response to the issue of blockchain scalability, which they considered the most urgent challenge for the industry, brothers Beniamin and Lucian Mincu, along with Lucian Todea, established MultiversX in late 2017.

MultiversX’s Secret Sauce

MultiversX is a novel blockchain architecture that aims to solve some of the most challenging issues in the blockchain space, such as scalability, security, and efficiency. It accomplishes this by implementing Adaptive State Sharding on all levels, including transactions, data, and network, allowing dynamic network configuration to maintain a high level of security while scaling with demand. MultiversX also employs a Secure Proof of Stake consensus mechanism, which mitigates potential attack vectors compared to Proof of Work while enabling large throughput and fast execution.

In addition to these key innovations, MultiversX offers a high degree of resiliency to malicious attacks due to periodic node reshuffling across shards and a secure randomness source with BLS signing, which makes it non-biasable and unpredictable. The MultiversX WASM VM is also a fast virtual machine for executing smart contracts written in any programming language that can compile to WebAssembly.

Overall, MultiversX is designed to provide a high-throughput public blockchain that is scalable and interoperable beyond the current state-of-the-art. The architecture allows for a very low cost per transaction, and the quality of the developer experience and the resulting boost in usability on the end-user side are also notable features. Fast finality for cross-shard transactions is also handled by MultiversX at the protocol level, using a dispatching algorithm and a routing protocol.

MultiversX Use Cases

Smart Accounts is MultiversX's NFT framework that lets users store and manage non-fungible tokens on the blockchain. Like other blockchain networks, Smart Accounts function like a typical account with the added feature of key-value data storage at the account level. This allows to store large amounts of data such as private identity data, health data, proof of citizenship, Know-Your-Customer (KYC) information, and more in the user's Elrond Network account.

Additionally, Smart Accounts can store and prove ownership of digital assets without using the Elrond VM, reducing the load on the smart contracts that govern user funds.

Other MultiversX use cases include:

• E-mobility: Smart Contracts can help address challenges related to e-mobility by allowing the settlement of charging fees via transactions on the Elrond blockchain. Private charging sources in a residential area could be used, for instance.
• Toll & parking payments: Automatic toll payment is another application; a car connects to a toll station via the blockchain and gets billed through a smart contract. Similarly, this can be applied to parking spaces, eliminating problems related to payment options or malfunctioning pay stations.
• Car leasing: The use of smart contracts can also help manage car leasing or private car rentals, ensuring that payment is made before the vehicle gets used.
• Vehicle verification & proof of ownership: Vehicle data can be stored in a tamper-proof manner on the Elrond blockchain, providing transparency in TÜV approvals and ownership verification. The stored data includes ownership, mileage, damage, and repair history, which can be accessed during vehicle resale. The authenticity of spare parts can also be verified through the blockchain, reducing the likelihood of fraud for dealers, insurers, leasing companies, and used car buyers.

MultiversX Tokenomics

The eGold currency is designed for simplicity and global adoption.

The eGold currency is designed as a digital reserve standard and robust store of value. MultiversX has introduced a new economic model that establishes eGold as the central token for all of its internal usage. The aim is to make eGold a resilient store of value, much like gold but with features and capabilities that go beyond. The token parameters have been optimized to achieve this goal.

Built-in scarcity to reinforce value and demand. The initial supply of eGold at Genesis is limited to 20 million tokens, which is equivalent to only 0.0025 eGold per person for a global population of 8 billion. This creates a situation where owning a few thousand eGold tokens now could potentially be as valuable as owning a few thousand Bitcoin in 2010, triggering an arms race for accumulation. MultiversX aims to position eGold as the core network token with a unique value proposition that goes beyond that of gold.

Strong staking incentive for validator adoption paired with a max supply limit. MultiversX provides significant staking rewards to validators who secure its network. Initially, these rewards are derived from newly issued tokens each year, but once the network gains more widespread adoption, transaction fees will replace inflation as the source of staking rewards. Unlike many other blockchain networks, where new tokens are issued indefinitely without a limit, MultiversX has set a cap on the total number that can be issued at 31,415,926 eGold over a 10-year period.

Adoption increases eGold scarcity.

Adoption reduces this theoretical inflation and increases scarcity. An important aspect of MultiversX’s economic model is that every paid transaction fee reduces the theoretical limit, replacing inflation with fees. This mechanism helps make eGold more scarce, ensuring that the maximum supply limit of 31.4 million will never be reached.

Inital supply vs. Max theoretical supply of EGLD.

A sustainable adoption model growing the entire eGold economy and reinforcing deflation. MultiversX has a robust adoption model that stands out in the blockchain industry as it can seamlessly shift to a deflationary model under any adoption scenario. The network’s zero inflation threshold can be reached with less than 10% of its capability, meaning that sufficient adoption can push MultiversX beyond this threshold, creating substantial value for all participants on the network.

Buying & Storing EGLD

Acquiring EGLD is a simple process as it is on various centralized exchanges, including Binance, Coinbase, FTX, and Kucoin. To learn about the procedures, expenses, and potential dangers of purchasing EGLD, refer to NGRAVE's instructions on how exchanges work.

Nonetheless, it is strongly recommended to store your EGLD on an NGRAVE ZERO cold wallet to safeguard it from online hazards while still being easily accessible for trading and transactions.

Reality Check

Hack

The Elrond hack ranks among the top DeFi hacks, with losses amounting to approximately $113 million. The hackers took advantage of a vulnerability in Maiar, a decentralized exchange, to steal nearly 1.65 million EGLD tokens. They used a smart contract and three wallets to obtain the tokens.

In addition, the hackers quickly liquidated around 800,000 EGLD tokens on Maiar for about $54 million. They later sold the remaining tokens on centralized exchanges and exchanged some for ETH.

Rebrand

Elrond rebranded itself to the name of MultiversX to focus on the metaverse. With its announcement, the company introduced three new products - xFabric, xPortal, and xWorlds - to aid metaverse creators and users. These tools include a metaverse portal, digital asset holder, creator utilities, and a deployable blockchain module.

ZERO Supports ESDT Tokens

Apart from EGLD, which was previously supported, the new ZERO Firmware v1.3 supports all ESDT tokens in the MultiversX network. ESDT stands for eStandard Digital Token.

MultiversX network provides native support for the creation of custom tokens, eliminating the need for contracts like ERC20 while serving the same purposes. Moreover, since custom tokens are natively supported within the protocol, transactions involving them do not require the Virtual Machine (VM). This essentially implies that custom tokens are as efficient, fast, and scalable as the native EGLD token. Learn more in MultiversX's Docs.

Some popular ESDT tokens in this blockchain include Utrust (UTK), ZoidPay (ZPAY), ITHEUM, xExchange (MEX), and holoride (RIDE). Access these and more tokens on your ZERO by updating to firmware v1.3 with our step-by-step guide below.