New Economics: eGLD Reasoning & Operational Process
Think about it for a second. What if you could have a new economic system with Ethereum-like programmability, internet-like speed and costs, and Apple-like user experience. What would be the smartest way to bootstrap the system to global adoption with unparalleled speed? Well, it's with improved Bitcoin-like economics.
This is what we've built at Elrond. Incidentally decentralisation properties are a big bonus on top of all that. This is the first complete solution that, we believe, will redefine blockchain, money and open a new economy for hundreds of millions of people around the world.
Our Aims and Reasoning
The Elrond to Elrond Gold change proposed yesterday, is the result of a long thought process on how by reasoning from first principles we could build the most robust digital currency that could go beyond the current crypto space, to become a global reserve for the digital economy.
Whether in terms of technology with Elrond network, in terms of product with Maiar, or in terms of Economics with Elrond Gold, the Elrond team will always strive to bring the most valuable ideas possible to life.
What's curious is that we’ve reached this remarkable point, by pursuing ideas that were contrarian, non-obvious, and even considered wrong at the time. This is the way innovative products and ideas come to life.
By having a deep understanding of the problems we are trying to solve, we’ve discovered and recognized ideas that have an immense value because they are true, even though, by necessity, they may not be obvious at first. We believe the same applies to Elrond Gold.
Here’s how it will work.
The Elrond Gold Important Facts
eGLD is the native Mainnet token, replacing the ERD ERC20 and BEP2 tokens.
1 eGLD = 1000 ERD. When eGLD starts being traded, it will automatically start at 1000x the price of ERD. This is a process we have already solved with our partner exchanges. In USD, the value of your ERD will be exactly the same as the value of your eGLD.
For example: if you have 1 000 ERD which is worth $25 USD. It will become 1 eGLD which is worth $25 USD. The USD price is just an example for the price at the time of the swap.
The swapping from ERD to eGLD will start in around 30-60 days. Until then ERD holders don't have to do anything. ERD delegated and staked into the Genesis SCs are automatically swapped and minted into eGLD 1000 : 1 via the genesis block.
Swapping will be enabled on our listing partners, such as Binance. You will be able to exchange your ERD into eGLD very easily and smoothly. Until then trading of ERD will not be affected and will remain exactly the same.
Once swapping is enabled and eGLD is integrated with our partners wallets and exchanges, eGLD will be the main token listed and tradable. Swapping from ERD (ERC20 and BEP2) into eGLD will be supported for a sufficiently long period of time - 6 to 12 months.
Important takeaways from an Economic perspective
eGLD is not a second currency, but a major update and improvement, replacing the old model and ERD token.
No major changes to the existing Economic model, but since 1 eGLD = 1 000 ERD we just adapt calculations from 20 Bil ERD to 20 Mil eGLD. Stake per node at genesis shifts from 2.5 Mil ERD to 2 500 eGLD. 1 eGLD = 1000 ERD, so price of 1 eGLD = 1000x more than 1 ERD.
During the first 10 years the maximum possible number of eGLD to be issued for validator rewards is capped at 11,415,927 eGLD. So the maximum total supply is 31,415,927 eGLD, which is significantly better than the old model since now it is capped.
Since adoption via fees paid reduces the issuance of new eGLD, the maximum supply will never be reached and will be significantly lower depending on the fee sum accumulated in total in the next 10 years. If enough TPS demand is generated we can reach 0% issuance much sooner than the 10th year.
Maximum theoretical issuance (considering 0 fees) per year:
To sum up, Elrond is not a static, dogmatic and rigid technology. It is a dynamic, complex, lively community, where new discoveries can be made every day. Above all, we want you to know that at Elrond you’ll always have a voice to provide valuable feedback and influence change.
Thank you for your support and please reach out to us on our official channels and let us know what you think about this change.
You can re-watch the AMA where we discussed the above and took additional questions about eGLD, Maiar and our blockchain.
Beniamin Mincu, Co-founder of MultiversX, is a distinguished tech visionary and one of Europe’s early blockchain pioneers.
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