From the ambitious task placed upon the Fellowship to an equally ambitious blockchain project, Elrond is set to improve its staking economy on the 14th of June via its Staking 3.5 update.
The update will fine-tune features of the newly introduced staking pools and makes staking EGLD more lucrative and participatory — indirectly increasing network security.
Sever Moldovean, Elrond’s Blockchain Project Manager told Accointing.com:
“We’re moving into Staking Phase 3.5 on Monday June 14 — this important update allows existing validators to become staking providers without the need to unstake their node rst, which was a blocker for most.”
Established in 2017, Elrond has set itself the task of re-imagining the existing blockchain infrastructure, with the goal of providing a more secure, decentralized, and interoperable public blockchain.
“It was clear what is the potential of blockchain technology and how programmable money and assets can play a critical role in shaping our future.It was also clear that the internet was roughly in the early 90’s […] So we decided to give blockchain its broadband and web-browser moment.”Sever Moldovean
The two cornerstones of Elrond’s mission rest upon their innovative adaptive state sharding and secure proof-of-stake consensus mechanism (SPoS):
- Adaptive state sharding allows Elrond to split its blockchain into multiple smaller blockchains (shards). When a blockchain is split into shards, each shard contains its own data and in the case of Elrond, is operated by various participating validators. By sharding, the information flow between blockchains is improved, increasing interoperability and scalability.
- Secure proof-of-stake is a consensus mechanism unique to Elrond which eliminates the computation cost of proof-of-work and increases the security of a proof-of-stake consensus mechanism. Under SPoS each node in a shard can determine who proposes and validates a block, creating a consensus group. A node is chosen based on its rating and amount staked. As a result, block consensus can be reached meritocratically, faster, and more securely.
Staking 3.0 and 3.5
On the 26 of March Elrond’s Co-Founder and CEO, Beniamin Mincu announced the launch of Staking Phase 3 which was ushered in by their Mainnet upgrade and Elrond Go v1.1.37 validator call to action.
Staking Phase 3.0 focused on updating and expanding Elrond’s staking economy, with the introduction of staking pools the headline upgrade. By creating staking pools, stakeholders can join their computational resources and receive rewards for their work.
The more staking occurs, the greater the number of node validators exist on the network, making the network more secure.
Key updates required to operate the staking pools included:
- Increasing the number of validator nodes from 2,169 to 3,200 to incentivize participant staking and raise the amount of eGold staked to equal 55% of circulating supply. The increase in the maximum number of validator nodes should help secure network security and transaction efficiency.
• Increase the amount of stake per node to more than 2500 EGLD per node. To encourage staking, a base-stake of 2500 EGLD with an APR of 21% has been implemented, with an additional ‘topping-up’ reward of 9% APR reward offered for staking more EGLD. Additionally, Elrond has decided to eliminate a cap on the maximum amount of eGold that can be staked.
• A Delegation Manager has been built into the Elrond protocol, allowing node operators to set up their staking pools. Embedded within the delegation manager is a delegation smart contract that automates certain staking pool management duties such tracking accounts that have provided liquidity into the staking pool.
- Changes to the APR rewards by decreasing the APR from 21% to 20% for the fixed base-stake and increasing the APR from 9% to 14% for topping-up. The aim is to further promote stakes to stake more EGLD into one node, incentivizing larger staking caps.
• Promote greater staking participation by allowing existing validators to become staking providers and allowing them to move their staked EGLD into their own staking pools.
• Merging Validators into staking pools by whitelisting staking pools on the wallet of validators. This allows the EGLD staked on a wallet to be merged with the staking pool, giving validators opportunities to reap staking rewards.
Short-Term Price Outlook
Reflecting the downtrend experienced across the market, EGLD too has seen its price slip -1.89% over the past month.
Turning to technical indicators, Staking 3.0 was accompanied by a strong bullish candlestick, driving a solid month of positive price movement.
The tightening of the Bollinger bands in June suggests that EGLD volatility is on the low, increasing the likelihood of a sharp price movement. Additionally, the RSI is trending towards a score of 30, indicating that EGLD may be slightly oversold. If EGLD dips below 30, then an upward price correction is imminent.
Taking all this information into account, the increase in users, amount staked, the positive response to Staking 3.0, alongside the tightening of the Bollinger bands and downward trending RSI may point towards an upward price movement in the near future.
What to Expect from Staking 3.5
The introduction of Staking 3.5 will only enhance Elrond’s staking capabilities, with greater accessibility to stake a key feature to growing an engaging community.
“We set out to build Elrond, which we designed to be a high bandwidth, high speed, low cost financial system, and to make it available to everyone. Staking 3.5 […] further increases the dynamic of staking and opens up the possibility for any node runner to offer delegation services for the community.”
Interestingly, Staking 3.5 has been heralded by Elrond as one of its most crucial updates in order to grow their community and develop the infrastructure for their DeFi 2.0 and Autonomous Banking solution.
Like the nine fellows that set forth from Rivendel, the future of Elrond may not be the easiest path to tread, but the future looks bright.