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Infrastructure

Elrond

Elrond - blockchain platform with adaptive state sharding and Secure Proof-of-Stake

Rating: 4.0

Official contacts
Location: Malta | Switzerland | Romania
Web-resources:   Whitepaper Website
Social networks:
Product source tracking: N/A
Details Description Risks Full analysis Team

Detailed review

Stage of product development
The demo of core blockchain, implemented wallet and blockexplorer are available for checking by investors
Roadmap
December, 2018
Testnet
June, 2019
Mainnet
Token description
ICO date
TBA
Token price
Presale - 0.001 USD / ERD (65% bonus)
Private - 0.001435 USD/ ERD (15% bonus)
Public - 0.00165 USD / ERD
Platform
N/A
Hard cap
15230000
Capitalization of token pool
27650000
Blockchain
Elrond
Token distribution date
31.03.2019
Consensus method
Secure Proof-of-Stake
Escrow
N/A
ICO currencies
USD , ETH
Bounty camping
N/A
Markets
N/A
Token functions
Payment for transactions, running smart contracts and rewards for various contributions
Tokens distribution
Investors (55.0%)
Team (20.0%)
Reserve (15.0%)
Partnerships (5.0%)
Risks
MARKET

- Tough competition from other blockchain platforms

PRODUCT

- No public release is available

BUSINESS MODEL

- Lack of outstanding features for tokens

FINANCES

- High valuation for main sale and private investors with the high potential of cost reduction in the budget

TEAM

- Team previous experience spans many not widely known Romanian companies

Full analysis
Market

Elrond is a blockchain platform and competes with other blockchains promising security, decentralization and scalability. It must be noted first, that this industry is highly competitive, but is attractive thanks to many infrastructural solutions proposing. Elrond does not hide that their work is inspired by other networks projects: Ethereum, Omniledger, Zilliqa, Algorand, ChainSpace. All of them are strong competitors but the Elrond team tries to distinguish itself by both combining others promising ideas (sharding, consensus algorithms, node structuring and etc.) and pushing forward its own ideas. These ideas are described in details with the close comparison to alternative networks.

Product

The product includes two main features: Sharding and Secure Proof-of-Stake which are described well in the Whitepaper. The consensus algorithm is close to the one used in Algorand with some changes. The team promises 10K TPS, minimal latency and negligible fees - reasonable claims with no overpromising statements. The decks are full of technical detail and demonstrate the deep understanding of the blockchain technology, industry and other projects.
According to the roadmap, currently the prototype is released that validates the core hypothesis of doing state sharding and cross-shard transactions. The demo of core blockchain, implemented wallet and blockexplorer are available for checking by investors. Full-featured testnet will be available till the end of 2018. Ready mainnet is projected to the Q2 2019. The development process is lively presumably thanks to having main hypotheses already tested and determined the development plan.
Additional research is ongoing, and the final design may include AI, Cross-chain interoperability or Privacy preserving transactions.

Business model

ERD is used to cover costs for processing transactions, running smart contracts and rewards for various contributions. This model has nothing outstanding from other blockchains, but it cannot be considered as a significant drawback.

Generally, the network consists of users and validators. The network is divided into shards. A validator is assigned to a shard based on an algorithm that keeps the nodes evenly distributed across shards, depending on the tree level. A shard in the lowest level will have half the nodes of a shard one level higher. Each shard contains a randomly selected consensus group. Any block proposer is responsible for aggregate transactions into a new block. 

Finances

Elrond sells 55% of tokens that is an equivalent of 15.2 M USD to be raised. It results in 27.6M USD token pool valuation - may be considered high, but not for those investing on the presale stage who have the valuation of 16.7M USD. By the way, this early round is projected to raise 2.5M USD only for 12.5% of total tokens.
Pre-sale and private sale investors receive the same lock-up period - 4 equal instalments every 3 months from the TGE projected to the Q1 2019 (the first instalment comes at TGE).
Token distribution - 55% for investors, 20% for the team (from which 20% unlocked in the first year in 2 equal tranches starting after TGE, 30% in the second year in 2 equal instalments, 50% in the third year in 2 equal instalments- well-balanced motivation system), 15% are reserved (unlocked in 3 equal instalments over 3 years, starting 1 year after TGE) and 5% for partners (no lock-up).
The team does not hide the budget and even provides the link to the budget plan till 2020. In sum, they estimate 52.6% to R&D, 31.2% to exchanges/legal/audit, 8.2% to operations, 5.7% to BD and only 2.3% to Marketing. Total costs for 2 years ate expected to be $14.7M - reasonable financials especially taking into account other blockchain projects. All funds retained by Elrond will be audited by an internationally respected auditing firm, as promised.
To sum up, the financial information is provided transparently, and all the terms are clear and well-balanced. But some costs and required funds may be reduced (especially for staff based in Romania).

Team

The team includes 12 core members and 7 advisors.

CEO Beniamin Mincu has business experience - 1.5 years in NEM as a Business Development lead on its early stages (top-20 cryptocurrency with capitalization close to 1B USD). Head of research has 20 years of experience including 2 years in IBM, 5 years in Hawlett-Packard, 8 years as CTO in Netopia (Romanian payments&marketing startup, 2.6 million online & mobile transactions in 2015. Head of Engineering - 2 years Software engineering in Continental, 4 years in Intel (Software Consultant). Other core team members have strong experience but not in widely known companies mainly based in Romania. Universities are far from being top-tier - 2-nd tier universities in Romania (like Lucian Blaga in Sibiu)

Advisors are strong - Raul Jordan (Ethereum, Prysmatic Labs, zk Capital), Fabio Canesin and Ethan Fast (City of Zion, NEX) and some others.

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