An in-depth analysis of MultiversX's architecture - engineered to tackle any challenge.
MultiversX, originally known as Elrond, is a decentralized and permissionless blockchain that began development in 2017 in Sibiu, Romania. Founded by Beniamin Mincu, Lucian Mincu, and Lucian Todea, it was initially self-financed before raising $1.9 million in a private sale with investments from Binance Labs, NGC Partners, Electric Capital, and other venture capitals. This was followed by a $3.25 million Initial Exchange Offering (IEO) via the Binance Launchpad.
Elrond's mission was straightforward yet ambitious: to offer a scalable, secure, and user-friendly technology capable of onboarding the next billion users. To achieve this, Elrond developed Adaptive State Sharding, a technology that leverages all three types of sharding - network, execution, and state - which it is the only blockchain to master today, especially since day one of its mainnet in 2020. This innovation allows Elrond to offer 30,000 transactions per second (TPS) with a 6-second block time across three different shards at its mainnet launch, operated by over 3,200 nodes running on low-end machines.
Since then, countless innovations and improvements have been made, and more are still to come. Currently, the network can process 10,000 transactions per shard (totaling 30,000 TPS), with plans to increase to 30,000 TPS per shard in upcoming upgrades, as well as achieving sub-second block times and instant finality.
In 2022, Elrond evolved into MultiversX, presenting the evolution of its vision, the future of its blockchain, and its products under a completely new branding. While this may be seen as a strong echo towards the metaverse, it should not be seen as a reference to what it reflects in today's consensus.
To paraphrase Beniamin Mincu from xDay 2022:
"What you've heard about the Metaverse is at best incomplete, if not completely wrong."
Blockchains extend far beyond their technical representations. They are more than decentralized databases; they are creating sovereign digital commodities as vectors of self-organization and, ultimately, could transform into network states.
On the technical front, if the industry seems to be taking three distinct paths - towards a highly modular but still fragmented architecture built on a general settlement layer like Ethereum, towards powerful single-state machines like Solana, or networks of sovereign blockchains in the vision of Cosmos - there is, in reality, a fourth path that few have dared to attempt.
Originally conceived as the evolution of Ethereum before it was abandoned for a rollup-centric roadmap, sharding is the endgame for combining all these visions into one, without sacrificing any of the components that are crucial to the development of a cypherpunk cloud: decentralization, scalability, and security. And this is where the “Multiverse to the power of X” comes into its own.
If the block’s space/time can be seen as the most primary resource for network development, to be economically sound, it must be neither too scarce nor unlimited but must adapt to demand. It must also be malleable, responding to every type of use and need. That's why an architecture must be scalable, modular, and allow the construction of interconnected and sovereign sub-networks; it must be all these things at once.
Sharding isn't "nice to have" nor something towards which you can migrate later; it needs to be built right from the start and specifically for this goal. Only the reunification of homogeneous and heterogeneous sharding, endogenously integrated within the main network, can meet these technical needs without sacrificing our core values while responding to the infinite realities of the possible.
Hence the name MultiversX - the network that can contain them all.
To enable this evolution, MultiversX presented its Sovereign Chains in May 2024, an open source SDK that lets you launch your own blockchain in just a few clicks, while offering the highest degree of customization in the sector. Through the integration of the Gravity Layer, a restaking module, sovereign chains will be able to integrate with the entire network as if they were simply “another shard,” benefiting from unlimited and native composability with the main chain, shared economic security to facilitate bootstrapping, while remaining sovereign over their own governance.
Every ecosystem, nation, company, or living organism - centralized or decentralized - is fundamentally a complex system of energy dissipation. They seek to transform primary goods in order to survive and grow. To do this, they need infrastructure to coordinate all the players involved in the production of added value, but they also need to increase their understanding of their state to become more efficient.
Within the framework of network states, like Kardashev's scale of civilizations, we could establish a framework of reflections as follows:
This is a very limited and incomplete definition but helps to define the framework of this reflection. We could say that, in the short term, MultiversX has made the transition to Stage 1, although it remains a small ecosystem and still needs to grow in weight and recognition in the industry to fully validate this step and ensure its continuity. On the other hand, it already possesses or is in the process of completing Stage 2 primitives that other networks will probably never have. Reaching this stage is probably a matter of a decade of existence and development for any network, and even an ecosystem like Ethereum can't claim to have completely reached it.
Furthermore, these stages don't have to be completely subject to growth in disproportionate size, as there are small but sustainable sovereign states. The Cloud State stage can be reached without necessarily needing to be ranked among the top 10 most highly valued ecosystems in the crypto industry. Survival over time will be much more important.
Still, to accelerate the potential reach of this second stage, MultiversX needs to relaunch a period of growth in order to accelerate its social and technical expansion, ensure the sustainability of the capital already captured, and increase its attractiveness so that it continues to grow at least organically.
The following sections of this paper will help to better quantify the current state of the network and its development, as well as presenting the key features that will enable it to potentially claim a Stage 2 upgrade in the years to come.
Despite limited financial resources and a specific geographic concentration, MultiversX shows robust signs of adoption and community growth. Its technological advantages and focus on user experience are major strengths. With well-executed expansion strategies and by capitalizing on its technological innovations, MultiversX has the potential for much broader adoption, especially if it manages to capture interest in markets like the United States or Asia.
First, MultiversX (formerly known as Elrond) experienced significant community growth throughout 2021, culminating with the launch of the Maiar DEX in November, marking also the peak of the previous bull run. During this time, EGLD reached the top 30 on CoinMarketCap and managed to stay within the top 50 throughout 2022.
Community growth has primarily been concentrated in Romania and France, largely due to partnerships with leading influencers and sponsorships with popular crypto media outlets.
Today, on-chain activity on MultiversX sees about 40,000 active addresses per day, placing its activity level slightly above other Layer 1 networks like Polkadot, Cardano, and Avalanche.
Despite a significant drop in the price of EGLD since its peak in 2021, from $540 to approximately $35 currently, the MultiversX community remains vocal on social networks, indicating strong community engagement despite challenging market conditions.
It's worth noting again that, unlike most high-profile projects which develop in the USA or Asia, benefiting from a potentially much larger user base and significantly greater financial resources, MultiversX's community is mainly concentrated in France and Romania.
We all know how much money can buy visibility (through influencer partnerships, sponsorships, presence at conferences, hackathons, etc.). This visibility helps in acquiring users, who in turn attract developers. Developers then attract more users by building products on the network, setting off a positive feedback loop that creates hype, further attracting users and developers.
Considering its relatively modest fundraising compared to its competitors, MultiversX performs commendably well. The social layer has developed in English, Romanian, and French with extremely active, responsive, and quality content creators, partly explaining the strong social media engagement performances.
Given the limited financial resources and the community's concentration in Romania and France, MultiversX's achievements in terms of community growth and adoption are remarkable. Imagine what the adoption could have been like with development in the USA and with 10x or 100x more resources!
MultiversX is designed to offer high scalability and fast transaction speeds. The platform can handle a high number of transactions per second with minimal latency, thanks to its adaptive state sharding technology. This addresses the blockchain trilemma of scalability, security, and decentralization, making the platform attractive for users and developers. Additionally, transaction fees are particularly low, which is a major incentive for adoption, especially for applications requiring a large number of transactions.
MultiversX places a strong emphasis on user experience (UX/UI), which is crucial for mainstream adoption. The platform stands out for its efforts to make interactions with the blockchain and Web3 technologies more intuitive and accessible to everyone, which is a significant competitive advantage for attracting a broader community.
Initially launched as Maiar in February 2021, it has been a significant growth vector due to its ease of use, generating much excitement within the crypto ecosystem. The xPortal app, which evolved from the Maiar app, perfectly encapsulates this simplification of user experience combined with the proven security of ESDT tokens - wallet draining not being possible on MultiversX. Moreover, the security offered by Guardians 2FA ensures maximum wallet security. With it activated, even if a malicious person gets hold of your seed phrase, your assets cannot be stolen.
This security aspect is highly appreciated by the MultiversX community and allows newcomers to feel protected, which is not common in the crypto ecosystem where hacks are very frequent. The simplicity of the user experience even allows for intuitive on-chain staking. Many beginners, barely understanding the concept of staking, are nonetheless able to delegate their EGLD via xPortal. The app hub also allows them to access DeFi in just a few clicks across several networks (Ethereum, Solana), which is appreciated by the community.
Let's not forget the xCard, which allows for everyday payments and earning cashback; this type of functionality is well-liked, with clear synergies between crypto and real life.
As mentioned earlier, cryptocurrencies and payments go hand in hand! The possibility of having an IBAN and performing P2P payments in fiat or crypto would make xPortal a new kind of neobank that guarantees true ownership of assets. Such a product has the potential to appeal not only within the crypto ecosystem but also beyond. This is a growth lever through banking the unbanked (1.7 billion adults remained without a bank account in 2017 according to the latest World Bank report). We can also note an increasing distrust towards the traditional banking system. Owning one's assets and exchanging them peer-to-peer without intermediaries is a compelling adoption argument for xPortal. After all, P2P payment is the original promise of Bitcoin's whitepaper written by Satoshi Nakamoto.
A marketing campaign involving partnerships with influencers, sponsorships in media, and referral campaigns activating MultiversX's engaged community could be a powerful lever to further the adoption of the xPortal app, particularly during a bull run period.
The much-anticipated Axelar bridge will connect the MultiversX network to over 60 blockchains! Interoperability is crucial for mass adoption. By using technologies like the Axelar bridge, MultiversX can facilitate communication and value transfer between different blockchains, making its ecosystem more attractive to users and developers from other networks.
By allowing the creation of Sovereign Chains, MultiversX can offer customized solutions for different applications or industries that also benefit from the security, infrastructure and network effects of the main chain. This can attract businesses wanting to use blockchain without sharing space with competitors or for reasons of performance and privacy. Companies like Deutsche Telekom or Tencent, already partners with MultiversX, could be considered, as well as institutions and governments. The Romanian government already has a quite deep partnership to the point of using the MultiversX blockchain.
If a single major company decides to onboard its customer base, or if a single government decides to onboard its population onto the MultiversX blockchain, it would instantly bring millions or tens of millions of users onto the network. This would demonstrate MultiversX's scalability and evolution to the world, thus showcasing its technological superiority. Actions speak louder than words, creating a powerful story!
Developing innovative and useful projects on the MultiversX blockchain can demonstrate the network's versatility and power.
These projects are examples among others; they are perhaps the most compelling, but other projects built on MultiversX could be engines of rapid growth.
Simplifying the user experience by reducing account management complexities can make MultiversX more accessible to the general public, particularly those not familiar with blockchain technology. The simplicity of user experience was a major strength for MultiversX, which allowed for significant growth in 2021. Account abstraction through different tools or enhancing the partnership with the XION blockchain could reinforce all other growth levers for MultiversX.
The lack of financial resources and community concentration in Romania and France are limitations that prevent MultiversX from reaching its full adoption potential. This can objectively be seen as a weakness. However, if one changes perspective, this weakness can quickly become a strength. Given that MultiversX can compete on on-chain metrics with competitors that are much more globally visible and have significantly larger financial means, it's clear that the growth margin is enormous. MultiversX is still almost unknown in the U.S.; an impactful marketing campaign in this region could propel MultiversX to levels of visibility never before achieved, and this simple reflection might be enough to interest venture capital funds in financing the blockchain's development.
eGOLD (EGLD) is the cornerstone of the MultiversX ecosystem, serving multiple critical functions within the network. With a fixed maximum supply of 31,415,926 tokens - a nod to the mathematical constant pi - EGLD embodies both scarcity and utility. As of January 2025, the circulating supply stands at approximately 27,803,079 EGLD tokens.
Key Functions of EGLD in the MultiversX Ecosystem:
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At the genesis of the MultiversX blockchain (formerly Elrond), 20 million EGLD tokens were minted during the bootstrapping phase. The allocation was strategically planned to ensure a balanced distribution among various stakeholders:
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The allocations for the private sale, team, and treasury are disbursed according to a specific vesting schedule, commencing from July 4, 2019. This structured release ensures long-term commitment from early stakeholders and provides stability to the ecosystem.
EGLD's tokenomics are designed with a deflationary model in mind, balancing issuance with mechanisms that reduce supply:
This model creates a self-reinforcing cycle where network adoption not only drives demand but also constrains supply, potentially increasing the token's value over time.
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The maximum issuance rate acts as a form of controlled inflation, which can be offset by the network's activity:
This dynamic ensures that the tokenomics are adaptable to the network's growth, promoting a healthy and sustainable ecosystem.
EGLD combines several attributes that make it a powerful asset within MultiversX:
Developers are integral to the MultiversX ecosystem, and EGLD tokenomics include incentives to encourage innovation:
EGLD's design introduces what can be termed a "deflationary feedback loop":
As the network grows and more EGLD is burned:
EGLD's thoughtful tokenomics position it uniquely among digital assets:
EGLD is more than just a transactional token; it's a fundamental component of MultiversX's vision for a scalable, secure, and decentralized network state. Its tokenomics are carefully crafted to promote adoption, incentivize participation, and ensure the long-term sustainability of the ecosystem. As MultiversX continues to innovate and expand, EGLD's role is set to become even more pivotal, driving value for users, developers, validators, and investors alike.
Scaling blockchains is a problem that many developers have put their heads together to solve, with varying degrees of success. In a space with various needs for the ability to scale, such as MultiversX, how do you scale efficiently while still maintaining security and decentralization? MultiversX achieves this using Adaptive State Sharding.
MultiversX constantly optimizes the network by focusing on:
The key to optimizing the network, transactions, and state is to make them adaptable using shards. The idea of using shards is not new in blockchain environments; several networks have used shards working in concert to optimize network traffic, security, and transaction handling. Several Ethereum-compatible chains and other Layer 1 blockchains have utilized shards for network state or for traffic optimization.
What's interesting about MultiversX is its adaptive approach, where the network literally reshapes its shards and architecture based on demand, like a living organism. The shards come together and work in efficient ways:
Imagine if the blockchain were an event space that suddenly had multiple large events booking the space. What if you could partition the space and create multiple event areas running independently, but still utilizing the same staff and resources? This is where having an adaptable plan is key.
By separating the responsibilities in this structure and having them work together at the same time, you can create massive throughput in a dynamically-scaling environment.
MultiversX’s network sharding is an optimal approach because the supply of shards can be elastic. In times of peak demand, the network can spin up more shards, add linear capacity, and handle node communication within shards with ease. Once the demand lessens, the system will merge existing nodes to reduce the overall size of the network, optimizing operations. The mapping of the shards that MultiversX nodes are assigned to is also carefully managed within this process.
Transaction sharding within MultiversX is crucial to master, as the system needs to know exactly where all the transactions are within each individual shard, taking advantage of transaction technologies such as optimal address partitioning and transaction routing, all while maintaining efficient workload distribution among all shards. This sharding will be critical regardless of how small or large the shard network currently is.
State sharding is important simply from the ability to keep the network state quickly synchronized, and assisting with node state redundancy and security. Technologically, state sharding is the most challenging approach, as the state of the network is distributed across all shards for maintenance. By partitioning state across multiple shards, the state management system needs to have efficient data and network pruning mechanisms for not only quick operation but storage optimization and overall network security.
Balancing these shard operations is critical to the success of MultiversX’s Secure Proof-of-Stake mechanism as well for consensus. Each of these systems is designed to minimize malicious attacks on not only each individual shard but the sharding network as a whole.
What’s even better with this approach is that you can apply it to multiple concepts in DeFi. Whether it’s for staking, gaming, metaverse applications, or even for simple and complex smart contract and liquidity transactions, you can have a resilient cluster of network nodes that adaptive sharding can help keep running smoothly with high throughput and overall performance that organizations of all sizes will want behind the scenes.
Traditional blockchain scaling has often felt like playing architectural Tetris - trying to fit growing demands into rigid structures. MultiversX's Adaptive State Sharding approach transforms this paradigm by creating a dynamic, responsive system that adapts to demand like a living organism.
The innovation here isn't just technical - it's philosophical. Rather than building bigger or adding layers, MultiversX has created a system that breathes with its network, expanding when needed, contracting when efficient, all while maintaining the delicate balance of security and decentralization.
In general, there used to be two main reasons why people said that sharding would not work:
Contrary to this, sharding is the design/architecture that increases security and decentralization as the system gets more and more used. At the current moment, MultiversX boasts 30,000 TPS with over 3,200 nodes from all over the world. The nodes can run with really low system requirements - 4 CPU cores, 8 GB of RAM, 200 GB of storage - your average household computer, even your phone, or mini PCs like Raspberry Pi 5 and others.
Blockchain was meant to be a system that can handle even network state attacks and all kinds of catastrophic events. This can be solved only if there are thousands of machines spread out all over the world. The heavier the requirements, the fewer PCs can run in the system. Decentralization means running thousands of nodes. Most high-throughput chains have a really limited number of nodes, generally less than 1,000; some have fewer than 100 and depend on high specifications, which are not necessarily available to anyone in the world, certainly not in developing countries.
As the needs for capacity grow, MultiversX's system will deploy more and more shards, but only if there are enough nodes to keep the system running. Each shard right now needs at least 800 nodes (400 active, 400 waiting), which is a good number for any single-state network. With 10 shards: 8,000 nodes; 20 shards: 16,000 nodes. Thus, one shard is certainly close to as secure as any single-state network. More shards just increase the security of the network, as there are more nodes, which are constantly shuffled from one shard to another.
To prevent collusion, the configuration of each shard needs to change regularly. The MultiversX network does this by shuffling nodes between shards at the end of each epoch. While reshuffling all of the nodes in every epoch would provide the highest security level, it would have a non-negligible impact on the liveness of the system, due to additional latencies that appear when nodes are resynchronizing with their new shards. To avoid these latencies, a carefully controlled proportion of eligible validators belonging to a shard will be redistributed non-deterministically and uniformly to the other shards at the end of each epoch.
Shuffled nodes will be placed in the new shards in a waiting list, meaning that they must spend this epoch performing resynchronization with the new shard. Only after spending an entire epoch in the waiting list is the node allowed to become an eligible validator and join the shard in full.
The unpredictability of the shuffling process is important for the security of the network. For this reason, at the end of each epoch, it is the metachain which computes a list of nodes which must leave their shards and move to new ones. These nodes are selected using the randomness source calculated in the preceding metachain block, which means that the selection and redistribution cannot be known in advance. This computation is deterministic; therefore, it requires no additional communication.
Secure Proof of Stake (SPoS) selects validator nodes for consensus based on the amount of EGLD tokens staked by their operators. Additionally, each validator has an individual rating score that is taken into account - stake alone may only influence, but not completely determine, the selection for consensus. Rating expresses the past behavior of the specific validator and is considered during consensus selection: validators with a higher rating are more likely to be selected. The rating of a validator is recalculated at the end of each epoch, with a few specific exceptions when the rating is adjusted immediately. This way, SPoS promotes meritocracy among validators, encouraging their operators to keep them running smoothly.
A modified BLS (Boneh–Lynn–Shacham) multisignature scheme with two communication rounds is used by the consensus group for signing the block produced by the block proposer.
Nodes from the auction list will be selected to be distributed in the waiting list based on the soft auction mechanism. For each owner, based on their top-up, it computes how many validators they would be able to run by distributing their total top-up per fewer nodes (considering it would not select all of their auction nodes, but only a part of them). This mechanism ensures that for each owner, it selects as many nodes as possible, based on the minimum required top-up to fill the available slots. This is a global selection, not per shard. It preselects the best global nodes at the end of the epoch.
The security of the network is of paramount concern to MultiversX, thus it demonstrates how the system is secured by combining multiple elements, from shuffling to finality to secure randomness to fisherman confirmations and more. The minimum requirements for a shard are 400 eligible nodes (active validators) and 400 nodes waiting (will become active after shuffling), and the metachain contains the same 400 eligible nodes plus 400 nodes waiting.
For a shard takeover, the malicious group needs to have ⅔+1 members in a single shard from the consensus buffer of 400. This equals 267 validators. Taking into consideration the assumption that 25% of the total nodes are malicious, the probability of the malicious group having a supermajority in one shard is 2.88×10^-78.
If we consider having 33% of total network nodes as malicious, the probability of having 267 malicious nodes in one shard is 2.84×10^-47. If we consider having 400 malicious nodes inside a shard (full takeover attack), in which there is no honest node able to raise a challenge, the probability is practically 0 (1×10^-211).
If there are fewer malicious members than ⅔+1, but more than ⅓ of the validators in one shard (less than 267, more than 133), then the shard will only stagnate; it will not create any transactions, as none of the blocks will get its finality status. Good nodes will not construct over bad blocks.
If there are even fewer than ⅓ of the validators in one shard, the shard will just go on and progress. Malicious validators can’t perform any attacks as they do not have the majority and not even the power to stagnate the production of blocks.
Validators which do not sign blocks or do not participate actively in consensus when they should be will get their ratings diminished at every single block. After 24 hours (1 epoch), based on rating, those nodes are automatically removed from the eligible nodes, new nodes from waiting are added, and new nodes are selected from the auction list to the waiting list. And because of bad ratings, all those nodes are slashed at the end of the epoch.
In order to further prevent collusion or malicious takeover, we have to consider the implications of the secure proof of stake system implemented and active since the beginning and the implications of Staking v4 with the open markets for validators.
Now, after five years of a working mainnet, provably secure environment when considering the honest majority assumption, we can try fisherman once again in order to improve the security of services and the network even more. In one of the tweets, Toly (Solana CEO) said that Circle (or Binance) in a sharded network needs to trust the honest majority assumption for state root hash changes in shards where the service does not run nodes. So in some sense, the attack vector is that the service is running an observer for shard 0, because there is the deposit address, and if something happens on shard 2 where the service does not run a node, it can’t detect a double mint/double spend there. And the difference in case of Solana is that, even if 100% of nodes are malicious, Circle will never accept invalid blocks as it is validating the whole state. He forgets to add that on MultiversX, Circle can run full observing squads with less than $100 per month, and they can simply add one more node every time the network starts a new shard.
Create a new internal peer-to-peer (P2P) topic between the nodes of a service - not a public topic, but only between your own set of nodes - in order to send messages about headers and blocks from different shards and from the metachain as well. The messages need to be simple: attest that block header for shard, round, nonce with headerHash was correct. So if the service runs 3 shards plus the metachain, in the internal P2P network, every shard and the metachain node will send the above message for all the blocks they are verifying, every node for their own shard. Verifying means that those nodes have all the data, processed the block, and committed to their storage. These messages are accumulated in an internal pool of “committedBlocks.”
Also, these nodes can send messages in this P2P topic about blocks which are incorrect, or for which they did not receive all the data. Like they see a signed block but they do not have all the data for it, or they tried to process a block but it gave an error or a root hash mismatch or processing mismatch. These messages are accumulated in an internal pool of “incorrectBlocks.”
This information is used by all the other nodes when they are processing blocks. So when a metachain node is processing and finalizing the shard headers, the node will look into the internal pool of committedBlocks and will not process the metachain block proposed by someone which has a shard header which is missing from the committedBlocks pool. The same thing is done on a shard node; it will not process a shard block having the headerHash of a metachain block which is missing from the committedBlocks pool, or if there is a cross-shard header from a shard block which is missing from the committedBlocks.
This resolves the above-mentioned problem, and the nodes will stop processing blocks and will stop at the last correct state for a given service even if there is an incorrect cross-shard miniblock because of a maliciously processed and committed block in one shard. So even if 100% of the network is malicious, the service will not process anything incorrect as it validates everything. And even if one service wants (not obliged) to run nodes for all the shards, this still scales even more than running one big node for a non-sharded ecosystem. It still has horizontal scalability, as you just deploy more nodes, which are inexpensive; you do not depend on super hardcore and expensive machines or new hardware - it just works on everything, even on Raspberry Pi.
Right now, over 95% of the validators run at least 4 nodes, and statistically speaking, at any moment in time, most of the validators will have 1 node in every single shard and the metachain. With the current multi-key node solution, most of the validators run a full observing squad with multi-keys, so they validate all the blocks in all the shards at all times. Now, when the above-mentioned solution is used in the case of validator nodes as well, it will mean that validators will not sign a metablock which finalizes a shard block if that shard block is missing from the committedBlocks pool or if it is in the invalidBlocks pool.
When creating the setup for the nodes, in a specific config, we can write the IP addresses of the nodes from which the node accepts information of correctness from another shard it does not validate. If there is a missing shard there, or there are fewer nodes than the number of shards, the check whether there is a shardBlockHeader of hashX in the “committedBlockPool” will return true at all times. If a node changes shard, as it is shuffled out, it will send a message of changing shard from X to Y, and this change is saved in the “committedBlockPool” component. So at every time, the internal nodes will know what the other nodes are validating/processing, and if some shard is not validated actively, that will return true.
This means that even when we have 200 shards and not everyone will run 200 nodes, there will be a constant ongoing cross-shard validation process between the internal nodes, greatly enhancing the security of the network. Big groups of honest nodes statistically will be all over the chain, thus having even bigger shared security.
Even now, the network is safe with the honest majority assumption, as demonstrated countless times:
For a shard takeover, the malicious group needs to have ⅔+1 members in a single shard from the consensus buffer of 400. This equals 267 validators. Taking into consideration the assumptions that 25% of the total nodes are malicious, the probability of the malicious group having a supermajority in one shard is 2.88×10^-78. If we consider having 33% of total network nodes as malicious, the probability of having 267 malicious nodes is 2.84×10^-47.
With the current setup of 3 shards plus the metachain, we can demonstrate that security in any kind of assumption is the same as for a non-sharded chain. One number someone put was, what if 65% of nodes are malicious, because in that case, there is a 34% chance of having more than 67% of nodes malicious in one shard, and that might introduce problems, like one shard is corrupted and the bad information from there is propagated to others. With the proposed improvements, that shard may create an invalid block, but as the other shards will not have a dishonest majority, that cross-shard information will not be accepted. Also, the invalid block will not be accepted by honest nodes, so no harm is created, and funds are safe.
The chain can be hard-forked from the last correct state, the same as in the case of non-sharded chains. By making the nodes inside a service/staking provider act as fishermen/other shard verifiers, we create shared security that does not depend only on economics but execution.
There is no reason not to adopt sharding. The MultiversX sharded chain is as secure as a single-state chain but is infinitely more scalable. All the web and most of the software industries use partitioning, and there is no reason not to do the same in blockchain. Horizontal scaling is about deploying more nodes when you need more to process. It is far easier and cheaper to run multiple small nodes versus being forced to run insanely heavy machines. All the web is scaling by running multiple services and partitioning processing/data/storage on thousands of small machines, not by building supercomputers.
But if we look deeper, single-state chains require an ever-increasing demand for hardware scaling - bigger and bigger machines - plus they have a limited number of slots for validators (even Ethereum wants to reduce the number of block builders; some want to reduce validators). If we look around at high-performance chains (>100 TPS), we see that the number of validators is quite low, and there is an ever-increasing centralization in power/stake.
Compared to This, Sharding Has a Really Nice Resolve: When new shards are needed, there is an increasing number of slots for validators (800 to be precise).
In tandem with the upcoming staking v4 feature, MultiversX is implementing a crucial change aimed at fostering decentralization, increasing the Nakamoto coefficient, and reinforcing the principles of a decentralized network.
Dynamic Node Limitation: To achieve the decentralization goals, a cap on the number of nodes an owner can have will be introduced. This limitation is dynamic, recalculated at each epoch, ensuring adaptability to the evolving network conditions.
Impact and Considerations: This restriction primarily affects scenarios where users wish to stake new nodes. If an individual already possesses more nodes than the specified threshold, their existing nodes will not be affected. However, they won't be able to stake additional nodes beyond the limit; only unstaking will be allowed.
Decentralization in Action: This initiative encourages staking providers to critically evaluate their node count. For larger providers, having an excessive number of nodes may lead to a decrease in overall APR. Achieving enough top-up to select numerous nodes from the auction could become challenging.
Proactive Measures: Staking providers are encouraged to strategize accordingly. For instance, they might choose to unstake some nodes themselves or explore collaboration with other small providers. Merging resources can enhance their chances of being selected in the auction, especially for those with limited top-up.
This creates market dynamics where new validators are more than welcome, decentralization is pushed forward, and distribution of nodes and staking power is ever-growing. This is only possible with sharding.
The second concern got sidetracked in the last year, as on Ethereum everyone is launching Layer 2s which are hardly interoperable from one to another (seven days to take off tokens from an optimistic rollup - even bridges are better than that). Lately, researchers have started to understand that asynchronous composability is powerful and that is actually how all of Web2 works.
Furthermore, composability was greatly enhanced by MultiversX through the power of native assets, multi-transfers, transferAndExecute processing model, back-transfers, and asynchronous calls with callbacks.
Blockchain technology promised a revolution. Remember financial inclusion for the billions unbanked? Global, unstoppable markets? Where is all that? Not yet here, really. Mainstream financial systems are yet to embrace it.
Two key barriers exist: the systemic resistance to change and the limitations of first-generation blockchain technology. While the political landscape is a discussion for another day, let's delve into the technological roadblocks.
First-generation blockchains like Bitcoin and Ethereum marked significant leaps by enabling trustless transactions and introducing smart contracts. However, their implementations, viewed from today's lens, appear rudimentary.
A lot of their functionality was enabled through uninformed intuition, which, when put to the real-world test, proved to be inadequate. Which was to be expected of a first-generation system. But when these inherent limitations were adopted by most of the crypto space, they became significant problems.
These problems have become so widespread that most people in crypto don’t even consider them to be “problems” anymore - just the de facto state of blockchain.
Not so long ago, a leader in the space was urging their users to create new wallets for interacting with new applications. The goal, they said, was to mitigate a common problem: that signing a malicious transaction in one smart contract would compromise the entire holdings of your wallet.
Imagine what email would be like if one subscription to a newsletter could result in your entire inbox, cloud storage, and more being compromised.
“Just make a new email,” right?
Wrong, of course. Phishing attacks and resulting wallet draining are everyday news; even professional traders have fallen to these traps.
This problem is even bigger, as malicious contracts can easily impersonate influencers or real builders directly from the transfer functions of the token, making it easy for scammers to steal funds.
Even if the user does everything right and sees a good deal for a swap or buying an NFT, miners have the ability to front-run or alter transaction order, thus stealing indirectly from users. Multiple builders embrace MEV (Miner Extractable Value) and say that it is a feature, but it clearly makes ONLY validator services more profitable while making users OVERPAY. Most simple swaps are sandwich attacked on popular chains.
These problems amount to billions of dollars in losses and contribute to the general sentiment that “crypto is unsafe.”
Building even the simplest smart contract has its series of traps like overflows and re-entrancy attacks, through which funds can be externally hijacked. There is almost weekly news that another dApp was drained or attacked through re-entrancy.
MultiversX was architected from the ground up with maximum utility in mind. And have been adding incremental upgrades and improvements to keep up with the requirements of modern finance, identity, value, and the metaverse, and to create a solid foundation for implementing future solutions to new use cases and related problems that will inevitably arise as technology and humanity progress.
MultiversX is not just about lofty ideals; it's about practical, tangible solutions to real-world problems plaguing the blockchain space. The protocol addresses common blockchain threats such as overflows, re-entrancy, and unauthorized access by design. MultiversX acknowledges the critical role tokens - be they coins, NFTs, or SFTs - play in new economies. So the tokens are embedded into the protocol.
This not only negates the possibility of the aforementioned problems but also decreases the cost and increases the speed at which token operations are executed. To not forget developers, it clearly makes their life much simpler - no more headaches of treating multiple complex attacks, built-in composability through the power of tokens, no need to add the extra work to enable interoperability; that is done directly for all tokens by the system.
Building becomes easier; fintech will find a safer space, to which they are used from the banking systems. Also, by integrating all the features, faster product deployments on the blockchain become a reality. Furthermore, MultiversX has introduced Guardians for multi-signature protection, a protocol-level safeguard against a spectrum of security threats. Even if someone got a hold of a secret phrase via phishing or other social paths, there is now an extra layer of protection - an elegant alternative or complementary solution to cold storage devices. All of these important features are built on top of an infrastructure that is inexpensive, scalable, and secure.
The execution of smart contracts plays a central role in modern blockchain networks. MultiversX built a fast and secure virtual machine for this purpose. Because the MultiversX VM executes WebAssembly, it also means that it can execute smart contracts written in any programming language that can be compiled to WASM bytecode. Though, MultiversX only provide support for writing contracts in Rust (Swift is incoming, C is experimental).
Developers are encouraged to use Rust for their smart contracts, however. MultiversX provides a Rust framework which allows for unusually clean and efficient code in smart contracts, a rarity in the blockchain field. A declarative testing framework is bundled as well.
The MultiversX VM was built to be as fast and secure as possible, but without adding unneeded restrictions to what smart contracts can do: the API provided by the VM, called the MultiversX Environment Interface, is comprehensive and easy to use. The MultiversX WASM VM is a stateless VM. When a smart contract is being executed, it is not allowed to write directly to the blockchain or to the storage. This is an important design decision because it obviates the need for reverting operations. So, instead of writing directly to the state, the API will accumulate the changes introduced by the smart contract execution into a transient data structure, which is then applied to the storage and/or blockchain, but only at the end of the execution, and only in case of success. Reading the global state is, of course, permitted at any time. In effect, the global state remains unaffected until the execution ends.
The MultiversX VM executes code using Wasmer as an execution engine, which operates as a just-in-time streaming compiler. Due to the design of Wasmer, the smart contracts are executed at near-native speed.
The version of Wasmer that is embedded in the VM has been modified to add accurate metering with configurable cost per individual WASM opcode. But apart from metering, MultiversX has also modified Wasmer to allow for preemptive execution control at runtime, whereby a smart contract can be stopped immediately by the VM, if needed. Moreover, the compilation efficiency has been improved, and floating-point operations have been forbidden, to ensure strict determinism.
Smart contracts may call each other using the VM's asynchronous API. Because the MultiversX Network is adaptively sharded, it may happen that a smart contract will end up calling another smart contract stored by a different shard. This is handled easily by the MultiversX VM, and the smart contract developer never has to care about shards. In case a contract calls another, and they are both in the same shard, the execution is effectively synchronous, and both contracts are executed without even leaving the VM.
If the contracts happen to be in different shards, no worries - the execution will be automatically switched to an asynchronous mode, the call is sent to its destination shard, executed there, and then the flow finally returns to the caller. Both the synchronous and asynchronous modes are invisible to the smart contract developer: the API is the same for both, and the switch happens at runtime, when needed.
The number of features just goes on and on. Enhanced composability via native tokens, multiTransfers, transferAndExecute processing model, backTransfers, and asynchronous calls with callbacks. Creating an easy one line of code to integrate any smart contract into your own. Independent of the returns of that smart contract, everything is put together in several objects for the developer to easily understand and work on those.
Fungible tokens, such as cryptocurrencies, are interchangeable and have the same value as other tokens of the same type. Non-fungible tokens (NFTs) are unique digital assets that are assigned unique identification codes and metadata, making them one-of-a-kind. Semi-fungible tokens are a combination of the two, offering both interchangeable and unique properties. For us, they are ESDTs.
With ESDTs, you can take advantage of the security, transparency, and versatility of MultiversX blockchain technology to manage and transfer your assets.
One important implication is that a token issued on MultiversX does not need a dedicated smart contract. Token transactions do not require the Virtual Machine at all.
This greatly enhances the efficiency and cost of managing and transferring any kind of token. In effect, this means that custom tokens are as fast and scalable as the native EGLD token itself.
Users also do not need to worry about sharding when transacting custom tokens, because the protocol employs the same handling mechanisms for ESDT transactions across shards as the mechanisms used for the EGLD token. Sharding is therefore automatically handled and invisible to the user.
Technically, the balances of ESDT tokens held by an account are stored directly under the data tree of that account. It also implies that an account can hold balances of any number of custom tokens, in addition to the native EGLD balance. The protocol guarantees that no account can modify the storage of ESDT tokens - neither its own nor of other accounts.
ESDT tokens can be issued, owned, and held by any account on the MultiversX network, which means that both users and smart contracts have the same functionality available to them. Due to the design of ESDT tokens, smart contracts can manage tokens with ease, and they can even react to an ESDT transfer.
Sharding is an emerging blockchain scaling technology that enables faster transaction processing and higher throughput while maintaining decentralization. Among the key players leading the field in sharding is MultiversX. This section evaluates MultiversX in comparison with Near Protocol, Solana, Sui, and Aptos.
Sharding and Scalability
Both MultiversX and Near Protocol use sharding to manage scalability; however, their approaches vary. Near's Nightshade sharding uses a static model, effective for steady throughput but lacking flexibility in adapting to network demand surges. MultiversX's Adaptive State Sharding adjusts the number of shards in response to network activity, maximizing resource efficiency and allowing for dynamic load management, making it better suited for variable, high-demand environments.
Developer Experience and Interoperability
Near emphasizes cross-chain interoperability and developer accessibility, featuring multi-language support and cross-chain solutions like the Rainbow Bridge for Ethereum connectivity. MultiversX offers efficient developer tools that prioritize throughput in DeFi and GameFi, appealing to those seeking a robust ecosystem for high-performance applications.
Throughput and Stability
Solana's Proof of History (PoH), paired with Proof of Stake (PoS), allows for rapid transaction finality but has faced periodic network outages. MultiversX's PoS model with Adaptive Sharding balances speed and reliability, achieving high throughput without compromising network stability, which could make it more attractive for projects prioritizing consistent uptime.
Ecosystem and Developer Community
Solana has developed an expansive ecosystem, particularly in DeFi and GameFi. MultiversX, though smaller, offers a highly adaptable infrastructure that can sustain long-term scalability, appealing to developers seeking a stable, performance-oriented platform.
Data Handling Model and Scalability
Sui utilizes an object-centric data model, treating each transaction as an isolated object, allowing concurrent processing of independent transactions. MultiversX's adaptive sharding is versatile across application types and can be scaled efficiently, favoring a more straightforward scalability path supporting various use cases.
Tokenomics and Community Engagement
Sui's tokenomics emphasize community participation and early adoption. MultiversX offers a more balanced approach to token distribution, engaging both community and institutional players, supporting sustained growth across sectors like DeFi and GameFi.
Parallel Processing and Consensus Efficiency
Aptos employs a parallel execution engine with AptosBFT consensus, enhancing transaction speed by processing multiple transactions simultaneously. MultiversX achieves similar results through adaptive sharding within a PoS framework, effectively balancing high-speed processing with simpler infrastructure.
Developer and Ecosystem Focus
Aptos emphasizes community-driven development for quick deployment. MultiversX offers a developer-friendly environment with tools tailored for scalable, high-performance applications, positioning it as a dependable platform for developers seeking long-term stability.
Through Adaptive State Sharding and a reliable Proof of Stake consensus, MultiversX balances high performance, flexibility, and developer accessibility. Compared to Near's static sharding, Solana's intermittent stability, and the specialized models of Sui and Aptos, MultiversX emerges as a flexible, efficient solution suited for DeFi, GameFi, and other high-throughput applications. Its dynamic sharding approach and commitment to long-term ecosystem stability make it a compelling option for developers and enterprises aiming to scale in a reliable, adaptable Layer 1 environment.
Community growth is inherently tied to global adoption; in Web3, global adoption will inherently lead to healthy and sustained community growth. But what exactly is required to drive global adoption to the next level?
As of now, there are around 560 million cryptocurrency holders worldwide out of a global population of 8.2 billion. This represents less than 7% of the world's population actively holding cryptocurrency. While this doesn't provide a full picture of technological adoption, it offers a glimpse into how early we are in this rapidly evolving sector.
The adoption of blockchain technology tells a similar story; only a negligible percentage of the population currently utilizes blockchain technology. This presents a chicken-and-egg problem, as not enough use cases lead to limited usage.
Asia has the most blockchain users, aligning with population density and the continent's forward-thinking, innovative mindset. One cannot discount the fact that a bigger market drives more adoption.
In terms of cryptocurrency and blockchain technology adoption, we are at or around "The Chasm" - a critical point where adoption moves from early adopters to the early majority. Crossing this chasm requires immense, concentrated effort.
So what will trigger the next global adoption phase of blockchain technology? As we move beyond the "Technology Enthusiasts" and "Visionary" phases, the focus needs to shift toward pragmatism, which brings mainstream global adoption.
One key mindset shift is the seamless and painless transition from current Web2 technology to utilizing blockchain/Web3 technology. This can be done in phases, true to the pragmatic characteristics of the mainstream market. The goal is to ensure that the experience is so smooth that on-chain operations are performed with little or no knowledge by the users, thereby achieving adoption without explicit effort or conscious knowledge of the underlying technology.
One of the most effective ways to drive global adoption is through enterprise adoption. Enterprises of all sizes are directly influential on end-users and governments. The adoption of new technology on platforms with millions of users directly translates to adoption by the majority of its user base. Enough adoption from enterprises can influence institutions and governments to implement and improve the technology, preparing for the Late Majority phase.
However, driving enterprise adoption is challenging. Medium and larger enterprises are often slow to act, have procedural barriers, and lack the drive to venture beyond the Proof of Concept (POC) stage. To overcome this, MultiversX and the greater Web3 industry will require a mindset change from a technology-first narrative to finding real-world problems for which the technology can provide solutions.
The MultiversX technology is ahead of the pack in the overall Web3 industry, but this has not stopped the team from producing groundbreaking improvements and innovation during the bear market that we've just experienced.
Great technology is never finished, so where to from here?
The technology foundations of MultiversX have always been strong from the inception of MultiversX, formerly Elrond. MultiversX has consistently been one of, if not the most, sophisticated Layer-1 blockchains globally. Whether we are talking about scalability, efficiency, security, or the Apple-like suite of vertical products, one will be hard-pushed to find another comparable ecosystem that is so all-around and industry-agnostic.
The MultiversX development can be divided into two distinctive channels:
The core network must stay ahead to remain industry-best, continuously innovating and breaking barriers. The team has meticulously worked through this since inception and must continue to excel in this area for the foreseeable future.
Product-level developments have been more challenging, with various experiments conducted to date. Moving forward, MultiversX must focus on conducting thorough market research and comprehensive strategies beforehand to ensure the probability of success for future products is optimal.
MultiversX must focus on solving problems that have been properly identified, researched, and validated, building feasible product-market-fit solutions with an adoption-ready user base.
One primary reason MultiversX is not widely understood is that much of the messaging caters only to the technologically adept. This is perfect for early adopters and innovators but becomes a problem as MultiversX and Web3 approach and break through the chasm to the mainstream market.
MultiversX's forte is its technical foundation, which should remain. However, a parallel messaging channel should be created to tell the story of MultiversX and articulate its capabilities in a non-technical, topic-relevant way.
Typical examples include:
The majority of enterprises and users care about how technology can benefit them, not the technical details.
In many technological advancements, there's a problematic trend of approaching problems by trying to fit a square peg into a round hole - a technology solution looking for a problem.
MultiversX must reverse this mindset, starting with a clean slate to define what it means to provide a solution to a particular problem. The core essence is that the problem should come before the solution, not the other way around.
This applies to both protocol and product-level developments. After the technical foundations stabilize, the orientation of the protocol and products should trend toward providing solutions to problems.
However, this doesn't mean MultiversX should stop pushing the boundaries of innovation. Quite the contrary - the ecosystem needs to harness the ability to foresee future problems, staying strategic steps ahead by knowing what enterprises and users need before they even know it.
The MultiversX ecosystem hosts a variety of projects leveraging its robust architecture to address diverse sectors within Web3. In DeFi, projects focus on advanced financial tools, such as lending protocols and liquidity solutions, that offer users more accessible and efficient ways to engage with decentralized finance. NFT projects bring innovative digital asset ownership experiences, utilizing MultiversX’s infrastructure for secure, scalable NFT transactions and unique use cases like NFT-based collateral. Within GameFi, projects harness the network’s high throughput to create immersive, blockchain-integrated gaming experiences, demonstrating blockchain’s potential to enhance interactivity and player-driven economies.
The following projects showcase how MultiversX’s infrastructure not only supports various high-demand applications but also fosters growth across digital finance, asset ownership, and interactive entertainment, establishing a strong foundation for the expansion of Web3.
1. Hatom Protocol
Hatom Protocol serves as a key lending and borrowing platform within the MultiversX ecosystem, designed to leverage its high-speed, low-latency capabilities. Recently, Hatom introduced USH and Booster V2 on the Public Devnet, a significant step to expand liquidity and introduce new yield opportunities. USH, designed as a foundational DeFi asset, is anticipated to drive substantial liquidity while providing users with optimized returns. In the testing phase, Hatom has allocated a $10,000 reward pool for community engagement, incentivizing the top 100 most active participants.
2. xExchange
xExchange is the primary decentralized exchange on MultiversX, offering essential DeFi tools like token swapping, staking, and liquidity pools. Built on MultiversX’s sharded infrastructure, xExchange delivers high-speed, low-cost transactions that form a core liquidity foundation for the ecosystem. Recent updates have focused on refining usability and enhancing performance.
3. OneDex
OneDex offers a decentralized trading platform within the MultiversX ecosystem, allowing users access to features like token swaps and automated Dollar Cost Averaging (DCA). The OneDex DCA tool enables users to make consistent investments in ESDT tokens, including $EGLD, with minimal fees.
4. AshSwap
AshSwap is a core liquidity provider on MultiversX, supporting over 200 ESDT tokens and maintaining high liquidity standards. AshSwap has reached significant milestones, including accumulating $280 million in trading volume since the launch of its Aggregator v2.
5. Pulsar Money
Pulsar Money is a versatile platform offering advanced features like airdrop aggregation and a Smart Payments Hub designed to engage users across DeFi, NFTs, gaming, and payments. Its innovative approach includes a gamified points system that rewards active community members based on engagement.
1. EAPES
A standout 3D ape collection of 10,000 NFTs, known for winning the Best Design and Innovative Project award at xDay. EAPES leads in transaction volume on MultiversX, emphasizing its vibrant, community-driven ecosystem and dedicated fanbase, also known as “The Tribe.”
2. QoWattCards
A utility-rich NFT series that provides holders with DAO governance rights, passive income opportunities, and discounts, embodying strong holder value within the MultiversX ecosystem.
3. Cow Cow
This generative collection of 10,000 cow avatars offers a clean and recognizable digital brand, resonating with collectors through its charming, diverse designs.
4. Hatom Unbond NFT (HLSR)
This NFT acts as a Liquid Staking Receipt, representing unstaked or undelegated assets from Hatom’s staking protocol. Holders can redeem it for EGLD after the cooldown period, making it a functional asset in Hatom’s DeFi environment.
5. Project X
Featuring 5,000 unique PFPs, Project X’s "Subject X" collection powers its DAO, blending digital identity with governance for a truly community-oriented experience.
1. Cantina Royale
Combining both Free to Play and Play to Earn models, Cantina Royale offers an action-packed experience that merges traditional gaming with Web3 rewards. NFT holders can earn passive income by lending their NFTs to other players, making it accessible for casual players and valuable for NFT holders.
2. Knights of Cathena
This game features strategic, turn-based gameplay set in a mystical world, offering "Chess on Steroids"-style mechanics. Players engage in PvP battles for resources, with NFTs and tokens integrated into gameplay to enhance strategy and rewards.
3. Giants Village
A social-oriented, Web3-driven village-building game, Giants Village aims to foster a community space where players can complete quests, participate in raffles, and engage in a collaborative environment.
4. Gods Of Fire
Gods of Fire is an upcoming multiplayer online game built on the MultiversX blockchain, where players can own and monetize in-game assets while earning $EGODS tokens. Players lead dragons into epic battles to compete for dominance over the Valley of Dragons, engaging both Web2 and Web3 users by allowing connections via the xPortal App or email.
MultiversX isn't just another player in the blockchain world; it's aiming to redefine what decentralized networks can be. By building Adaptive State Sharding into its core from the start, it solves the usual problems of scaling and security without giving up on decentralization. This makes MultiversX flexible and able to grow with the needs of its users and developers, much like a living, breathing system.
What really makes MultiversX stand out is its bold goal to create a self-sustaining digital ecosystem - a "network state" that goes beyond just handling transactions. It's about building communities, supporting a wide range of applications, and maybe even changing how we interact with digital platforms altogether.
Even with challenges like limited funding and a community that's mostly based in certain areas, MultiversX has shown that a strong focus on technology and user experience can outshine even bigger competitors. By making the platform user-friendly, secure, and welcoming to developers, it has built a passionate community and attracted innovative projects that take advantage of its unique features.
Looking ahead, MultiversX has plenty of opportunities but also hurdles that need more than just tech solutions. For the network to be adopted worldwide, it will need to form key partnerships, communicate its value clearly to people beyond the tech-savvy crowd, and stay dedicated to solving real-world problems.
Moreover, MultiversX's advanced architecture is well-prepared for the integration of AI technologies. Its scalable and high-throughput network can handle the significant computational demands of AI applications, allowing developers to build decentralized AI platforms, data marketplaces, and machine learning models directly on the blockchain. The secure and efficient infrastructure of MultiversX enables the seamless operation of AI algorithms and the management of large datasets, which are essential for training and deploying AI solutions.
In essence, MultiversX shows the power of big ideas in technology. It challenges the usual ways of thinking about scaling and security and offers a fresh take on how a blockchain network can grow into a complex, self-managing ecosystem. As the digital landscape keeps evolving, MultiversX is not just ready to be part of the future of decentralized networks - it's bound to help shape that future.
