Elrond (EGLD) is one of the most innovative and fast blockchain solutions that maximizes transactions’ speed with the help of sharding. Elrond’s developers position the project as the entire ecosystem that integrates DeFi, financial technologies, and the Internet of Things.
What is Elrond (EGLD)?
The productivity of 15,000 transactions per second and the transaction cost of $0.001 effectively distinguish it from most competitors. The token EGLD is used to cover network fees, staking, and providing proportional rewards to validators. Elrond may be appealing to many enterprises because it offers the maximum degree of scalability and high decentralization for various applications.
The innovative sharing system also ensures the platform reaches the proper balance between high flexibility and cost-effectiveness. The coordination shard is also used to maximize functionality.
EGLD’s current price is $168.51 with the circulating supply being equal to 21.5 million. The maximum supply is 31.4 million, thus holders are effectively protected from high token’s inflation in the future.
Elrond relies on a complicated algorithm to determine the optimal supply of its tokens to holders, according to the level and structure of their demand. Its current market capitalization is $3.6 billion, making it the 38th largest cryptocurrency at the moment. It relies on the BNB chain contract (BNB20), and it is one of the most dynamic projects that belong to the BNB Chain Ecosystem. EGLD has reached the highest capitalization at the end of November, following the general trend observed in the crypto market.
The rapid correction followed in the subsequent two months, thus threatening potential returns of strategic investors. The demand for scalable solutions and innovative Internet of Things applications may largely affect the future competitive positions of EGLD.
(Figure 1. Elrond’s Ecosystem; Data source – Incrypted)
Investing in EGLD: Pros and Cons
The long-term prospects of investing in EGLD largely depend on the combination of the following major factors: the dynamics of the general demand for DeFi applications, the development of the Internet of Things, competitors’ offerings, and sharding position within a broader range of technological solutions.
The current trends indicate a number of positive indicators for Elrond, especially due to the fact that it has successfully created an entire ecosystem that offers complementary services and solutions to its users.
Thus, EGLD can be reliably included in the general portfolio with the rational minimization of risks by combining assets from several crypto spheres. Moreover, EGLD possesses a high potential of demonstrating growth that exceeds the average level in the industry. The short-term dynamics of EGLD’s price is more uncertain.
(Figure 2. EGLD/USD Price Dynamics (3-Months); Data source – CoinMarketCap)
At the present moment, the major support level is observed at the price of $120, the local minimum of the past three months. EGLD’s price tends to increase in the past several weeks, but it still cannot successfully approach the historic levels. The strong resistance is present at the price of about $340, making it more difficult for EGLD to demonstrate consistent growth in the subsequent months. Overall, it appears to be unreasonable to open long positions at the moment due to the high likelihood of further price corrections.