Since the beginning of 2022, multi-chain networks have been in the spotlight of the active discussion of the Layer 1 blockchain infrastructure. As you know, multi-chain networks allow projects to simultaneously work on two or more blockchains, support accelerated chain building, and serve as a scaling layer for other blockchains. There are not many protocols that specialize in multi-chains. One of these is Polkadot. So, in January 2022, the Moonbeam project was launched — the first parachain received a slot in the Polkadot auctions.
What Is Moonbeam?
Moonbeam is a Layer 1 chain compatible with the Ethereum Virtual Machine (EVM). The project is a parachain in the Polkadot network, which mirrors and expands the Ethereum feature set. Since Moonbeam is EVM-compatible, developers of decentralized applications can quickly transfer their projects with minimal changes to the Moonbeam network and benefit from reduced fees, attracting more users, access to other chains connected to Polkadot, and other features that Ethereum does not provide.
The main advantage of Moonbeam is its high compatibility with EVM. This is not just another implementation of EVM but a full-fledged, highly specialized Layer 1 chain that can work with Ethereum logs, signatures, accounts, and keys. In addition, Moonbeam developers have implemented additional features such as staking, cross-chain integration, and decentralized governance.
- Support for Ethereum accounts and keys, support for ECDSA signatures.
- Deployment of Solidity-based smart contracts in the Polkadot environment without many changes.
- A complete Web3 RPC set allows Ethereum developers to use their usual tools, such as Remix, MetaMask, Waffle, and others.
- Built-in support for assets such as ERC-20 and DOT, as well as services such as The Graph, Chainlink, and others.
- Expansion of the basic features of Ethereum (staking, on-chain governance, cross-chain integration).
- The ability to subscribe to events related to contracts, balances, and on-chain transactions update.
The multi-chain approach of Moonbeam helps developers of decentralized applications expand users’ reach and explore new markets. Due to high gas fees, some market segments may not be available to Ethereum. Developers and users are provided with access to DOT, KSM, and many other assets, including Bitcoin and ERC-20 tokens.
How Does Moonbeam Work?
Smart contracts within the framework of Moonbeam can be implemented with the help of familiar Ethereum-based languages and tools. The protocol supports working with the programming language of Solidity, Vyper, and others that comply with the Ethereum bytecode. At the same time, Moonbeam provides an environment that optimally combines security, versatility, and scalability so that developers can quickly transfer and create projects using familiar tools.
At the same time, since Moonbeam is a Polkadot parachain, it allows developers to take advantage of cross-chain advantages to easily integrate smart contracts with other chains in the Polkadot ecosystem.
Unlike Ethereum, which is still functioning based on the Proof of Work consensus mechanism, Moonbeam uses the Proof of Stake model, which eliminates scalability and energy consumption problems. In addition, Moonbeam is a community-governed project and allows token holders to participate in an open discussion and make proposals for the refinement of the protocol.
GLMR token is the Moonbeam utility token. The token has a total supply of 1 billion, of which more than 330 million are in circulation at the time of writing. To counteract inflation, the developers have implemented a burning mechanism. Thus, 80% of the fees collected due to GLMR transactions are burned, and 20% is sent to the treasury.
The main use cases of the GLMR token include:
- Support for gas accounting when executing smart contracts
- Ensuring the security of the protocol
- Payment of staking rewards
- Facilitates decentralized governance
- Used to pay transaction fees
Moonbeam is one of the most promising projects with which Ethereum developers can quickly transfer their projects and benefit from scalability, cost-effectiveness, a hybrid approach, and additional functionality. The project already has many partners who use the Moonbeam platform to build their applications. Moreover, Moonbeam provides a high level of decentralization, a rich set of tools, security, and cost-effectiveness, thanks to which the platform constantly attracts large blockchain projects and users.