TL;DR
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Introduction
Today we bring you one of the more impressive crypto gainers this past week, Zilliqa. The name has a nice ring to it, so you know it's a good coin. But what is it about? I’m glad you're asking the right questions.
Zilliqa (ZIL)
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Let's start with an example. Suppose you transfer money from one Ethereum wallet to another. You can imagine the transaction fee being overwhelmingly high for such a small transfer. Ethereum fees and its network congestion due to yield farming have blown the roof off of the building more recently. In fact, building applications on Ethereum have become increasingly expensive. This problem is known as scaling in the crypto world. What can be done about it? Presenting Zilliqa (Zil). Now wait minutecrypto, that does not explain how this project works. In fact, I think I became more confused. Aghh, not to worry.
The main problem most crypto projects face, especially the older ones, is scalability. In the crypto sense, scalability is simply the ability to process large amounts of data, aka transactions, on a given network. Zil is designed to scale from the very moment it is launched, clearing thousands of transactions per second. This allows for sophisticated financial instruments to be built on top of it.
How Does Zilliqa Work?
Like Ethereum, Zilliqa is a smart contract blockchain. Now, smart contracts need to be programmed using Scillia, a programming language developed for Zilliqa. The advantage of Scillia is that it helps programmers create contracts without vulnerabilities.
The main selling point for Zilliqa is that it is a smart contract platform that is designed to scale. There are many ways blockchains can achieve this. Zilliqa uses what is called sharding. Oh, that's a big word. Not to worry let’s explain sharding using an example: suppose you wish to empty a tank full of water as soon as possible. So let’s say you cut a hole. It might work but could take a long time before you clear all the water in the tank. Instead, you decide to cut 10 more holes and use that to empty the water tank. That’s what sharding does.
Bringing this back to the crypto world, instead of having one single chain (aka “main chain” or “base chain”) you would split the chain into multiple parts, known as shards. Due to this, the network is alleviated from congestion since usage demands are spread over different shards. Conveniently, as the network grows, Zilliqa can add more shards, thus reducing network congestion.
However, like all good ideas, none are perfect. In this case, sharding comes with a downside, that is the lack of interoperability. So what is interoperability you may ask? In crypto, interoperability is simply the ability of a shard to communicate with another shard. So having different shards solves one issue, mainly scalability, but offers another problem, interoperability or the lack of communication between shards.
One solution to this is to have similar applications built on the same shard. For instance, one shard could house all decentralized exchanges, while another could contain all smart contracts that deal with insurance companies and so forth.
Tokenomics
Now to the meat and potatoes. The tokenomics of this coin. Zil has been doing amazing the past week and a half in terms of price change. It has gone from $0.03 cents to $0.18 cents. An increase of 267%. Talk about gains. Expect this coin to continue rallying towards the upside.
According to Coinmarketcap, there is a current circulating supply of 12.5 billion with 6.8% annual inflation. Compare that to Bitcoin’s 2% annual inflation and Ethereum’s 5%. Further, this coin has a max supply of 21 billion.
ZIL is the native token of this blockchain and it is used for transaction fees and paying off miners for securing the network.
Future of Zil
Due to Ethereum's congested network and high transaction fees, scalable smart contract platforms like Zilliqa are becoming more appealing. In order for Zilliqa to be successful, it needs to attract a whole new generation of users, developers, and applications. Though it won't be easy, the more congested Ethereum becomes, the more developers will look for alternative platforms on which to build.
Metapolis
Further, Zilliqa will launch something called Metapolis on April 2nd. It is Zilliqa’s attempt to navigate and be part of the metaverse. With this project looking ready to go, it is one to keep an eye out for.
Final Thoughts
How far do you think this project can go? Drop it down in the comments below.
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