Lots of Romanians have been asking me about this crypto project which they call our national pride in computer science.

It's called @ElrondNetwork, it's shilled heavily by @beniaminmincu, and it makes ridiculous promises about everything.

Here's why $egld is a scam. Thread

First of all, let's talk about the part that most people find interesting/tempting: the $egld tokens.

I'll forgive them for stealing the name from e-gold. But I won't forgive them for the premine & rigged token allocation.

Only 44% is privately owned.

https://elrond.com/assets/files/elrond-token-metrics.pdf

Would you like to stake to earn some $egld? Well, only 7% of the launch supply will get rewarded for participating in the network's security.

It's as if only 1.4 million bitcoins (out of 21 million) could be mined, while 1.5% more was allocated to marketing & Satoshi got 21.5%.

Of course, this is only a nice metaphor. Nothing of the Elrond project carries on the fair, voluntaryist & decentralized spirit of BTC.

The company even keeps a 17% reserve, while the team owns just as many tokens as were sold during the private round.

Textbook pyramid scheme.

I mean, due to regulatory fears they couldn't even sell their tokens in the USA because they'd get labelled as illegal securities by the SEC.

They didn't have a fair launch like Bitcoin, they printed their own money and spent 10.5% of it on marketing & community building.

But wait, there's the technology. The millions of transactions per second. The perfected Proof of Stake security. The "DeFi 2.0 module". The "bold vision for the post-capitalist world" (quote from the economics paper).

The premine & rigged distribution pay for the tech, right?

Well, the project isn't even that original. It's yet another attempt to take on ETH which takes ideas from Ethereum Serenity (2.0) and mixes them with other similar protocols (Algorand, Ziliqa).

It uses lots of buzzwords, but is it really as decentralized as is claims?

I've checked their blockchain explorer and found that they claim to have 2169 validators. Sounds impressive, but upon closer inspection most of them are labelled "Elrond Bootnode".

They'll probably claim it's the default name for lazy people, but I suspect they rented servers.

In the validators department you can see how the Elrond "community delegation" owns 67% of the cummulative stake. Muh decentralization.

But here's the fun part: it takes 2500 $egld to become a validator.

Hold up a minute, that's almost $250k at today's rate.

For scale, you need 32 ETH to stake in Ethereum 2.0. At today's rate, that's $51k. Almost 5 times less than Elrond.

So staking Elrond is an oligarchic activity that only the founders and a few early adopters can afford.

2500 $egld staking requirement aside, how does this not sound like a pyramid scheme where the founders can exit and dump their bags?

It's not like the network had a fair launch: only 44% of coins were sold privately, everything else was distributed among the elite few.

The incentives to decentralize the network are close to zero, as Elrond appears to always want to have a firm grasp on what's going on.

They run most nodes and stakers, have partners involved for the sake of diversity, and will announce more details later.

The top 3 holders of $egld own more than half of the total supply of 21.1 million coins. The next 6 holders own more than 1/3 of the total supply.

I'm sorry, how is this fair or decentralized?

From what I understand, the project doesn't even try to decentralize, it just wants to make it look like they don't hold a monopoly on development, governance & wealth.

Elrond might decentralize after the early investors dump their bags & stop staking. However...

Since the same early investors control pretty much everything about the project and are more concerned with partnership announcements & pumping the price than network decentralization or $egld's Gini coefficient, the network will most likely die the moment they sell their bags.

So what's left of this cool technology of Elrond's and all of that computer science?

Well, it's open source software that you financed with your hard-earned money. Maybe somebody else will use the code to create something great, maybe not.

Don't say I didn't warn you.