What is Zilliqa (ZIL)?
Zilliqa is a decentralized finance (DeFi) network that uses a native token known as Zilling (ZIL). The platform employs blockchain sharding technology to process transactions at a faster speed. ZIL is the utility token that is used for on-chain transaction processing and smart contract operations.
Zilliqa was developed as a layer 2 scalability solution for Ethereum. It uses a unique mining mechanism for its network security and consensus protocol, combining the practices of Proof-of-Work (PoW) and the Practical Byzantine Fault Tolerance (PBFT). You can learn more about the Zilliqa price performance by looking at the chart above.
Who Is the Team Behind Zilliqa?
Prateek Saxena is one of the key names behind the Zilliqa crypto project. As a computer science researcher affiliated with the National University of Singapore, he has written numerous papers on digital security. One of the research projects he published with his students covered the efficiency prospects of blockchains that use sharding.
Many large-scale networks experience problems with scalability as the number of nodes and transactions increases. Sharding is a scalability solution for blockchain networks. It’s used to divide transaction history into smaller pieces of data that can be processed more easily.
Zilliqa was based on the ideas presented in Saxena’s research. As the co-founder of Anquan Capital alongside FinTech entrepreneur Max Kantelia and venture capitalist Juzar Motiwalla, Saxena started working on implementing his sharding hypothesis into practice.
The team began working on the project in 2017. It took a year before the project’s testnet was launched. The official mainnet launch occurred in June 2019, two years since its inception. At launch, the ZIL price was valued at around $0.08.
A token generation event (TGE) was held in early 2018. In 2020, Zilliqa held a token swap event, during which the interim ERC-20 tokens were swapped for the Mainnet assets. The asset has shown high volatility throughout the years, with the Zilliqa price frequently fluctuating.
Zilliqa has experienced several outstanding rises and declines and tends to follow the general market trends. A significant peak was reached in May 2021, with the ZIL price exceeding $0.25.
What Are the Features and Uses of Zilliqa?
The supply of Zilliqa coins is finite, and the maximum cap was set to 21 billion. The limited supply means that the asset is deflationary. Over time, as the number of tokens in circulation decreases, the Zilliqa price is expected to rise. 60% of the overall supply, or roughly 12.6 billion ZIL, was generated during the token generation event.
Mining is the means of producing the remaining 8.4 billion tokens. Based on the Zilliqa crypto whitepaper, it’s expected that all tokens will be mined within ten years of launch, with 80% of the tokens being mined within the first four years. Mining rewards will also steadily decrease.
Zilliqa offers a unique approach to network safety and mining. The project uses Proof-of-Work as a security mechanism, which allows users to mine the token. However, Zilliqa also has staking and yield farming functionalities that are integrated into the token allocation. The consensus mechanism uses the Practical Byzantine Fault Tolerance (PBFT).
Proof-of-Work protects the network and its adjacent token from Sybil attacks. Due to their structure, sharding-based blockchains are more prone to security vulnerabilities which Zilliqa aims to patch with its unique security features.
Relying on PoW only for network security also makes Zilliqa more energy-efficient. This could positively impact the ZIL price in the future as more concerns regarding the carbon footprint of blockchain technology rise. It also allows the network to process a large scale of transactions in seconds.
The smart contracts on Zilliqa are programmed using the Scilla language, which was developed specifically for the platform. It’s an acronym for smart contract intermediate-level language. Users can create dApps that, according to developers, are less prone to bugs and offer secure verification using automated mathematical proofs.
As a sharded network, Zilliqa offers the ability to process thousands of transactions in a second, which is significantly faster than the 15 transactions per second available on Ethereum (ETH). The high transaction rate makes the blockchain more scalable, and new information is included in the distributed ledger nearly instantaneously.
Zilling acts as the global utility token. It’s used to run smart contracts and cover the transaction fees. Among the main commercial functions of the Zilliqa crypto platform are DeFi services, dApps, a token launchpad, and an NFT Marketplace.
ZIL can be used to interact with dApps developed on the platform, as well as create and launch new tokens that are tied to the apps. The platform offers low fees for its financial services, as the 0.1 ZIL price point is the average cost for a transaction.
It’s also possible to earn Zilliqa tokens. Users can stake their assets to earn passive rewards. Staking acts as one of the methods to ensure network decentralization.
