Moonbeam for Dummies: A Simple Guide to the Ethereum-Compatible Parachain
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The Multichain blockchain could replace the centralized system only when the interoperability problem is solved. Interoperability is a critical problem for the mass adoption of the blockchain network. Interoperability (inter-blockchain communication) is essential for blockchain integration.
If blockchain technology is not updated, there will be a disconnect from real-world applications.
One parachain that attempts to solve the interoperability challenge and also provide a series of benefits for developers to build their applications more efficiently than ever before is Moonbeam. It is the most active parachain on the Polkadot network handling an average of 30,000 daily transactions and 1.2 million unique wallet addresses. Moreover, Moonbeam is the first Ethereum Virtual Machine (EVM) - compatible Layer-1 blockchain in the Polkadot network.
Moonbeam solves the interoperability problem of the blockchain through its XCM (Cross-chain messaging standard). Thus, cross-chain connected contracts help Moonbeam to connect with numerous blockchains by providing a single application user experience.
Moonbeam works with its canary network known as Moonriver, a testnet that further helps developers.
The below article will help to understand more about Moonbeam, in what areas it can be helpful to build projects, and how Moonbeam is useful for developers, users, and builders by solving interoperability problems with the cross-chain solution -
What is Moonbeam?
The Moonbeam, a cross-chain platform, made an appearance in the Crypto Industry in January 2020.
The founder of Moonbeam - Jerek Yoo, received a grant for the Moonbeam network from the Web3 Foundation in July 2020. Moonbeam network could launch its Testnet in September 2020 with the support of a grant and vote from the Web3 Foundation.
Further, the Moonbeam network secured a Polkadot parachain slot in November 2021.
The Moonbeam network could go live officially on the Polkadot platform on 11th January 2022 because of the 2,00,000 Moonbeam supporters who pushed Moonbeam into the parachain slot by delegating over a billion dollars of DOT tokens.
Why did Moonbeam fight for Polkadot Parachain Slot?
Polkadot is mainly referred to as the blockchain of blockchains. Polkadot is a Layer-0 blockchain which supports Layer-1 blockchains through its parachains.
Parachains are connected to a single chain called the Relay Chain. All parachains, including the Moonbeam network, run parallel to the Relay Chain and link with the other parachains.
Every parachains maintains its sovereignty over its network and benefits from the Polkadot cross-chain interoperability and shared security. Moreover, Polkadot parachains can exchange data like smart contracts, tokens, credentials, etc.
Thus, the Moonbeam network can help alongside and collaborate with Layer-1 blockchains by benefiting them for a much broader and diverse community.
Connection of Glimmer (GLMR) with Moonbeam -
Glimmer (GLMR) is the native token of the Moonbeam network.
Glimmer (GLMR) serves some essential functions for the Moonbeam network, such as -
The smart contracts of the Moonbeam network are powered by Glimmer (GLMR), which provides security for the network, works as a utility token for Moonbeam operations, and enables Decentralized Applications (DApps) performance.
How is the Moonriver connected with the Moonbeam?
The canary network of the Moonbeam network is Moonriver. Also, Moonriver is an Ethereum Virtual Machine (EVM) compatible smart contract where developers test new code before shipping it to the Moonbeam network.
Moonriver launched its parachain slot on Kusama on 26th August 2021.
Kusama is a canary network of Polkadot. The creation of Moonriver was 1.28 lakhs, and facilitated transactions were 2.5 billion in the next six weeks.
MOVR token of Moonriver -
MOVR is a highly functional multi-utility token of Moonriver. The roles and responsibilities of the MOVR token are the same as the Glimmer (GLMR) token. Moreover, the MOVR token also supports the Moonriver with gas metering required for smart contracts. The MOVR token also plays a critical role in facilitating on-chain governance rights, paying network fees, and rewarding participants for their honest behaviours.
The tokenomics of the MOVR token structure work the same as the GLMR token for Moonbeam. Three million MOVR tokens were reserved by Moonbeam Foundation as a part of the crowd loan initiative, and 30% were created as genesis tokens. These reserved tokens are used as rewards to crowd loan contributors. The remaining 70% of the MOVR tokens were scheduled for 48 weeks as a payout of rewards.
Moonbeam is Ethereum-Compatible -
Moonbeam provides competitive development services to developers looking to build on Ethereum or Polkadot networks. The Moonbeam network is compatible with Ethereum and Polkadot and helps with interoperability.
If any Ethereum developers want to move into Polkadot or Moonbeam networks, minimal configuration changes are required. Developers require no changes as they can redeploy their solidity-based contracts.
Moonbeam and Moonriver are compatible with Ethereum Virtual Machine (EVM) bytecodes and all Ethereum-compatible programming languages, such as Solidity and Vyper. Moonbeam also offers libraries to developers such as Etherjs, JavaScript and Web3. Moreover, the developers can enjoy Ethereum tools such as Waffle, Truffle, Metamask, and Remix.
The developers can take advantage of the pre-built integrations of Moonbeam for ERC-20 based assets, Ethereum H160 account format, and Ethereum Elliptic Curve Digital Signature Algorithm (ECDSA) signatures. The developers can even interact with their existing keys and account with the Moonbeam network.
Moonbeam provides instant access to Polkadot assets to developers, which includes Polkadot (DOT), Kusama (KSM), Glimmer (GLMR), and Moonriver (MOVR).
Moonbeam is a rapidly growing network and, thus, offers the first moving advantage to developers to deploy Decentralized Applications (DApps) on the Polkadot network. Over 100+ projects on the Moonbeam and Moonriver represent integrations and collaborations for developers and end-users.
Tokenomics of Glimmer (GLMR) tokens -
The Moonbeam network operates on the Polkadot network, and the Glimmer (GLMR) tokens aim for a 5% annual inflation rate with a maximum uncapped token supply. The 5% inflation rate on the Polkadot network pays for rewards and parachain slots. The rewards of the 5% inflation rate are further distributed in 1.5%, which goes towards funding the parachain bond reserve, 1% is paid to the collator nodes, and the remaining 2.5% goes to Glimmer (GLMR) token stakers which helps the blockchain production process.
Moreover, Moonbeam incorporates a deflationary aspect of the Glimmer (GLMR) token. While executing the smart contracts by the user or any developer on the Moonbeam network, they have to pay a computational gas fee for the request to be completed and another small fee to the platform.
The platform fee is split into two protocols - 80% of the GLMR tokens are burned, which acts as a deflationary aspect, increasing the GLMR token's scarcity as it has no capped supply. Burning the GLMR token if it exceeds the 5% annual inflation rate on the Moonbeam from transactions and fees will make the GLMR token a deflationary crypto asset.
Pending 20% of the GLMR tokens proceed towards the On-chain. On-chain governance will decide on how those funds will be spent, which includes projects bringing adoption, covering the costs of initiatives, and boosting engagements with the Moonbeam network.
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Who can benefit from Moonbeam?
1. Projects Based on Polkadot -
Moonbeam network can help Polkadot applications with the smart contract functions, adding functionalities and enhancing their services as they are unavailable through Polkadot Relay Chain.
2. Projects Based on Ethereum -
If the Ethereum applications are suffering from scalability challenges or rising costs, then they can move their elements of workloads to the Moonbeam network without any struggle. With the help of the Moonbeam network, a hybrid approach is possible, too, which means the application can simultaneously run on the Ethereum and Moonbeam networks.
3. Decentralized Application (DApp) Developers -
Developers who want to build on Polkadot can use the Moonbeam network's help, expand their reach and leverage other tools and services of the Moonbeam network.
The Users & Developers can build DeFi Projects, NFT & Gaming Projects and Projects built with the help of Cross-chain Connected Contracts on the Moonbeam network.
Moonbeam network helps with 3 areas - DeFi Ecosystem, NFT & Game Ecosystem, and Cross-chain Connected Contracts.
The details of each project are given below -
1. DeFi Ecosystem -
DeFI Ecosystem on Moonbeam would be nearly impossible if the high-quality Oracles were missing. Oracle helps developers build a healthy DeFi ecosystem and create more robust price information. Oracles help the Decentralized Exchanges (DEXs) to learn about the price of tokens data from the outside world into the blockchain. There are 6 high-quality Oracles on Moonbeam, which are Web3Go, Razor, DIA Data, Band Protocol, Banksea Finance, and Chain link.
The Bridges are required for the DeFi applications' interoperability, enabling users to move tokens from one chain to another. Without bridges, interoperability can't exist in the multichain world; thus, Moonbeam allows its community to select a bridge among 15 bridges.
The list of DeFi DApps on Moonbeam is more than 30, including Ethereum Superstars like SushiSwap.
The Moonbeam provides an opportunity for trading tokens from novice crypto enthusiasts to professional traders. The 3 of the unique Decentralized Exchanges (DEXs) of the Moonbeam are StellaSwap, Zircon, and FireFly.
Moonwell is a decentralized finance protocol open for lending and borrowing under the Moonbeam. The primary mechanism of the Moonwell provides a safety module for the users to protect their stake by the use of smart contracts. Moonwell currently holds the deepest liquidity and highest rewards compared to any other lending and borrowing protocols on Moonbeam.
2. NFT & Game Ecosystem -
1. NFT Ecosystem -
The NFT artists and collectors are targeting Moonbeam to get a better cross-chain experience.
According to the NFTScan, the top NFT project on the Moonbeam network is Groomlins, a PFP (Profile Picture) NFT-based project launched on 3rd September 2022 on the Raresama marketplace, which was further skyrocketed on 12th September 2022, reaping 1 million GLMR.
There are 3 more famous NFT marketplaces on Moonbeam are -
1. Moonbeans, one of the earliest NFT marketplaces.
2. ToFuNFT, one of the multichain NFT marketplaces.
3. NFTrade, a multichain NFT platform for NFT creation and trading.
2. Gaming Ecosystem -
According to the NFTScan, 3 gamified NFTs are quickly gaining traction -
1. Exiled Racers is a fantasy league game with a sports genre within the gaming ecosystem.
2. GLMR Jungle, a Play-To-Earn game with an NFT collection.
3. Moonfit is a wellness NFT project to balance a hectic Web3 lifestyle.
Moonbeam network can help all the blockchains through MyNFT, which serves as a gateway into Ethereum and other EVM chains and will act as a cross-chain hub for NFTs. MyNFTs include NFT Bridge and NFT marketplace for cross-chain NFTs.
With the help of XCM, a cross-chain messaging standard, it will help Moonbeam connect with the Polkadot network directly and serve as a standard for future NFT integrations. Because of those standards, NFT will become interoperable across different blockchains. The blockchains will be able to track the NFT data and ownership across all chains.
3. Cross-chain Connected Contracts -
With the help of Connected Contracts, Moonbeam is changing the next generations of Decentralized Applications (DApps) for developers and users and creating the advancement in functionalities of many blockchains.
Connected Contracts shift end users' usability to swap tokens with the functionality on any blockchain in a single application.
With Moonbeam's help, developers/users/builders can use smart contracts to communicate across blockchains through cross-chain connected contracts.
With the help of Cross-chain connected applications, Moonbeam creates a frictionless user experience through cross-chain compatibility with many blockchains. The Moonbeam provides users unified access to assets and services with its cross-chain connected applications. Moreover, Moonbeam helps developers with an excellent environment of tool support and Proof of Stake (PoS) architecture built on Substrate Framework. The developers and users no longer have to deal with a lack of liquidity, poor functionalities, and user experience.
Partner with Zeeve -
Zeeve helps with Moonbeam, which can help DeFi, NFT & gaming ecosystems with cross-chain messaging standards and connected contracts. The experts at Zeeve can help with deploying and managing blockchain nodes and networks.
Zeeve is an enterprise blockchain management platform that helps to benchmark, deploy, and manage different blockchain networks. Moreover, we provide no-code automation capabilities for the deployment of blockchain networks.
Our team can manage blockchain networks by providing a hassle-free experience for any blockchain network. Get in touch with us to deploy the nodes and manage the blockchain network.