What is Moonbeam Network (GLMR)?

Moonbeam Network (GLMR), is a project built on a Polkadot parachain that seeks to create a bridge that communicates and allows the direct execution of Ethereum applications within Polkadot, thanks to its compatibility with the EVM

UOne of the big blockchain projects today is Polka dots (DOT), as its goal of being a network of blockchain networks has attracted large projects, one of them being Moonbeam (GLMR).

Moonbeam Network defines itself as a project dedicated to bringing all the functionalities of Ethereum (ETH) to the Polkadot ecosystem, thanks to its powerful Substrate framework, and to the implementation on a Polkadot parachain, of a virtual machine fully compatible with the EVM of Ethereum. In this way, Ethereum developers will be able to transfer their dApps from Ethereum to Moonbeam without having to tweak their code, also having interoperability with Ethereum and other networks and dApps deployed or compatible with Polkadot.

Thanks to this, Moonbeam has become a project of great interest in the community. And very especially, for the possibilities of scalability and interoperability that it offers compared to the current Ethereum and its next Ethereum 2.0 update. But, beyond all this, what other things does Moonbeam offer us? What are its greatest technological and usage advantages? That and more, you will know below.

Brief history of Moonbeam Network

The development of the Moonbeam Network began in the year 2020, when the company PureStake, an IaaS (Infrastructure-as-a-Service) company focused on providing higher quality infrastructure and services for public blockchain networks. Its CEO, Derek Yoo, made the development of Moonbean public with the following words:

Today we announced Moonbeam, a smart contract platform that offers a scalable and affordable alternative to other platform options for developers. Moonbeam aims to provide developers with the ability to port existing Ethereum dApps or create new dApps using popular Ethereum development tools.

With those words began the development of the Moonbeam Network, a blockchain network that would use parachain capabilities and sharding of Polkadot, which were beginning to develop at the time. In this way, Moonbeam Network would be able to:

1. Be 100% compatible with Ethereum, its EVM and its dApps.
2. Offer high scalability thanks to the parachain and Polkadot sharding.
3. Reduce transaction fees on dApps, compared to Ethereum, reaching levels like those offered by Polygon or minors.
4. Offer cross-chain and cross-parachain interoperability options thanks to the use of Substrate.

The development of the project has been accelerating since then and for the December 17th 2021, the launch of Moonbeam over Polkadot would begin. The launch was planned to be carried out in three phases that are described in the following image:

Thus, the December 17 release enabled the most basic Moonbeam options, with fully centralized control over the network. The next phase was held on December 21, 2021 and began the network decentralization process. At this point, the nodes of the network began to be deployed and to check their correct communication within the Polkadot parachain. And finally, on January 11, the full launch of Moonbeam on the network took place, with its full decentralization, activation of the EVM and full operations enablement.

This entire process was made possible thanks to the enormous participation of the community (about 200 thousand people) who were able to collect more than 35 million DOT tokens to make this launch possible, a record within the crypto community.

Moonbeam has managed to take over large projects, among which we can mention BeamSwap, StellaSwap, Solarflare, ZenLink and the deployment of Curve, the well-known stablecoin DEX.

Technology behind Moonbeam

Moonbeam Network is the result of uniting several technologies and making them work in a coordinated way, to have as a result:

1. A decentralized and permissionless network.
2. Full support for the Ethereum Virtual Machine. In this way, any smart contract built for Ethereum can work on Moonbeam without major modifications.
3. Support for the Web3 RPC API, allowing the operation of existing DApps and tools on top of Moonbeam. Thanks to this you can use wallets like MetaMask to interact with dApps within the Moonbeam Network.
4. Support for Polkadot's Substrate technology and other compatible networks.
5. On-chain governance system using Glimmer tokens (GLMR), the utility token of the Moonbeam network.

Moonbeam operating structure

All this brings us to the basic operating structure of Moonbeam, which can be seen perfectly in the following diagram:

In the center of it all we have the Moonbeam Parachain, which is the parachain built with Substrate that makes the entire operation of the Moonbeam network possible. The operation of this network is made possible by the software of the nodes for Moonbeam, which makes possible the work of two important actors:

1. Collators or Collectors, who are in charge of collecting all the operations carried out in the Moonbeam parachain and verifying that they comply with the rules of operation and consensus of the parachain. Basically, the collators work as if they were the validators of a Proof of Stake network, and in fact, the consensus protocol in Moonbeam is DPoS, following the model of operation and consensus provided by Polkadot (the NPoS protocol). That being said, to be a collator on Moonbeam, it is necessary that we do delegated staking within the network and for said staking we will be receiving a small reward.
2. RPC Endpoints, these are the points that allow us to use wallets like MetaMask to interact with the Moonbeam Network. PureStake has provided the RPC network for this purpose. But, anyone who installs a Moonbeam node can create their own RPC and use it to bypass third-party RPC endpoints.

Everything that happens on the Moonbeam parachain ends up generating transactions that are validated and stored on the Polkadot network following Polkadot's consensus and operation rules. This type of structure is what ensures that Moonbeam can offer cross-chain and cross-parachain capability within Polkadot.

A powerful EVM-enabled network

Of course, in the above diagram the “Moonbeam parachain” is a huge simplification of technologies, the biggest of which is Ethereum EVM support. Moonbeam nodes are capable of deploying an EVM and reading Solidity smart contracts, just as they were running within the Ethereum network. The compatibility with Ethereum is such that Moonbeam addresses are identical to what you would have on Ethereum or any other EVM compatible network (such as Polygon).

This means that the cryptography, network addresses, and instructions available on Moonbeam are identical to those of Ethereum, allowing just copying and pasting an Ethereum contract to work exactly the same on Moonbeam. It also gives us a huge ability to interact with Web3 wallets, without having to change anything, simply by adding the Moonbeam network parameters to them, as you can see in the following image:

What level of compatibility exists?

Well, at the time of Moonbeam's release, compatibility was based on the Parity Frontier layer, one of the most advanced EVM layers to date. With this, practically all the contracts in Ethereum work without making any changes.

As for Moonbeam's test and development system, developers used to Ethereum will be in for a pleasant surprise: it is almost identical to Ethereum. From ChainID codes (to recognize testnet, private, and mainnet chains) to using tools like Polkadot.js (equivalent to web3.js), it's all Ethereum-like that will ease the transition. Even the working frameworks and IDEs (Truffle, HardHat, and so on) are all compatible with Moonbeam.

Moonbeam, consensus and staking within the network

Moonbeam Network has a fairly complex operation in its consensus and networking layer. The fact of being a parachain means that this system depends on Polkadot's network of NPoS validators to achieve the purpose within Polkadot's Relay Chain operating scheme. In addition, Moonbeam relies internally (for its collators) on a Delegated Proof of Stake (DPoS) consensus protocol, which allows it to maintain security within the parachain.

This means that every collator or collector node within Moonbeam uses DPoS to reach consensus and validate operations. Being a network with compatibility with Ethereum, the fact of using DPoS means that our operations are practically immediate. The average time of each block is about 5 seconds, and only collators or collectors can participate in the production.

The job of these nodes is to collect user transactions and produce state transition tests to be validated. Next we have the nominating nodes (nominators), whose role is to carry out the necessary staking within the system to be able to vote and endorse the work of the collectors. In other words, the nominators are the ones who carry out the process of consensus and validation of the work within Moonbeam.

Accessing the system is quite simple, you just have to enter the Moonbeam Staking system, connect with your MetaMask (you must add the network, using the data shown above) and select a collator and the amount of GLMR you want to enter the staking system, in order to receive rewards for it:

All of this works thanks to the GLMR or Glimmer token, which is Moonbeam's native token. This utility token allows its holders to access network resources and stake in it. The issuance of the token is inflationary, having an issuance of one billion tokens and counting on an inflation of at least 5% per year.

Community governance in Moonbeam

Moonbeam has been committed to becoming a highly decentralized project from the start. Part of this commitment can be seen in the creation of a decentralized governance system in which the following points must be met:

1. Any holder of GLMR tokens can participate in the governance of Moonbeam. This means that they can submit proposals and vote on them within the ecosystem.
2. The weight of the votes will be decided by their holding of these tokens, as it happens in other on-chain governance projects. That is, the more GLMR tokens you have in your possession, the greater your voting power within the community.
3. The Moonbeam Council is a group of elected people who have special voting rights within the system. Council members must propose referendums for vote and have the ability to veto public referendums. There are ongoing elections for council members, in which GLMR token holders vote for new or existing council members.
4. Finally, there is also a Treasury, which is actually a collection of funds that can be spent by submitting a proposal together with a deposit. Spending proposals must be approved by the council. Rejected proposals will cause the proposer to forfeit their deposit.

Future of Moonbeam

It is clear that Moonbeam is a great bet to take the DeFi world beyond the borders of Ethereum. If we take into account that Polkadot is an ecosystem that continues to grow day after day, and that projects like Moonbeam are the ones that mark this growth, it is clear that this network and its parachains will grow a lot in the coming years.

In that case, Moonbeam has a lot to offer and gain. Ethereum has been stuck in a network with low scalability and other projects are taking away its prominence in the DeFi ecosystem and metaverse. Proposals like Moonbeam, which allow everything that is in Ethereum to be transferred to other networks to enjoy better commissions, scalability and interoperability, become especially valuable.

Although Moonbeam is a very recent project, it is clear that its proposal is possible and many have already begun to investigate it. Curve Finance is perhaps one of the biggest projects in this sense, and if this movement is joined by others of its size, it is very clear that Moonbeam will grow incredibly in the years to come.

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