Aelf is a smart contract protocol with features designed to address performance, scalability and governance structure issues.
Aelf aims to solve three perceived problems with current blockchain systems: transaction capacity constraints, which inhibit the development of enterprise-level dApps; large consumption of electricity for Proof of Work (PoW) systems, which is considered economically unsustainable; and lack of governance (voting) structure, which facilitates critical code updates. Aelf finished its initial fundraising with the backing by 22 venture capital firms, with notable names including FBG, Signum, and Galaxy Digital. Aelf did not conduct a public sale but rather raised all of its funding from VCs in exchange for 25% of the token supply.
To improve Aelf’s speed, Aelf uses the mainchain for indexing while executing smart contracts on sidechains. Each sidechain can only execute one contract type, making the whole ecosystem faster. In addition, rather than nodes being singular devices, Aelf uses clusters of computers as nodes, thereby making Aelf a network of cloud computing subnetworks. Examples of Aelf smart contracts include KYC, cryptocurrency, DEX, and asset ownership. The intended users of the platform include enterprises and application developers that demand faster transactions per second (TPS) architecture for dApps, as current systems cannot support the necessary demand. Sidechains interact with one another using the mainchain’s indexed data. To ensure the system is resource-efficient, Aelf uses a Delegated Proof of Stake (DPoS) consensus mechanism. There will be 17 delegates in the first year to form consensus and increase at two per year. The target block time is 20 to 60 seconds on the mainchain and 20 seconds on the sidechains. Aelf uses Microsoft’s .Net language, and its smart contracts are not Turing-complete—this enables parallel processing. Governance is addressed in the form of voting, with token holders needing to lock their tokens in a long-term escrow to participate in deciding the protocol’s direction. As of April 2020, however, Aelf has still not launched its mainnet.
The ELF token is used to pay for transactions in the network. When a sidechain is created, the protocol transfers over ELF tokens to the sidechain, and a percentage of fees are paid to mainchain miners for indexing. It is unclear what portion of fees are paid to mainchain miners. When a sidechain starts taxing the main chain with a high TPS load, which leads to higher dollar costs, miners of the mainchain have the authority to cut it. The tokens that are transferred to the sidechain are returned to mainchain and sidechain can choose to become its own Aelf chain. Beyond this, ELF also has a role in governance, whereby holders can elect nodes and vote on protocol changes while ELF also functions as the compensation token for node operators. Aside from the ELF token, Aelf also supports two other categories of tokens, namely: resource tokens, that are required for consuming network resources such as RAM or CPU, and developer tokens that allow developers to create secondary tokens, akin to ERC20 tokens on Ethereum.