Topics Altcoins
Bybit Learn
Bybit Learn
Intermediate
Sep 14, 2022

Moonbeam: Beaming a New Path to Multi-Chain

The Moonbeam network — Polkadot’s first fully functioning parachain — offers the perfect blend of Ethereum and Polkadot features. You can use it to develop DApps with Ethereum’s tools, and then deploy them on Moonbeam to scale them on multiple blockchains.

Since Moonbeam is Polkadot’s first fully functioning parachain, it’s caught many crypto enthusiasts’ interest. If it’s caught your attention, too, then keep reading as we explore this unique platform’s features, and discuss whether it’s a good investment for the long term.

What Is Moonbeam?

Moonbeam is a smart contract parachain on the Polkadot network that works on the delegated proof of stake (DPoS) consensus mechanism and has an Ethereum-compatible environment. Being a parachain means that Moonbeam is a Layer 1 chain linked to the Layer 0 Relay Chain of Polkadot.

Having an Ethereum-compatible environment means that Moonbeam crypto projects can work with Ethereum’s web3 API and Ethereum virtual machine (EVM). So if you want to move some of the workloads from Ethereum to Moonbeam, then you can do so with minimal changes.

Moonbeam is a Substrate-based platform, meaning that it’s based on the interoperable Substrate blockchain. As a flexible, customizable framework, Substrate allows for forkless upgrades, allowing developers to create blockchains best suited to their needs. The ability to fully customize Moonbeam allows for features like on-chain governance, EVM implementation and staking.

Moonbeam is the easiest path to multi-chain

Source: moonbeam.network

There’s a sister parachain of Moonbeam called Moonriver. It’s a canary network for Moonbeam that’s built on Kusama, which essentially makes Moonriver the testing ground for smart contracts and codes before they become live on Moonbeam, the main parachain.

Like Moonbeam, Moonriver is also Ethereum-compatible, so you can easily deploy your existing smart contracts to Moonriver to test them out. Its native token is MOVR.

Don’t Know Much About Parachains? Here’s a Quick Intro

Parachains are heterogeneous blockchains that run parallel to the Polkadot Relay Chain. They enjoy Polkadot’s scalability, security, cross-chain integrations, and connection with other parachains.

Who Can Benefit From Moonbeam?

The Moonbeam platform is for users who exist on different chains that want to link their assets from multiple chains, or for developers to build DApps that work across a multi-chain network.

It’s the ideal platform for you if you want to scale and increase the reach of your smart contracts or projects currently on the Ethereum network, at a lower cost.

You can also use it to build new ecosystem projects by utilizing Moonbeam’s smart contract functionality, or to add additional features to your Polkadot projects which aren’t available on the main Polkadot relay chain.

Because of Moonbeam’s Substrate framework, it allows you to make DApps that process complex transactions while also utilizing the Ethereum development toolchain.

What Is Glimmer Token (GLMR)?

The Glimmer token (GLMR) is the native utility token of the Moonbeam platform. The GLMR token is essential for the Moonbeam project to function as it has multiple uses.

Firstly, you need GLMR to pay for the network’s transaction fees as well as smart contract execution fees. GLMR is also used for facilitating network security by incentivizing collators who play a critical role in maintaining full nodes which ensures a decentralized node infrastructure and a vibrant ecosystem.

Finally, GLMR facilitates on-chain governance where token holders can participate and contribute their voice in network issues such as proposal referenda and electing council members.

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GLMR Tokenomics

The price of GLMR is approximately $0.5884 as of September 12, 2022. It has a market cap of around $255 million and its circulating supply is over 384 million GLMR at the time of writing.

The Moonbeam foundation launched GLMR with a supply of 1 billion, and set its annual inflation rate at 5% with an uncapped total supply.

Genesis token allocation of GLMR.

Source: moonbeam.foundation

When you spend GLMR tokens to pay transaction fees for the execution of your smart contracts, 80% of it is burned and 20% is given to the on-chain treasury, which then distributes it further. This deflationary mechanism increases the value of the native token over time.

How to Stake GLMR on Moonbeam

Before we show you how to stake GLMR, it’s important to understand how staking works on this parachain.

The Moonbeam network is maintained by selected collators who have a stake in the network. The collators accumulate the transactions on the Moonbeam network, and use them to generate new blocks. They also create the receipts or the state transition proofs for the validators on the Relay Chain (Polkadot’s central chain).

There is currently a maximum of 64 collators in the active pool, with 20% of the annual inflation distributed to the active collators as a reward.

As a DPoS mechanism, Moonbeam also incentivizes delegators, who are Moonbeam token holders, to stake GLMR tokens to vouch for a collator. A minimum bond amount of 50 GLMR is required. Only the top 300 delegators (based on the number of GLMR staked) of every collator receive staking rewards. There is no slashing penalty for either collators or delegators if collators engage in misbehavior.

Moonbeam configuration – Deployment on Polkadot

Source: docs.moonbeam.network

Quick Guide to Staking GLMR Tokens

To begin staking, go to the Moonbeam Network DApp page and link your MetaMask wallet. Note that you have to add Moonbeam as a custom network, as GLMR is not an ERC-20 token. Then:

  1. Scroll down to the Staking section and click on the Manage delegations button.
  2. Click on the Select a collator button and choose one by clicking on their wallet address.
  3. Enter the amount of GLMR, and click on the Delegate button.
  4. Confirm your transaction.
Moonbeam Network DApp page with the Manage delegations button highlighted.

Source: medium.com

Step 2 of the process, where you choose a collator to whom you’ll delegate your tokens, takes a bit of strategy. That’s because while choosing a collator with a lower bond will enable a delegator to earn more rewards, it also adds to the collator’s risk of falling out of the active pool, which means no rewards for the delegator.

Another way to ensure you maximize your earnings is by checking the collator’s past performance via the Blocks last round column. In general, if a collator has produced 0 blocks in the last round, they’re considered a poor performer.

Moonbeam Network DApp page  with the Select a collator and Delegate buttons highlighted.

Source: medium.com

GLMR Price Prediction: Should You Invest in Moonbeam Crypto?

As the first parachain on the Polkadot blockchain, the Moonbeam network has proven that multi-chain connections and cross-chain interactions can work. This is a remarkable achievement and an important step toward the mass adoption of decentralized networks.

Because it has a substrate framework, Moonbeam offers additional features on top of what the Ethereum network already provides.

Given features such as EVM implementation, scalable nature, deflationary tokens and an ecosystem of DApps, it’s obvious that Moonbeam’s platform has a lot of potential.

These are some of the reasons why several experts predict the price of GLMR will rise in the future. Price Prediction forecasts Moonbeam's price at around $6 by 2027, as the demand for the coin increases because of its utility. DigitalCoinPrice also expects a rise in Moonbeam's price, though at a relatively more modest rate, up to around $3 by 2027.

How to Buy GLMR on Bybit

There are two ways to buy GLMR on Bybit: USDT Perpetual and Spot. Here’s how to buy Spot:

Step 1: Go to the official exchange website of Bybit and create an account.

Step 2: Proceed to purchase USDT on the Buy Crypto page. Choose from the options available: One-Click Buy, Fiat Deposit, Crypto Deposit and P2P Trading.

Step 3: Once you’ve purchased your USDT, go to the Trade tab → Spot Trading and type in GLMR/USDT.

Step 4: Click on Buy on the right side of the screen to initiate trade. [Note: You can choose from four types of orders: Limit, Market, Conditional and Take Profit/Stop Loss (TP/SL) Orders.]

GLMR/USDT spot trading screen on Bybit.

Source: Bybit.com

Final Thoughts

As a Polkadot parachain with full Ethereum compatibility, the Moonbeam network has all the ingredients necessary for a successful interoperable multi-chain platform. Since it’s only been two years since its launch, time will tell if the network can attract more users and increase the value of its token.