Exploring Alephium, a Modern Sharded Blockchain Network

Alephium is a next-generation Layer 1 proof-of-work blockchain that combines scalability, energy efficiency, and smart contract capabilities for dApp and DeFi development.Its ecosystem, that is connected to both ethereum & bnb chain through bridges, offers a next-generation level DeFi experience.

The chain is sharded, which allows for scalability of up to 10,000 transactions per second (TPS) and is built on an unspent transaction output (UTXO) model known as a stateful UTXO.

Sharding is a process for increasing blockchain scalability by dividing a network into smaller portions that process transactions independently from other sharded divisions of the chain.

UTXO is a record keeping method for blockchain networks that clarifies the wallet’s remaining token balance after a transaction is made. The process functions similarly to receiving change back for a cash transaction and provides more privacy.

The account model is an alternative record keeping system to UTXO. Unlike the UTXO model, the account model tracks total account balances as a global state for a more simplistic approach to transaction record keeping.

The stateful UTXO combines the advantages of both UTXO and account models, and its design promotes flexible smart contract deployment, making dApp development straightforward for builders on the chain.

Proof-of-work chains usually consume large quantities of energy compared to proof-of-stake ones. Alephium introduces Proof of Less Work which reduces energy consumption by up to 87%, without sacrificing security or consensus efficiency.

The introduction of ASICs by manufacturers including Bitmain, Ice River, and Goldshell has resulted in an explosion of the hashrate securing the network (more than 150x from .15 PH/s to 30 PH/s in the last 6 months).

The continuous increase in Bitcoin mining difficulty has left many miners searching for new endeavors, and Alephium’s hash-rate surge presents an attractive mining opportunity.

DeFi and dApps on Alephium

While still in its infancy, Alephium’s security solutions and ease of development set the chain up to continue to scale its memecoin and DeFi ecosystem.

Alephium’s first network upgrade in March 2023 improved its virtual machine and software development kit (SDK), which led to the first DEX, Ayin, launching in Q3 2023.

For the others, most of other protocols are launched via Alephium’s first launchpad: AlphPad. AlphPad is the leading IDO (initial DEX offering) launchpad on Alephium and has processed nearly $600,000 over nine different IDOs. Recently, the AlphBanX IDO shattered the platform’s previous record by 4x, raising 300,000 ALPH compared to Elexium’s 75,000.

The chain is also home to NFT marketplaces like Alphaga & Deadrare and games like PyrePlay. Ayin just announced its new Smart Router on Nov. 20, which improves routing efficiency, allowing for better swap rates and less network congestion. Alongside the Smart Router launch, Ayin also introduced Alephium’s first Concentrated Liquidity Automated Market Maker (CLAMM), creating more options for liquidity providers on Alephium.

Elexium is the ecosystem’s largest protocol by TVL and is responsible for more than 50% of Alephium’s TVL, with over $11 million deposited in the protocol. Elexium is the chain’s leading DEX and utilizes a ve(3,3) model, which refers to (3,3) game theory to drive increased participation in governance and high yields.

Alephium is currently preparing for the launch of a decentralized lending platform, AlphBanX. In addition to lending, the platform will develop an overcollateralized stablecoin inspired by MakerDAO/Sky’s DAI token. AlphBanX is also the chain’s first ecosystem project to include venture capital investment, and upcoming projects such as Linx Labs and MinedFi have also attracted VC attention. The inclusion of VC capital in Alephium dApps potentially signifies a maturing ecosystem.

More of the Alephium ecosystem can also be explored here.

Real world meets web3

GIGATONS, a new platform aimed at achieving large-scale CO₂ reductions, has chosen Alephium as the blockchain infrastructure for its GIGA Protocol, unveiled during Abu Dhabi Finance Week.

The platform plans to mobilize and tokenize $100 billion in green investments over the next decade by integrating blockchain technology to validate carbon credits, tokenize real-world assets, and increase transparency in climate-related projects.

Alephium's scalable Proof-of-Work (PoW) blockchain was selected for its balance of security, energy efficiency, and programmability, which align with GIGATONS’ requirements for managing large-scale projects and ensuring verifiable carbon impact.

Alephium’s Growth

The chain’s total value locked (TVL) is up by more than 10x since the beginning of 2024 with $24 million in chain TVL according to DeFiLlama, plus another $26 million in the bridge. Alephium reached an all-time high of $60 million in total (chain and bridge) TVL in April 2024.

In addition to TVL growth, the chain has now up to 275,000 unique addresses, and added more than 500 new wallets per day throughout November.

Alephium’s growing TVL and activity can be partially attributed to dApp development, but the onboarding of existing ecosystems is also a contributing factor. By implementing an Ethereum bridge to Alephium, major stablecoins, including USDT and USDC, were able to be migrated to the chain. As of Nov 20, Alephium added Binance Smart Chain to its native bridge, creating another avenue for asset transfers onto the chain.

The chain’s upcoming roadmap also features a number of potential activations and upgrades, including core protocol upgrades to boost chain performance and security, DevX, which will further streamline the developer experience on Alephium, and more bridges, tools, research, and community incentives to further the possibilities for individuals on Alephium.

Alephium’s ecosystem also includes datasets for reference and a native block explorer. Alephium’s Richlist provides on-chain analysis for significant Alephium wallets and related metrics, including information such as active wallets, top holders and their balances, and general activity. Users can source token prices and native yields from Alephium’s DeFi dashboards, such as AlphPro, Mobula and DeFiLlama.

Walkthrough

The first step to starting with Alephium is setting up an Alephium-native wallet. Alephium offers desktop, mobile, and browser extension wallets. Mobile wallets are available on both IOS and Android, and Alephium also supports hardware wallets including Ledger, OneKey, Safepal, and Tangem in the pipeline.

Users can bridge BNB, USDT, or USDC onto the chain and automatically receive gas funds via the Alephium faucet when bridging onto the chain.

The Alephium Extension wallet is available on both Google Chrome and Firefox and can be added as a browser extension similar to any Ethereum or Solana wallet.

After adding the wallet to your browser, you can open it up, and create a new wallet, or import an existing wallet.

Once you setup your wallet, you can create however many accounts you desire within the browser extension. It is worth noting that in order to backup your own private keys, you must setup the account recovery feature within the wallet.

From here you can simply bridge funds from another chain or the centralized exchange of your choice, and begin interacting with the Alephium DeFi ecosystem.