Efinity is a highly-scalable metaverse infrastructure parachain on Polkadot. The Efinity token (EFI) is the platform’s native utility token that facilitates the buying and selling of non-fungible tokens (NFTs) via the Efinity Marketplace, where users can access cross-chain token swaps. The platform promotes interoperability between blockchains and uses a novel token standard to allow assets to move between networks without friction. Plus, it has lower transaction fees and higher throughput than Ethereum, the leading blockchain for NFTs and Web3 game development.
Efinity aims to make it easy for developers and businesses to create metaverse and NFT gaming platforms by offering a suite of tools and features that makes Web3 gaming more accessible. It harnesses the power of the Polkadot Relay Chain and benefits from many of the industry-leading technologies developed by Enjin.
In this article, we’ll dive deep into the Efinity network. We’ll discuss the network’s architecture and what makes it different from other blockchains. Also, we’ll explore the native Efinity token (EFI) and its various use cases. Plus, we’ll look at the Efinity token ecosystem, Paratokens, and the relationship between Efinity, Polkadot, and Enjin.
What is Efinity?
Efinity is a developer-friendly Polkadot parachain developed in conjunction with Enjin. The platform aims to streamline the creation, sale, and purchase of non-fungible tokens (NFTs) and provides infrastructure for metaverse gaming platforms. It develops incentive mechanisms to encourage NFT adoption and addresses several inefficiencies associated with legacy blockchains that create a barrier to entry for Web3. Efinity is striving to become the go-to platform for NFT development by creating a low-cost, unified ecosystem around NFTs.
Building and deploying smart contracts on Ethereum can be costly. During times of network congestion, gas fees soar, and transaction speeds become slower. Though the Ethereum 2.0 upgrade aims to address these issues, Efinity was designed specifically to meet the needs of the NFT industry. The platform removes many of the frictions associated with tokenization and creating digital collectibles on the blockchain, such as high gas fees and low interoperability. Plus, the network’s architecture is optimized for asset creation and NFT marketplace interactions.
Most NFTs are chain-specific and lack interoperability. Efinity supports multiple token standards from various blockchain networks, which strengthens the NFT market. Moreover, the project aims to remove the barriers to multi-chain asset creation by providing a highly-interoperable platform tailored to meet the needs of NFT creators and collectors.
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Efinity Network Architecture
Taking a look under the hood of the Efinity parachain gives us an insight into the project’s inherent interoperability. The project incorporates the robust security of the Polkadot Relay Chain and some of Enjin’s acclaimed Web3 technologies to produce a purpose-built network for metaverse gaming and NFTs.
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Polkadot
Efinity is a parachain of the Polkadot blockchain network. Polkadot uses a multi-chain architecture which includes the Relay Chain at its core. The Relay Chain connects various parachains throughout the Polkadot ecosystem and provides computing resources that verify transactions. Parachains are sovereign blockchains that connect to the Relay Chain and benefit from its security.
Furthermore, Polkadot facilitates interoperability by connecting various blockchains and protocols throughout the Web3 landscape. Efinity uses the Polkadot Relay Chain for consensus and security but otherwise has an independent structure and token model to Polkadot and the DOT token. Transactions on the Efinity network are verified by collator nodes who receive Efinity token (EFI) rewards for their participation. However, validators on the Polkadot Relay Chain secure the Efinity parachain.
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Enjin
Enjin is an NFT and Web3 gaming project. It creates solutions for developers, businesses, and individuals to help them make the most of the metaverse and NFT landscape. The project builds tools and resources for NFT development and metaverse integrations. Also, Enjin is working with Polkadot to create the new “Paratoken” standard for Polkadot tokens. Paratokens are customizable and interoperable with the entire Polkadot ecosystem. With interoperability at the heart of its operations, the Efinity network also boasts a cross-chain bridge that allows users to seamlessly swap assets between Ethereum and Enjin.
Furthermore, Enjin is home to a thriving ecosystem of products and services that anyone can use to gain access to Web3. The platform has a string of high-profile partnerships with major global brands, including Microsoft, BMW, and Samsung. Also, the native ENJ token was the first Web3 gaming token to be approved by Japanese financial regulators.
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The Efinity Token (EFI)
The Efinity token (EFI) is the native Paratoken of the Efinity ecosystem. It plays an essential role in rewarding the decentralized network of nodes that verifies each transaction. The EFI token is also crucial for protocol governance. Holders of the EFI token can vote on proposals to make changes to the platform and the parameters of the underlying protocol. Furthermore, the Efinity Community Pool provides EFI token grants to developers.
The EFI token is the primary medium of exchange for token sales throughout the Efinity ecosystem and in the Efinity Marketplace. Every token swap or trade that occurs on Efinity is subject to a fee of around 2.5%. However, fees vary when interacting with the Efinity token bridge and smart contracts via the Efinity Marketplace, as third-party app developers can customize their fee structures. A 15% allocation of all transaction fees on the network goes to collators for their efforts in processing EFI token transactions and maintaining the network.
At the time of writing, the EFI token is trading at around $0.09 with a market cap of $50.7 million, according to CoinGecko.
Collators and Nominators
Collator nodes process and verify transactions on Efinity while harnessing the security of the Polkadot Relay Chain. They earn a portion of transaction fees in return for their contribution to the network. Efinity token (EFI) holders who participate in governance can nominate collators to participate in transaction verification by staking up ENJ, creating competition among collators to perform well.
A minimum of 10 collator nodes are required to share a copy of the Efinity ledger and state. Each collator node nominated for transaction verification receives the same rate of transaction fees as other collator nodes. To become a collator, participants must lock up the ENJ token. Fees are derived from the Efinity Collator Pool, with only active collators and nominators receiving fees.
Marketplace
The Marketplace boasts various features that allow third-party developers to build and launch cross-chain decentralized applications (dapps). The diverse tool suite makes it easy for users to create and fill various token orders. Plus, it enables the exchange of NFTs between dapps across multiple networks.
The Efinity Marketplace uses bid and ask orders for token exchanges. Buyers can place a bid order on a specific token, while sellers can place ask orders that link tokens to their wallets until orders are filled. Unlike many marketplaces, assets don’t require listings on the Efinity Marketplace. Instead, sellers are incentivized to allow assets to achieve price discovery to get the highest bids. The highest bids that go unfilled on the Marketplace entitle users to a portion of transaction fees via the Price Discovery Pool.
Token Minting
Efinity uses Enjin’s token infusion model for token minting. Token infusion allows NFTs to be “infused” with ENJ and aims to increase investor confidence. NFT owners can “melt” their tokens to increase scarcity. ENJ infusion also helps to authenticate NFTs and locks value within them. Efinity’s token minting model also uses bonding curves to increase fees each time an NFT is minted, making digital collectibles more valuable as they increase in popularity.
Efinity Token Transactions
Multiple transaction types exist on Efinity. Simple transactions require a single signature. However, multiple parties can participate in complex trades using multiple signatures. Users can also delegate transaction fees so that the sender or receiver pays for token transfers.
The Efinity network uses Discreet Accounts alongisde regular wallet addresses. Discreet Accounts are unique, configurable wallet addresses with no private keys. Users can customize permissions and roles associated with Discreet Accounts and select wallet addresses that can sign transactions on their behalf. Also, Fuel Tanks are a version of Discreet Accounts specifically designed for transaction fee payments. Fuel Tanks allow developers to pay NFT minting costs and pass the savings on to users by locking up EFI tokens. Furthermore, Efinity uses off-chain “recipes” to allow users to alter tokens for use in various gaming scenarios.
Why Efinity?
Currently, Ethereum is the number-one blockchain for NFTs and smart contracts. However, high gas fees and slow transaction speeds are prompting many NFT creators to look for other blockchain networks to release their work. Efinity is estimated to have a transaction throughput of up to 1,000 transactions per second (TPS). On the other hand, Ethereum has a throughput of around 15 TPS. Also, transactions on Ethereum can take several minutes to process. Efinity addresses this by facilitating transaction times of around six seconds, making it considerably faster than the leading competitor.
While Ethereum 2.0 allows the number-one smart contract blockchain to scale more efficiently, Efinity was built with scalability in mind from day one. Network congestion and high gas fees need to be minimized for NFTs and metaverse gaming platforms to achieve mainstream adoption. Efinity addresses this issue by optimizing user experiences and creating a stable platform for developers and creators to build on regardless of market conditions.
Developers can create smart contracts on Efinity using the Rust programming language. Furthermore, Efinity smart contracts are interoperable with the entire Polkadot and Kusama ecosystems. Thanks to the use of Direct Cross-Chain Message Passing (XCMP), Efinity Paratokens are also interoperable with Polkadot and Kusama.
Interoperability helps to strengthen the Web3 ecosystem by allowing liquidity to flow more easily between chains. Strong liquidity creates stable markets, which in turn helps to attract more liquidity. This positive feedback loop creates an attractive environment for anyone looking to enter the NFT space or anyone inhibited by Ethereum’s limitations.
Exploring Efinity and the Efinity Token (EFI) - Summary
Efinity is a parachain on Polkadot powered by Enjin’s Web3 technology. It aims to promote NFT and metaverse adoption among businesses and individuals. Also, it lowers the barrier to entry for NFT collectors and creators. Efinity provides a highly-scalable platform by offering competitive transaction fees and fast confirmation times.
Thanks to the novel Paratoken standard, Efinity is highly interoperable with Polkadot and Enjin. It will also be interoperable with Ethereum thanks to the cross-chain bridge, which is still under development Paratokens will be backwards-compatible with Ethereum. Plus, Etheruem will support several Efinity features. By breaking down the barriers between chains in this way, the Efinity team hopes to encourage NFT and metaverse adoption and allow tokens to flow freely between multiple chains.
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