TL;DR: With a new update or project being released almost every day, it’s clear the crypto ecosystem is constantly evolving. Moonbeam has gone through a lot of ups and downs to reach the level it’s at today — but it’s just the beginning. Knowing what brought it here and why it was created will lead you to make better decisions when investing or simply using Moonbeam.
In this article, we’re gonna dive into the Moonbeam ecosystem, answer all the $GLMR related questions and even more. Prepare yourself for a history lesson and a journey to the future of Moonbeam!
What is Moonbeam (GLMR)?
Moonbeam is the most Ethereum compatible smart-contract parachain in the Polkadot ecosystem. It allows developers to port their projects with minimal to no code changes, enabling them to tap into the Polkadot ecosystem and all its assets.
Before explaining how Moonbeam achieves interoperability, let’s have a look at how Polkadot does it. The Polkadot network is made of two components: the Relay Chain and parachains. The Relay Chain has deliberately minimal functionality — for instance, smart contracts are not supported. Its main responsibility is to coordinate the system as a whole, including parachains.
With this design, Polkadot achieves interoperability within its own ecosystem, as parachains are able to exchange data between them quickly, without compromising on security. The goal of Moonbeam is to onboard Ethereum dapps and assets to the Polkadot ecosystem.
What stops Dapps from achieving interoperability with other blockchains in the first place? For starters, each blockchain uses its own VM (Virtual Machine) and consensus mechanism. Implementations vary based on the founder’s philosophy regrading how a blockchain should operate.
Virtual Machines are essentially mini-computer programs that run inside your computer. If we extend the definition to blockchains, VMs are mini-dapps that run smart contracts. To dig a little deeper, blockchain VMs are built using specific programming languages. For example, Polkadot dapps are created using Substrate, while Ethereum was written in Solidity.
In order for a dapp to run on a different blockchain, developers would have to rewrite the code of the dapp in that blockchain’s specific language. This is often a daunting task as it requires a ton of effort and its implementation could lead to security vulnerabilities. To overcome this obstacle, Moonbeam aims to provide a low-friction and secure environment for the development, testing, and execution of smart contracts that is compatible with Ethereum.
The consensus mechanism that Moonbeam uses is a flavor of PoS called Nominated Proof-of-Stake (NPoS), also known as Delegated Proof-of-Stake (DPoS). Proof of Stake means that Moonbeam gets its security from validators that stake $GLMR to secure the chain. This is different from Proof of Work blockchains, where miners replace the role of validators.
Moonbeam is a parachain running on Polkadot, which makes it different from a standard Layer-1 blockchain. In Polkadot, there are collators and validators. Collators are in charge of collecting transactions from users and sending them to the Relay Chain validators. The collators are selected based on the stake they have in the network. For finality, Polkadot relies on GRANDPA validators.
The concept of blockchains is not new, and Moonbeam is one of many such networks. The idea started in 2008 with the release of Satoshi Nakamoto’s Bitcoin Whitepaper. This kicked off the subsequent creation of many different types of networks under the same “blockchain” terminology.
Despite being similar in concept blockchains have all different architectures and use cases. What all have in common — including Moonbeam — is that they have to be secure. Security is the ability of a blockchain to prevent attacks and penalize malicious actors. This is usually done through their consensus algorithm and the mechanism they use to reach finality. Finality is achieved when a block has been created and is now immutable, meaning that nobody can change the date inside.
Over time many different mechanism have been designed, ranging from Proof of Work, Proof of Stake to novel ones called Proof of Spacetime. Each one hopes to achieve the best way of securing the network they are built for. As noted before, Moonbeam makes use of type of consensus mechanism we call “Delegated Proof-of-Stake” — or DPoS for short.
Moonbeam is based on the same EVM architecture created by and used in Ethereum. While similar to Ethereum, it implements a some new improvements to the protocol.
The first one is creating a Substrate compatibility layer that allows developers to run unmodified Ethereum dapps. This offers the ability for parachains to integrate Ethereum-native smart contracts.
The second one is XC-20, a new type of interoperable token that respects Ethereum’s ERC-20 standard but is also a Substrate-native asset. The XC-20 standard allows Substrate tokens such as DOT or other parachains’ assets to make their way to Moonbeam EVM environment. They then become regular ERC-20 tokens, allowing them to be used in DeFi or other applications. This is possible through a special mechanism that translates EVM code to Rust.
Moonbeam is powered by the GLMR token, a central part of the Moonbeam ecosystem. GLMR is an inflationary token due to the way its tokenomics have been planned. The Moonbeam inflation rate sits currently at around 5%, with approximately 1% going towards incentivizing collators.
A small percentage of 1.5% goes towards the parachain bond reserve to pay for a parachain slot in perpetuity. The remaining roughly 2.5% is for users that stake their GLMR tokens and helps power the collator selection process.
Moonbeam has no maximum amount of tokens that can be created. Since the project launched, the total supply is 1,044,619,864 $GLMR. A portion of these tokens will go to the parachain crowdloan participants. About 16% of the supply has also been reserved for a future public sale, while the rest is split between founders & project (41%), and investors (41%).
For more details about how you can earn more Moonbeam by running a validator node at home check out our Moonbeam Mining & Staking guide. It includes the exact steps and best methods of earning more crypto like $GLMR in 2024 and beyond.
When was Moonbeam (GLMR) created?
Moonbeam (GLMR) was created after Derek Yoo and his company, PureStake, decided to become a validator on Kusama. Work began on the Moonbeam chain in 2020, but before that, a couple of important events happened. Most events revolve around the Moonbeam CEO and Founder, Derek Yoo.
The first meaningful event is Derek Yoo’s decision to start a Web3 infrastructure company.
Founded in 2019, PureStake originally focused on infrastructure services for next generation proof of stake blockchains. Derek believed that with the emergence of crypto, there is no going back from blockchains taking over all industries. So he wanted to be among the pioneers that would lead the change forward.
Using blockchains to move value in an open, low friction, low-cost way can have an impact as the internet has had in making information open, low friction and low-cost. Using his previous experience in running cloud infrastructure systems, Derek made the decision to focus on Proof of Stake blockchains instead of Proof of Work chains like Bitcoin. His thesis was that PoS network are more scalable, more efficient, and ultimately more secure than PoW chains.
The more he studied crypto, the more it became clear to him that the blockchain space is moving towards multi-chain specialization and interoperability, which turned his attention towards the Polkadot ecosystem.
Polkadot is a protocol that connects blockchains. It has a core component called “Relay Chain," and many other user-created parachains. The third piece is a bridge that connects to all other blockchains like Bitcoin, Ethereum and many others. Due to its design, Polkadot allows for networks to be interoperable with each other. Blockchains are no longer separated by their smart programming language and consensus. Instead, they are able to communicate and transfer value with low friction.
Soon after PureStake was created, they offered their staking services on the Polkadot network. Besides the vision of Polkadot, PureStake chose Polkadot for a technical and economic reasons.
From the technical perspective, Polkadot has a more secure design than most blockchains. The shared validator security model in Polkadot provides security-as-a-service for all of the parachains. This would speed up the adoption of the network, as parachains can focus entirely on delivering a good product.
From the economic standpoint, Polkadot and its sister network Kusama were preparing for the mainnet. With their experience, PureStake could establish themselves as the leading infrastructure provider on Polkadot.
Another meaningful event was the decision for PureStake to launch its own product on the Polkadot network.
After one year of being a validator on the Kusama network, PureStake had engaged with the community, the technology, and the emerging ecosystem of tools and services. During this evolution of PureStake’s engagement with Polkadot, they realized that an accessible smart contract parachain would fill a strategic need within the Polkadot ecosystem. This is how Moonbeam and the Snow family of consensus protocols was born.
What the Moonbeam team created can be categorized as an Ethereum-compatible blockchain environment. This means that the smart contracts that power Ethereum Dapps will not need to be rewritten or reconfigured for the Polkadot network.
Until that point, dapps were separated by the different architecture and consensus on the blockchain they were deployed. An important difference is that Polkadot-native dapps are built using Substrate, while Ethereum dapps are built using Solidity.
To solve this problem, Derek Yoo and his team created an EVM implementation that allows Ethereum-based smart contracts to be migrated to the Polkadot environment. In addition to smart contracts, Moonbeam planned to move an array of tools to create interoperable apps. These include popular tools such as Hardhat, Truffle, Metamask, and Waffle.
To add more value to the idea, Moonbeam has created a suite of integration paths from Moonbeam to Ethereum. We commonly call them bridges. Their role is to lock assets on one network while transferring the equivalent on the other network.
The first path is their ChainBridge implementation which connects both Moonriver and Moonbeam to Ethereum mainnet. The second path is via integration networks, where Moonbeam is working on integrations with other protocols to provide access to Ethereum-based assets. The third path is a Polkadot-native integration with the Snowfork parachain bridge to Ethereum.
After validating their idea, Derek Yoo together with the team at Moonbeam began building today’s Moonbeam blockchain and codebase. Moonbeam planned to become a parachain on the Polkadot network. But first, they needed to test their idea on Polkadot’s testing ground, called Kusama. PureStake deployed an equivalent version on the Kusama network, Moonriver.
Nicknamed “Polkadot’s crazy cousin," Kusama is an experimental network. This is different from a testnet where assets have no value other than testing the app. Kusama is fully fledged network with real tokens. Its role is to serve as an innovation ground for projects looking to apply for a Polkadot parachain.
Like all other parachains on Kusama, Moonriver launched its own token called $MOVR. In order to fund the Moonriver parachain slot on Kusama, the Moonbeam Foundation ran a crowdloan campaign on behalf of the network.
The $MOVR token was sold only through a crowdloan which brought in $5.4 million worth of funds to secure a parachain slot on Kusama. Such a huge investment has allowed Moonbeam to continue building the vision of interoperable EVM compatible smart contracts.
Who created Moonbeam (GLMR)?
Moonbeam was created by Derek Yoo together with Stefan Mehlhorn as the next product of PureStake. Both of them work on the underlying protocol that powers Moonbeam along with the rest of the Moonbeam Foundation members.
Derek Yoo is an entrepreneur born in the United States. He founded PureStake and now serves as the CEO of Moonbeam. Derek studied at the University of Pennsylvania between 1993 and 1997, where he graduated with a bachelor’s degree in philosophy.
Derek Yoo started his career working as a product manager at Texcel, a company specialized in industrial hose and fitting, hydraulics, and fluid sealing products. After one year and four months, he then moved to work at Webyes, an early Web hosting and application service provider.
Just seven months into his new job, the company was acquired by Breakaway Solutions, and Derek continued to work there as a systems engineer manager. During his 2 years at Breakaway Solutions, Derek learned to interact with complex hosting infrastructure, working with multi-data center shared hosting architectures. He had also learned how to set up monitoring and backup systems, and testing for scalability.
Derek then moved to BladeLogic where he started learning about data center automation solutions for enterprises. The company offered infrastructure services for clients like Time Warner, Microsoft, and Walmart, among others. Derek spent 3 years and 7 months working at BladeLogic before receiving a bigger offer at another company.
One of his most important projects was with Fuze, a cloud based unified communications platform. Derek was offered the CTO position and worked for the company for almost 14 years. Over the course of 20 years, Derek has gained a deep understanding of how infrastructure and cloud services work, the challenges of scaling, and how to manage big teams of engineers.
His first contact with crypto happened naturally as he worked in the tech sector. The Bitcoin mining industry was blossoming, and Derek saw the opportunity to apply his skills in the direction of crypto. On May 30, 2019, he founded PureStake, an infrastructure service for Proof of Stake blockchains. He saw what most people in his industry couldn’t comprehend — blockchains becoming the central infrastructure of the internet.
The size of the opportunity was too big to ignore, so he gathered a team of engineers and started building the staking infrastructure. Derek Yoo created PureStake with help from Stefan Mehlhorn. Stefan Mehlhorn now serves as the COO of PureStake and Moonbeam.
Stefan Mehlhorn studied at the University of Munich where he graduated with a degree in business administration and management. Later, he completed his master’s degree in computer science & electronic engineer at the University of Chemnitz, in Germany.
Stefan Mehlhorn has a vast experience working in enterprises such as Loop Pay, Samsung Pay, and Fuze. Stefan had met Derek at Fuze. Despite his departure from the company after one year, the two met again after 5 years to build PureStake.
PureStake first started offering its staking infrastructure for Algorand. After a few months, they’ve started offering their services on Polkadot, and things changed for good. Polkadot shared the same “multi-chain” vision as the founders. Moreover, Polkadot was the only project that could support chains with different use cases, all sharing the security from Polkadot’s Relay Chain.
Moonbeam was born out Polkadot’s need to have an interoperability environment to accommodate dapps from other chains. The “multi-chain” thesis was going on for a while, and the industry was slowly shifting towards building interoperability platforms. Moonbeam had the chance to be the first to do so on Polkadot.
The challenge was that Polkadot is based on Substrate, while Ethereum is built using Solidity. To solve this problem, Derek Yoo and Stefan Mehlhorn agreed to join forces with Parity, the development company behind Parity, and work together on building Substrate Ethereum support.
The proof of concept for Moonbeam offered a series of functionalities that facilitate interaction of Ethereum Dapps to Polkadot chain. They range from basic ERC20 transactions on MetaMask to the more complex smart contract deployments.
The roadmap for Moonbeam would include: smart contracts that work natively with other Polkadot chains, Web3 and EVM support, and compatibility with Ethereum development tools.
A few months into the development, Moonbeam received a $1.4 million grant from the Web3 Foundation to pursue their idea. With fresh funding, Derek Yoo and Stefan Mehlhorn went on to expand their team and ramp up the development efforts.
Like any successful blockchain network, it was essential that Moonbeam amassed a strong community of validators that could maintain the network.
Other early collaborators were Alan Sapède, who works as the VP of Blockchain Engineering at PureStake, and Telmo Michelena, who currently works as a Senior Software Engineer at the same company.
How is the Moonbeam (GLMR) token used?
The Glimmer token is the native token for the Moonbeam network. Its equivalent on the Kusama network is named Moonriver (MOVR). Both tokens have the same utility within the blockchain they belong to.
Most assets in the Moonbeam ecosystem are denominated in GLMR, which makes it the default unit of account. GLMR is the fuel that powers transactions and block creation on the Moonbeam chain. We sometimes refer to it as “gas”. Its primary use case is securing the network and keeping actors aligned to the same principles.
Making a transaction on the Moonbeam network requires a small fee in GLMR, usually between $0.01 and $0.05. Because Moonbeam has a quick time to finality and processes more transactions per second the gas fees quickly add up. This small fee goes to the collators for securing the network. Fees on Moonbeam are handled in two ways: 80% of the spent fees are burned, which acts as a deflationary force and 20% of the spent fees go to the protocol treasury.
In addition, $GLMR supports the gas metering of smart contract execution. Developers pay a stable fee in order to run their smart contracts on Moonbeam network.
Besides its use case as a gas token, GLMR also has utility as a governance token. The governance access is open to all users. Issuing a proposal costs 400 GLMR which can be paid entirely by the proposer, or it can be delegated to him by smaller holders. The minimum stake to issue a proposal on Moonriver is 4 MOVR.
Moonbeam is currently listed on multiple exchanges. The major ones are Binance, Coinbase and Kraken. If you want to skip ahead and learn how to earn more Moonbeam by running a validator node at home check out our Moonbeam Mining & Staking guide. It includes the exact steps and best methods of earning more crypto like $GLMR in 2022 and beyond.
Who is developing Moonbeam (GLMR) now?
Development on Moonbeam started in 2020 by a team who later spun out into Moonbeam Foundation.
After validating their idea, Derek Yoo and his team established Moonbeam Foundation as a for-profit company with their headquarters in Palo Alto, California. Founded in 2021, Moonbeam Foundation handles the development of the Moonbeam (GLMR) parachain and protocol. Besides handling the development of the core protocol, it is also tasked with promoting the development, growth, and adoption of Moonbeam and its ecosystem.
The main developer behind Moonbeam is PureStake, a Web3 infrastructure company founded by Derek Yoo. PureStake has developed into a multilateral company that offers infrastructure-as-a-service and is also an important validator on Polkadot. With an experience of 20+ years in managing Web2 infrastructure, PureStake brought the same level of professionalism when building Moonbeam.
Parts of the codebase were written by external developers, making open source contributors an important part of Moonbeam’s success. One of the biggest contributors was Parity Technologies, the development team behind Polkadot.
Open sources contributors can access the protocol’s code on GitHub from day 1. Currently, their GitHub lists 50+ core contributors and more than 230 code forks. Developers are free to share and change all versions of the protocol, and even monetize on the newly created protocol forks.
Like any successful blockchain network, it was essential that Moonbeam amasses a strong community of collators that could maintain the network. To attract collators and builders, Moonbeam Foundation started offering grants. The initial sponsorship budget ranges from $50K (Level One grants) up to $150K (Level Two grants).
Level One & Two grants are reviewed by a Community Grants Committee, consisting of 5 individuals who are charged with screening the project. The Committee consists of two members from the Moonbeam Foundation and three community members outside the Foundation.
There is also a Level Three grants offering $150K up to $3 million, where both the Community Grants Committee and the broader community have to vote.
To incentivize collators, Moonbeam Foundation established the Moonbeam Orbiter Program. As demand for collator slots has increased, the Orbiters program allows collators with fewer resources to stay competitive and continue to participate in a collator pool. This program aims to reduce stress on collators and share rewards among a larger community of independent collators by implementing a regular rotation in validating the network.
Besides offering funding, Moonbeam Foundation is looking to help startups with additional resources in the form of educational programs. If you are interested to become a contributor to the protocol, you can participate in the Moonbuilder Academy, where you will learn how to build multi-chain applications on Moonbeam and Moonriver.
Governance of the Moonbeam protocol is done on-chain. This means token holders have a say in the direction of the protocol via proposals. Votes are weighted by the time and amount of GLMR users are willing to stake.
Moonbeam has a Governance apparatus made out of two components: the Treasury Council and the Current Grants Committee.
The Treasury Council is composed of five community-nominated and approved community members whose responsibility is to control treasury spending. The Community Treasury Council consists of two members from the Moonbeam Foundation and three community members who are outside the Foundation. The Treasury Council members provide feedback to the Draft Treasury Proposal in the Community Forum.
The Current Grants Committee has an identical structure. And all its members, like with the Treasury Council, have been appointed. So far, the Current Grants Committee community has proposed two projects for the Lever Three grants, Moonwell and StellaSwap. The proposals were discussed by the global community and followed by a highly participated voting period with over 1,000 votes.
Parameters related to the protocol functionality are hardcoded and only the core team can change them. This is because PureStake along with Parity have the most expertise. Their Governance documents mention a Technical Committee which has special voting rights.
What are the latest updates on Moonbeam (GLMR)?
Moonbeam in 2020
2020 is Moonbeam’s launch year. On April 27, PureStake had announced their plans to build a smart contracts platform that will provide Ethereum compatibility to Polkadot-native dapps.
After a year of running as a validator on the Polkadot network, PureStake had build relationships with the wider Polkadot community and was ready to make preparations for the launch. They already had a strong infrastructure in place, so the next step was to build the product.
Moonbeam had released the initial implementation and made the code open-source for the public to check. Their efforts were joined by Parity, the development company behind Polkadot. The teams decided that bringing smart contracts was paramount to the adoption of the network, so they decided to share the same repo, called Frontier.
One of their first experiments was to implement Ethereum RPCs under Frontier. Web3 RPCs will allow Ethereum developer tools such as Truffle, Remix, and MetaMask to connect directly to a Moonbeam node.
By running a Frontier node, Moonbeam tested ERC20 contract mints on the Substrate framework. The test revealed how Moonbeam was to be able to see and send Ethereum assets using Substrate. Using Substrate-based RPCs to interact directly with the EVM was not something that will be part of the final product, as it was bypassing security layers. This was more of an effort to demonstrate the power of Substrate to quickly get to a running system.
Initially, Moonbeam had applied for a grant from the Web3 Foundation. The team requested 2.5 BTC in funding to deliver a series of demonstrations. With fresh funding, the team went on to provide the documentation, and show how Polkadot-Ethereum compatibility would look like.
The team showed an experiment in which a user could use MetaMask to send transactions from Ethereum to Polkadot. They’ve also implemented an RPC that allows developers to run Ethereum-native tools like Truffle, Remix, and MetaMask on Moonbeam’s network, which is based on Substrate.
The development activity on Moonbeam started to pick up, as the Moonbeam worked methodically to deliver each of the demonstrations. Their efforts had been rewarded with a $1.4 seed financing from Polkadot-native investment fund Hypersphere, among others. Funds would be allocated towards hiring new engineers and bootstrapping Moonbeam’s marketing.
In addition to investors, PureStake was also engaged in talks with other projects: both existing Ethereum-based projects, and startups that are building in the Polkadot ecosystem. One of their initial partnerships was with Bet Protocol and Linear Finance, both of which will build on the Moonbeam network.
Towards the end of the year, PureStake announced the release of Moonbase Alpha v4, which added the ability to subscribe to Ethereum smart contracts events, and other blockchain information. Events in the blockchain can come in the form of transfer or any interaction with the network. Being able to record events on Ethereum via Polkadot was an important tool in creating cross-chain applications.
Moonbeam in 2021
2021 was Moonbeam’s mainnet year. The project managed to secure the second parachain slot on the Polkadot network. It was a tremendous success that saw the involvement of over 200,000 participants who contributed their $DOT to the crowdloan. In total, contributions reached over 35 million DOT, worth around $1.4 billion.
Crowdloans are a way for projects to fundraise for a parachain slot on the Polkadot network. An individual can temporarily lock their DOT in exchange for a reward from the project team, often in the form of the project’s native tokens. The contributed DOT are used to help parachain projects launch to the network, and are returned to the crowdloan participant once the parachain lease ends. Moonbeam leased its parachain slot from December 17 until October 24, 2023.
The crowdloan was such a success because of the intensive preparation that occurred in the beginning of the year. Before joining a crowdloan on Polkadot, projects have to secure a parachain slot on Kusama, the sister network of Polkadot. PureStake participated in Kusama’s parachain auctions and was the first network to secure a slot. More than $5 million was contributed to the auction, which is a testament of the importance of Moonbeam within the Polkadot ecosystem.
The network’s Kusama deployment is called Moonriver, and has its own utility token which is called $MOVR. Moonriver serves as a community-led experiment before the upgrades are implemented on the Moonbeam network.
Since launching on June 29, activity on Moonriver had boomed. There were close to 100K wallet addresses on the network that have sent over 1 million transactions within 3 weeks. By the end of the year, Moonriver (MOVR) had processed over 13 million transactions, with around 1650 ERC20 tokens deployed, 340,000 wallets and approximately 925,000 MOVR tokens staked.
On the engineering front, Moonriver has had 5 client releases and 4 runtime updates since launch. The implementations on Moonriver pick on where Moonbeam’s alpha testnet (called Moonbase) left off.
In parallel with the testing on Moonriver, PureStake was working with the Parity team to port the Balancer protocol to Moonbeam. Balancer Labs offered a grant funding to introduce its AMM to the Polkadot ecosystem. This was an excellent occasion to outline Moonbeam’s capabilities to deploy Ethereum-based dapps to Polkadot. As a result, Polkadot-native assets could be made available as ERC20 tokens to the instance of Balancer on Moonbeam.
Moonbeam in 2022
2022 has been the best year to date, with the price of $GLMR reaching an all-time high of $29.84. This was influenced by some key factors.
The main factor was that with the launch, Moonbeam opened up its full capabilities. Builders in the Polkadot ecosystem were able to deploy their projects on Moonbeam and enjoy interoperability with the Ethereum chain.
More than 100 projects were already building on Moonbeam, offering services such as DEXs, launchpads, bridges and other key DeFi applications. At this point, every Polkadot parachain is building on Moonbeam, or is planning do so.
Another factor was staking on Moonbeam. Within the first couple weeks after the launch, more than 200 million $GLMR had been staked on the network. Just a month before winning the parachain auction, Moonbeam was offering an attractive APY of 505%. Although the APY fell sharply on network launch, it stabilized to around 13%. The price of $GLMR followed, as it crashed to around $2. Notably, only a small percentage of the GLMR tokens have been in circulation, which limits the number of tokens that can be staked.
Moonbeam is in a constant growth cycle, and network participants like us can earn more $GLMR without too much hassle or technical knowledge, right from the comfort of our homes.
Learn how to do that in our Moonbeam Mining & Staking guide, which includes the exact steps and best methods of earning more crypto like $GLMR in 2022 and beyond.