What is Shardeum (SHM)?

May 13th What is Shardeum (SHM)?

Shardeum is a layer 1 blockchain designed to address scalability and decentralization through a technology known as dynamic state shards. By splitting network state and workloads into multiple shards that can be scaled or subscribed in real time, Shardeum allows for high transaction throughput while maintaining low fees. Unlike the static sharding model, this dynamic structure allows the network to respond flexibly to usage demands and ensure an efficient balance between performance and resource consumption. Shardeum combines this technology design with an environment coupled to Ethereum Virtual Machine (EVM) to allow developers to deploy existing smart contracts without modification.

Shardeum’s consensus is achieved through a hybrid mechanism that integrates a process called Quorum’s Proof (POQ) with a Proof of Stocks (POS). Rather than banding transactions into blocks, Shardeum completes each transaction individually, reducing delays and enabling faster payments. Validators must bet on their native token, SHM, to participate in the consensus process, and in the case of malicious activities, their actions are novel. The system also incorporates automatic verification device rotation and redundancy to prevent collusion and ensure overall network resilience.

The key architecture distinction lies in Shardeum’s linear scaling approach, where adding nodes increases the processing power of the network proportionally. This is in contrast to vertically scaled systems that rely on improving performance for individual nodes. To maintain long-term sustainability, Shardeum adopts a dynamic supply model for SHM, adjusting publication based on network demand, validator participation, and transaction volume. This elasticity allows the protocol to find equilibrium of token inflation, deflation, and validator incentives while adapting to changes in usage patterns over time.

Shardeum supports a wide ecosystem of distributed applications (DAPPS), infrastructure services, and community governance capabilities. It is integrated with existing wallet standards and RPC endpoints, allowing seamless interaction with the broader Web3 ecosystem. With a technical focus on Atomic Composability, Low Transaction Costs and EVM Support, Shardeum aims to provide a platform suitable for both high-frequency applications and long-term dispersion adjustment. Its roadmap includes further developments in autochemical, interoperability, and open governance, building towards a more modular and adaptive blockchain framework.

What is a SHM token?

SHM tokens are native utility assets for the Shardeum blockchain and serve as the basis unit of value and coordination within the network. It plays a key role in enabling decentralized consensus, promoting economic incentives, and supporting the execution of smart contracts. Like Ethereum’s ETH, SHM is designed with hexadecimal precision, ensuring compatibility with EVM-based tools and applications. Shardeum operates using a combination of Proof of Stock (POS) and Dynamic Shelding, so SHM acts as a token that validators must wager to participate in the network consensus in order to issue rewards that will be subject to honest participation and penalty in the event of fraud.

SHM also acts as a gas token for your network beyond staking. That is, it is used to pay transaction fees and computational costs associated with smart contract deployment and interaction. All transaction fees on the network are burned rather than paid to validators introducing deflationary components into the supply dynamics of SHM. This design can increase the rarity of tokens as usage increases, and balance the inflation effect of the valter reward. Furthermore, SHMs are adopted for governance, and token holders may participate in decision-making processes that affect the evolution of the network.

The initial SHM supply concluded with 249 million tokens at the launch of Mainnet and was allocated to a variety of stakeholders, including teams, communities, foundations and private investors. However, long-term issuance of SHMs is managed by a dynamic supply model that corresponds to real-time network conditions such as transaction volume, valtter costs, and overall activity. This model allows for flexible expansion or contraction of token supply, allowing the network to be sustainable, secure and horizontally scaled without being overly rewarded or unincubated node operators.

Practically, SHM tokens support all major operations on the Shardeum platform, from staking and verification to running DAPP and closing fees. As ecosystems grow, SHM is expected to gain further usefulness within use cases of distributed finance (DEFI), governance, and cross-chain interoperability. Its design intentionally supports both economic incentives and long-term deful pressures, helping Shardeum maintain efficiency, decentralization, and scalability across network conditions, whilst aligning the interests of users, developers, and validators.

SHM Toconomies

SHM’s talknomics are configured to balance network security, scalability, and long-term sustainability through a dynamically tunable supply model. At Genesis, Chardumu introduced a total initial supply of SHM 249 million, with allocations being distributed to team members, private sale participants, foundations and ecosystem initiatives. In particular, 100% of transaction fees on the network are burned in rather than distributed as rewards, and introduces a built-in deflation mechanism. The rewards of validators, the primary means of issuing new SHMs, have not been modified, but are dynamically generated according to actual network demands, such as transaction throughput and the number of active valtters. This allows token issuance to be scaled with adoption while maintaining economic balance.

To further improve sustainability, Shardeum’s toconomies are designed around the balance, ratio and balance between standby and active validated nodes that directly affect S-Ratio and network scalability and decentralization. If the network requires more throughput, then an increase in Validator reward will promote more nodes and increase the S:A ratio. Conversely, if activity slows down, rewards can be adjusted downward to reduce unnecessary token issuance. This model allows SHM supply to be inflation, deflation, or neutral depending on current conditions, maintaining validator incentives without oversaturating the token supply. Reducing SHM from people who are effective in fraud is also burned, enhancing both rarity and accountability.

How to buy SHM with crypto

1. Log in or sign up to create a Bitfinex account.

2. You will be taken to the deposit page.

3. In the Cryptocurrencies section, select the cipher you plan to purchase SHM and generate a deposit address in your Exchange wallet.

4. Send Crypto to the generated deposit address.

5. Once your funds arrive in your wallet, you can exchange them for SHMs. Learn how to trade with Bitfinex here.

How to Buy SHM from Fiat

1. Log in or sign up to create a Bitfinex account.

2. To have Fiat deposited into your Bitfinex account, you must obtain a full verification. Here you will learn about the various levels of verification.

3. On the Deposit page, under the Bank Wire menu, select the Fiat currency for your deposit. Bitfinex’s Fiat deposits have a minimum amount. Click here for details.

4. For more information about the wire, please check the Bitfinex registration email.

5. I’ll send you the funds.

6. Once your funds arrive in your wallet, you can use them to purchase SHMs.

Also, since Bitfinex on your mobile, you can easily purchase SHM currency while you’re out.

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SHM Community Channel

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