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Algorand (ALGO) Fact Sheet

Algorand (ALGO) Fact Sheet

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Pure Proof-Of-Stake (PPoS) Blockchain That Powers The Next Generation of Financial Products.

Algorand (ALGO) Fact Sheet

  • Algorand (ALGO) is an open-source, decentralized blockchain that has a two-tier structure and a unique consensus mechanism known as Pure Proof-of-Stake (PPoS) that has the primary goal of increasing the transaction speed and aiding in achieving finality.
  • The block rewards generated on the network get distributed across all holders of the ALGO cryptocurrency. Each holder can earn rewards instead of just producing blocks.
  • Algorand's base layer supports smart contracts, asset creation, and atomic swaps between assets.
  • The Algorand network utilizes relay nodes to enable efficient paths for communication and incorporates participation nodes that can vote on and confirm new blocks for the blockchain.
  • Algorand was created by a computer scientist and a Massachusetts Institute of Technology (MIT) professor Silvio Micali.
  • Algorand Inc. is a private US corporation based in Boston overseeing the core development of the Algorand protocol.

ALGO Historical Data Price Chart in U.S. Dollars (USD)


ALGO Historical Data Price Chart in U.S. Dollars (USD). Source: TradingView

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What is Algorand (ALGO)?

Algorand is a blockchain network created to solve the "Blockchain Trilemma."


The Blockchain Trilemma is a concept coined by Vitalik Buterin that references three main issues found within most blockchain networks. These include decentralization, security, and scalability.


These are issues developers encounter when building a blockchain network, meaning they have to sacrifice a specific aspect in the network to accommodate the other two.


However, Algorand is a blockchain that aims to simultaneously achieve speed, security, and decentralization without sacrificing any aspect of the network.


Algorand was launched in June 2019 by a computer scientist and a Massachusetts Institute of Technology (MIT) professor known as Silvio Micali. It is a permissionless, open-source network where anyone can build decentralized applications (dApps) on it.


Algorand is designed to be a network that facilitates payments, as it has rapid transaction functionality and offers near-instantaneous finality.


The network can essentially process over 1,000 transactions per second (TPS) and achieve transaction finality in fewer than five seconds.


The Algorand blockchain distributes the validator rewards to all of the holders of the native cryptocurrency known as ALGO.

How is Algorand (ALGO) Used?

Algorand utilizes a Pure Proof-of-Stake (PPoS) protocol built on Byzantine consensus. Each user influences the choice whenever a new block gets created, which is proportional to their stake or the number of tokens they have in the system.


Then, users are randomly and secretly selected, where they can propose blocks and even vote on the block proposals. All users have a chance to get selected and submit a vote; however, the likelihood that a user will be chosen and the overall weight of the proposal and vote are directly proportional to the user's stake in the network.


ALGO is the native cryptocurrency utilized throughout the blockchain network and broader ecosystem. As a part of the unique protocol designed for the network, ALGO is split across all coin holders rather than just being rewarded to the block producers. All holders of the ALGO cryptocurrency can earn an annual percentage yield (APY) on their cryptocurrency holdings.


Blockchain users are not required to stake the coin to make this process as simple as possible. All they have to do is hold ALGO in a non-custodial wallet or an exchange to access the earnings gained this way. This way, Algorand can achieve near-automation, as stakers passively hold ALGO while supporting the network.


Algorand’s PPoS consensus mechanism also utilizes a two-phase block production process, which relies on proposing and voting.


Any member of the Algorand network can participate in the proposing and voting procedure through the process of staking the ALGO cryptocurrency, where in turn, for doing so, they are essentially generating a valid participation key, after which they become a "Participation Node."


These nodes are coordinated by other nodes in the Algorand network, known as the "Relay Nodes." These Relay Nodes facilitate the communication that ends up occurring across the Participation Nodes.


However, they do not and cannot directly participate in the process of proposing or even voting.

  • The Proposal Phase - A block leader gets selected to propose a block at this stage. Block leaders get selected through the utilization of the verifiable random function (VRF) found on Algorand, which is a provably random mechanism specifically created to select nodes at random. The VRF supplies cryptographic proof, allowing the block leader in question to prove their status as a block leader.
  • The Voting Stage - After the initial proposal stage, we have the voting stage, where the Participation Nodes get elected randomly to a committee responsible for ensuring that no double-spending, overspending, or other issues occur in the block. Once everything is agreed upon, and everyone confirms that things are as they should be in the block, it gets added to the blockchain. However, if malicious activities are detected, the network discards the block, and a new block leader gets elected.

Use-Cases of Algorand (ALGO)

The Algorand (ALGO) ecosystem is enormous and comprises hundreds of fintech, startups, financial services, institutions, and even decentralized finance (DeFi) projects. There are over 500 global organizations that are leveraging the technology behind Algorand, which enables them to create next-generation financial products, and protocols and facilitate the exchange of value across decentralized finance (DeFi).


Some of the most common use-cases for the Algorand network include entertainment, infrastructure, securities, supply chain, identity management, stablecoins, insurance, environmental work, gaming, financial institutions, and digital assets.

Usability & Primary Features of Algorand (ALGO)

There are numerous use cases and features that the Algorand (ALGO) blockchain has going for it, and we will cover the primary ones here.

Protocol

Algorand features its protocol known as the Algorand Standard Asset (ASA) protocol, where developers can create new tokens or transfer existing tokens to the Algorand ecosystem.


The key features of Algorand (ALGO) include:

  • The  Pure Proof-Of-Stake (PPoS)  consensus - is a consensus protocol built on Byzantine agreement, where the users can influence the choice of new blocks in a way that is proportional to their stake in the system.
  • Immediate transaction finality - Algorand does not and cannot experience a fork because only one block can have the required threshold of signatures to be certified within a specific round.
  • Random Selection - all of the users within the network are randomly, secretly, and continuously selected for the process of participating within the consensus protocol.
  • Changing Participants Consistently - the participants within the network change every round of block selection, ensuring that the network is protected against potential attackers, as within each round, a set of participants is selected at random and are entirely independent of the previous participants.

Ledger

Algorand utilizes a unique two-tiered blockchain structure. The base layer supports smart contracts, the ability for developers to create assets, and the ability for users to facilitate atomic swaps between assets.


All of this takes place on Layer-1, which means that it has a high level of security and compatibility as a direct result, as it is not reliant on another blockchain for any of these tasks.


Regarding the first layer, users and platforms can create Algorand Standard Assets (ASAs) that represent new or existing tokens on top of the Algorand blockchain.


These share similarities to how ERC-20-based tokens work on the Ethereum (ETH) blockchain.


Due to its security and smart contracts functionality, the Algorand platform can execute Layer-1 Algorand Smart Contracts (ASC1s), which means they can maintain the same level of security as the consensus protocol.


It is intended for complex smart contracts and decentralized applications (dApps) development.

This layer allows Alogrand to process transactions efficiently. With more complex smart contracts taking place off-chain, the simple transactions are processed a lot more quickly on Layer-1, without the need to get bogged down by the larger, complex smart contracts that would need to occur.

Smart-Contract Support

Algorand does support smart contracts and relies on staking. The network can fully host decentralized applications (dApps) and can provide scalability.

Tokenomics & Supply Distribution

Algorand ended up completing its first Dutch auction in June of 2019, where they sold 25 million of the ALGO cryptocurrency, which is 0.25% of the initial supply at $2.40 per token, which means that the project raised $60,402,220.


Buyers of the cryptocurrency had the right to essentially sell the tokens back to the Algorand Foundation at 90% of the initial purchasing price.

  • The sale ended with the ALgorand’s mainnet launch, which created 10 billion ALGO coins at genesis.
  • 25% of the initial supply was granted to the founders and the Algorand Foundation to support the protocol's continued development.
  • 30% of the total token supply of ALGO was injected into circulation over the project's first five years.
  • 17.5% of ALGO were allocated as participation rewards.
  • 25% of ALGO was allocated to relay node runners, distributed over time.
  • 2.5% of the total token supply of ALGO was allocated to end-user grants.

Team & History

Algorand was created in 2019 by a computer scientist and a Massachusetts Institute of Technology (MIT) professor Silvio Micali.


Micali is the author of the Algorand white paper, which was written alongside Stony Brook University Professor Jing Chen in 2017. Other academics and cryptographers also developed this foundational work in white papers that are seen on the project's official website.


The leadership team of Algorand currently includes:

  • Silvio Micali as the Founder
  • Steve Kokinos as the Chief Executive Officer
  • W. Sean Ford as the Chief Operating Officer
  • Keli Callaghan as Head of Marketing
  • Jing Chen as Head of Theory Research and Chief Scientist
  • Yossi Gilad as Head of Systems Research & Chief Technology Officer
  • Chris Hurley as Head of Investor Relations and Capital Markets
  • Gary Malouf as Head of Engineering
  • Regina O’Brien as Head of People & Talent
  • Chris Peikert as Head of Cryptography
  • Paul Riegle as Chief Product Officer
  • Nina Tannenbaum as Head of Business Operations
  • Anne T. Warner as General Counsel
  • Nickolai Zeldovich as Head of Distributed Systems

Activities & Community

When we look at the activities and community surrounding Algorand (ALGO), the Algorand Telegram Group has over 30,070 members. The Official Algorand Discord Channel has over 33,880 members, and the Algorand Twitter page has over 285.800 followers.

Development Activity and GitHub Repositories

The Algorand (ALGO) GitHub is extensive, with 64 repositories. The stand-out ones and pinned repositories include:

On-Chain Activity

According to Algo Explorer data, the ALGO cryptocurrency value is $0.302 as of July 11, 2022.

The latest block was at 22,151,856, and the circulating supply was 6,976,339,831.65, with a total supply of 10,000,000,000.


Furthermore, as of July 11, 2022, there were 1,072,440 transactions.


Algorand Blockchain Explorer Data. Source: AlgoExplorer.io


According to data from Algoscan, we can see a significant level of activity on the network, with 774,307,140 Transactions.


Algorand Mainnet Explorer Data. Source: Algoscan.app

Activities and Partners

There have been numerous partnerships and activities across the Algorand (ALGO) network. However, some of the more notable ones include:

  • FIFA - FIFA announced an official partnership with the Algorand blockchain on May 2, 2022, where Algodanr became the official blockchain platform of FIFA. This partnership was announced by the President of FIFA, Gianni Infantino, and the Founder of Algorand, Silvio Micali, in Los Angeles, USA.
  • Circle - a global financial technology firm responsible for establishing businesses of all sizes to utilize the power of stablecoins and blockchain platforms for payments, commerce, and financial applications. Circle added support for interoperable digital dollar stablecoins with the USDC through their collaboration with Algorand.
  • Tribex - the Algorand Foundation conducted a partnership with Tribe as a means of driving developer activation in Asia-Pacific (APAC). Tribex is Singapore's first government-supported blockchain ecosystem builder.
  • Algofi - a hub for decentralized finance (DeFi) that occurs on the Algorand blockchain, where users can trade, borrow and earn interest on top of their cryptocurrencies.
  • StakerDAO - a platform intended to govern financial assets in a decentralized, secure, and compliant way. The StakerDAO community aims to build and manage products for on-chain governance, cross-chain synthetics, and even tokenized real-world assets.

References & Reports

References

Market Research

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