What Is Algorand?
Algorand is a permissionless, open-source, Layer 1 blockchain network which has been designed to solve the blockchain trilemma by being scalable, secure and decentralized. It was created by MIT professor, Silvio Micali and launched in 2019. The network offers fast transaction speeds (up to 1,300 transactions per second), near instant transaction finality, and extremely cheap transaction fees (a fraction of a cent).
Algorand uses a Pure Proof-of-Stake (PPoS) consensus mechanism which distributes validator rewards to all owners of the network’s native currency, the $ALGO. This mechanism chooses validators and block proposers using a Verifiable Random Function (VRF) from anyone who has staked and generated a participation key. The chance of being chosen is directly related to the proportion of the participant’s stake of the overall amount staked. Obviously, a small holder will have a lower chance of being selected than a big holder. Unlike PoS blockchains, Algorand doesn’t require a minimum stake, which is a significant barrier to entry for the average user. With every staker who runs a node being a possible validator, the network’s security is more decentralized than one with a chosen set of validators. Algorand also makes a point of being a crypto with a ‘green future’ as its consensus mechanism is more energy efficient than many other blockchains, with the network being carbon negative since 2021.
Users need to hold at least 1 $ALGO in a non-custodial wallet to receive $ALGO rewards. This mechanism makes the ALGO coin one of the simplest cryptocurrencies for users to generate passive income. Rewards are approximately 6 to 8% APY.
In December 2021, Algorand launched its liquidity protocol dApp (Decentralized Application) called Algofi, aimed at providing a decentralized lending market and yield farming opportunities. This launch completes the trifecta of core protocols on Algorand, readying the network’s DeFi ecosystem for take-off. The trifecta includes AlgoFi, Tinyman, the Algorand-based Decentralized Exchange (DEX), and Algomint, a digital assets minter that provides bridges between Algorand and other blockchain protocols.
The $ALGO Token
$ALGO is the native currency that powers the Algorand ecosystem and has the following utility;
- Can be staked for a chance to become a block proposer or validator.
- Can be held in a non-custodial wallet to earn passive rewards.
- Can be used to pay for transaction fees within the network.
Current Market Cap: $4.7 billion
Circulating Supply: 6.63 billion tokens
Maximum Supply: 10 billion tokens
The $ALGO token can be purchased on leading crypto exchanges such as Binance, Coinbase Pro, Kucoin, and Huobi Global.
Wallet Support
The Pera Wallet (formerly Algorand Wallet) is the easiest and safest way to store, buy and swap on the Algorand blockchain. This mobile wallet can be used with all dApps in the network and has the full support of Ledger Nano X for extra security.
An Eye on the Future
It can be said that Algorand is still finding its feet, with very little in the way of dApps deployed on the network at the moment. However, there have been some significant announcements in recent months, signaling a bright future for the development of the ecosystem.
- An important near-term factor which will be crucial…
