Algorand (ALGO)

Algorand is a Layer 1 smart contract platform that has made strides in solving the “Blockchain Trilemma” of scalability, decentralization, and security.

Algorand uses its own consensus mechanism as well as a two-layered smart contract architecture to approve transactions quickly and minimize the odds of a network attack.

Algorand delivers fast and final transactions, with blocks finalized in about 4.5 seconds. This eliminates the risk of forks or rollbacks, making transactions irreversible.

The network can handle thousands of transactions per second (TPS) and maintains extremely low transaction fees, typically under $0.001

Projects built on Algorand’s blockchain can build dApps and tokens that can process faster, cheaper, and more secure transactions than Ethereum and some “Ethereum killers.”

How does Algorand work?

Most projects that use proof of stake (PoS) consensus mechanisms involve nominating validators based on how many native tokens they’ve staked into the network.

Algorand pioneered the use of Pure Proof of Stake (PPoS) protocol where block creation depends on validators (known as “block proposers”) which are chosen randomly and proportionally based on the amount of ALGO they hold.

This ensures fairness and prevents centralized control. The process involves three steps:

  1. Block Proposal: A small subset of participants is randomly chosen to propose the next block.
  2. Soft Vote: Another randomly selected group verifies the proposed block.
  3. Certify Vote: A final random subset certifies the block before it is added to the chain.

The random selection process, known as cryptographic sortition, ensures unpredictability and security.

Validators don’t need to compete for the next block, so the network has low computational requirements (sustainable).

And because validators only approve one block at a time, Algorand’s blocks can reach finality faster (scalable) and they can’t be forked (secure).

Finally, the random selection of block creators promotes security in the network (decentralized).

Aside from instant consensus, Algorand also uses a two-layered smart contract architecture to improve throughput.

The first layer executes simple smart contracts on-chain. Examples include atomic transfers and tokens and NFT creation and management.

The larger, more complicated smart contracts are computed in another layer off-chain. Contracts that need to consult and filter databases, for example, are made on this layer.

Real-World Applications

The flexibility and efficiency of Algorand make it suitable for a variety of applications, including:

  • DeFi: Lending, borrowing, and trading on platforms like Tinyman and Algofi.
  • Tokenized Assets: Issuance of stablecoins like USDC and other asset-backed tokens.
  • Cross-Border Payments: Fast and low-cost international transfers.
  • Supply Chain Management: Transparency and traceability for goods.
  • NFTs: Eco-friendly minting on platforms like Algogems and RandGallery.

What is the ALGO token?

Algorand’s native token ALGO serves multiple purposes within the Algorand ecosystem:

  • Transaction Fees: ALGO is used to pay minimal transaction fees on the network, making transfers efficient and cost-effective.
  • Staking and Consensus: ALGO holders participate in the blockchain’s Pure Proof-of-Stake (PPoS) consensus mechanism, helping to validate transactions and secure the network.
  • Incentives: Users, node operators, and developers can earn ALGO tokens as rewards for participating in the ecosystem.
  • Governance: ALGO is used for voting in Algorand’s decentralized governance system, allowing holders to influence network decisions.

ALGO owners can also stake their tokens on-chain–and even when held on an exchange–to earn small inflation rewards.

Algorand is one of the bigger “Ethereum killer” competitors so ALGO is available on major crypto exchanges and can be stored in Ledger, Trezor, Algorand Wallet, and other major wallets.

Team background

The Algorand (ALGO) team is led by a group of experienced professionals from diverse fields, particularly in cryptography, computer science, and business. Here’s a breakdown of the notable individuals and their backgrounds:

1. Silvio Micali (Founder)

  • Background: Renowned computer scientist and Turing Award winner (2012), often referred to as the “Nobel Prize of Computing.”
  • Expertise: Cryptography, zero-knowledge proofs, verifiable random functions.
  • Academic Role: Professor at the Massachusetts Institute of Technology (MIT).
  • Notable Achievements: Co-inventor of several cryptographic protocols, including probabilistic encryption, digital signatures, and secure multiparty computation.

2. Steve Kokinos (Former CEO, now Strategic Advisor)

  • Background: Serial entrepreneur with expertise in cloud computing and telecommunications.
  • Previous Ventures: Co-founder of Fuze, a cloud communications and collaboration platform, and BladeLogic, a data center automation company.

3. W. Sean Ford (CEO)

  • Background: Strong experience in corporate strategy, operations, and marketing.
  • Previous Roles: COO of Algorand; also served as the CMO at LogMeIn, a SaaS provider, and held leadership roles at Oracle and other tech companies.

4. Tal Rabin (Head of Research)

  • Background: Renowned cryptographer and academic researcher.
  • Expertise: Secure multiparty computation, distributed systems, and blockchain security.
  • Previous Role: Lead researcher at IBM’s Cryptographic Research Group.

5. Chen Fang (COO)

  • Background: Skilled in product development and operational management, with significant experience in finance and fintech.
  • Previous Roles: Held leadership positions at Circle and other blockchain-related organizations.

Algorand Inc., a Boston-based private corporation, is in charge of developing Algorand’s core protocol, while Algorand Foundation oversees ecosystem research, growth, and decentralization.

Notable Investors: Digital Asset Capital Management, Hash Capital, Eterna Capital, NEO Global Capital, Multicoin Capital, Union Square Ventures, Polybius Capital

Notable Projects:

  • Yieldly Finance: DeFi Suite of liquidity mining, no-loss prize games, staking, cross-chain swaps
  • Algofi: lending market, stablecoin issuer
  • Tinyman: automated market maker
  • Pact: A decentralized exchange (DEX) offering advanced liquidity solutions and trading capabilities.
  • AlgoNFT: A platform for creating, buying, and selling NFTs on the Algorand blockchain.
  • Opulous: A platform for music rights and decentralized finance, allowing musicians to monetize royalties.
  • PlanetWatch: A project focused on environmental data collection using IoT and blockchain.
  • Republic: A tokenized investment platform leveraging Algorand to democratize private investing.
  • Lofty.ai: A real estate investment platform allowing fractional ownership of properties.
  • Algomint: A bridge allowing users to bring Bitcoin, Ethereum, and other assets into the Algorand network as wrapped tokens.
  • Aorist: A platform for generative art and NFT ecosystems on Algorand.
  • Choice Coin: A decentralized governance project enabling voting and decision-making on the blockchain.
  • Circle’s USDC on Algorand: Integration of the USDC stablecoin, enabling fast and low-cost transactions.
  • Prismatic: A project leveraging Algorand for advanced staking and yield strategies.
  • C3 Protocol: A decentralized credit protocol for lending, borrowing, and trading on Algorand.

Token Metrics:

  • 16.573M unique addresses created
  • Circulating Supply: 7.522B ALGO (updated Jan. 2025)
  • Max supply: 10 billion ALGO
  • Inflation Rate: 19.87%
  • Though all 10B ALGO were minted at launch, not all have been unlocked. Over time, ALGOs will be unlocked to reward relay nodes depending on ALGO price acceleration.

Helpful Links: