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The current surge in Defi protocols, dApps, and NFT platforms is generating a lot of traffic on the Ethereum network, which hosts more than 80% of such apps and platforms. Consequently, issues such as high gas fees, security risks, and lesser scalability have proved a deterrent to the growth of decentralized applications, especially in the wake of upcoming web3 developments.
As big enterprises enter the tokenization side of the market and start operating in the Defi world, the need for a highly scalable, secure, and purely decentralized protocol will surely arise. Algorand is one such proof-of-stake (PoS) blockchain technology that holds immense potential. Let’s delve deeper into the decentralized dynamics of Algorand.
Algorand is essentially a permissionless, pure PoS blockchain that helps to ensure full participation, security, and speed within its truly decentralized network. The PoS system employed in the Algorand network randomly selects committees from among the participating holders that validate and approve the next block in the chain.
This randomization is achieved using a unique cryptographic tool called Verifiable Random Function (VRF) developed by Algorand’s founder Silvio Micali, a Professor of Computer Science at the Massachusetts Institute of Technology (MIT), and recipient of the Turing award in 2012.
VRF Function Explained
The VRF function pseudo-randomly selects accounts with voting power dependent on their online stakes. All the messages are cryptographically signed and authenticated with the VRF.
Algorand’s main aim is to remove three technical barriers that reduce the prospects of mainstream adoption of blockchain, including scale, security, and decentralized network. It serves as an infrastructure layer for a wide range of applications, including dApps, crypto networks, and crypto tokens.
The network’s main features include:
The Algorand mainnet went live in June 2019. It can currently process up to 1,300 transactions per second and aims to reach 3,000 TPS in the future.
ALGO is the native cryptocurrency of the Algorand blockchain. It has a total circulating supply of 10 billion ALGO tokens, 65% of which are in circulation currently. It has the same utilities as a fiat currency and can be used as a mode of payment and micropayments with other added features.
ALGO continues to be the fuel of the economic and financial ecosystem of the Algorand blockchain. ALGO is among the top 25 cryptocurrencies by market cap today.
The ALGO token is priced at $1.28 today down by 3% from the previous day.
Source: TradingView, Binance
After a strong rally in June 2021 from $0.67 to a wick all the way to $2.99, ALGO underwent significant consolidation and corrections. It recently lost the golden pocket support of its rise at $1.55 to resistance. It is now currently sitting at a previous daily level of $1.24, and losing this could mean it is headed to the .786 retracement support at $1.17. This level should likely hold. However, it will need to flip the $1.46 resistance to support to show sustained strength and upwards momentum.
2021 was a spectacular year for Algorand. It entered into a $2.5 billion strategic partnership with Hivemind Capital for providing network and technological infrastructure to the fund. Algorand has been actively seeking use cases to support its native token.
Also, Algorand launched its DApp called Algofi, which serves its ecosystem’s two main functions - Tinyman, an Algorand-based DEX, and Algomint, a digital assets minter. Given its core functionalities, Algorand is one of the key competitors of Ethereum today in the institutional space.
Disclaimer:This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.