Posts about Algorand
A short while ago, I made a post calling out the problems with Algorand. Despite the post itself gaining some traction, pretty much every comment/reply I made to users incurred a wrath of downvotes.
I outlined several data backed reasons justifying why Algorand has no future. The reasons included:
High inflation
Significant drop in daily active users
Marketcap rank drop
Departure of disinterested CEO
Plagiarism of other projects
Incessant shill posting
Three months later, here is some different data to consider:
(Source: Intotheblock)
In and Out of the money
It's gone largely unnoticed with the crash of FTX, but the price of ALGO is back to its price from two years ago.
There are now only 0.28% of ALGO wallets in profit. That means more than 99% of people who have bought ALGO, are now down on their investment.
The Breakeven price is at the worst ever value
The number of addresses that could sell their entire load right now and still turn a profit is less than 7%. In the graph below, the red shows how many ALGO holders are at a loss.
Whales and large investors are selling to retail
For the past two years, the largest holders have been slowly offloading all their ALGO. The only people that have increased their allocation of ALGO over this time period is retail investors. Whales previously more than 70% and have since sold off to a point where they now cover approximately 33%. Retail has gone from a fraction of a percent to almost a third of the circulating supply in this time.
Whales - Green
Large investors - Blue
Retail - Yellow
The circulating supply is still increasing too fast.
Too much ALGO just keeps getting minted. They increased the supply by 6x in 2021 (blue line below), and it is still increasing now. This won't stop until 2030.
Pretty much nobody is using the chain
The active address ratio and daily active address charts show negligble growth in two years. In fact, the green line is almost flat.
It is in almost every sense - a ghost chain. From a peak of over a million address processing transactions per day during the bullrun to just a couple thousand today.
Shillers point to this being a bear market, but look at other chains and you'll see utility has not dried up anywhere near this bad.
Put another way,
Of the ALGO wallets created on chain, only 0.3 % are actively doing anything.
Is it all bad? No.
Development is marginally increasing
Github Commits have been increasing all year. Albeit slowly.
Conclusion: My original thesis stands. While there is actually nothing wrong with the chain (despite nobody using it), there are multiple red flags abound for the foundation. Stay away.
EDIT: I have tried to respond to the critiques in the comments, but every reply I make just gets heavily downvoted, so I give up.
EDIT2: People keep tagging me on the post about the Italy agreement. I’m not sure partnering with a country’s banking industry aligns with the philosophy of crypto.
