Posts about Algorand
A lot of us invested in Algorand. I also bought some a few years ago. Back in those days, all of us were very bullish and positive. Algorand was all over Reddit and other social media websites and news websites. Algorand got some strong partners over the years.
https://i.redd.it/2j2wixee8jbb1.pngFast forward to 2023, and Algorand is a little under $0.11. Yet it used to trade at $3.15 in 2019 and $2.30 in 2021. Relative to Bitcoin, Algorand is even down 99% since 2019.
Actually, from the start of 2023:
| Cryptocurrency | Price 1 January 2023 | Price 12 July 2023 | % difference |
|---|---|---|---|
| Bitcoin | $16625 | $30742 | +85% |
| Ethereum | $1201 | $1886 | +57% |
| Algorand | $0,1775 | $0.1062 | -40% |
So while Bitcoin is up 85% and Ethereum up 57%, Algorand is down 40%. This means that $1000 invested in these three cryptocurrencies would give you $1850 (Bitcoin), $1570 (Ethereum), or $600 (Algorand). That is an INSANE difference.
For perspective, XRP is 40% up, Litecoin 36% up, Polkadot 18% up, ADA 16% up, and Solana 120% up. Almost every other alt is outperforming Algorand since the start of the year.
What happened? Where did this go wrong? Cant believe how bad Algorand is performing.
It shouldn't come as a surprise that Crypto Specific Subs - are served with an insane amount of Copium. When anything bad happens with the crypto you can check the Sub and find the latest spin for why "it is actually a good thing" and why the token is going to inevitably Moon.
Being a previous sub favorite and one of the most shilled Cryptos on this sub in 2021, everyone here is probably more familiar with the 46th Ranked Crypto, 'Algorand' - than higher ranked cryptos like: Stacks, Aave, FileCoin, or OKB. As a result, it shouldn't be surprising that Algorand gets an unequal amount of attention over it's horrendous bear market performance.
https://i.redd.it/lj2oqp6k7ebb1.pngEven today Algorand continues to drop and is currently the worst performing crypto over the last 7 days out of any crypto in the top 100 by Marketcap.
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For the past year, whenever I see anything bad happen to Algorand I check the Algorand Sub and often see the same rehashed lines
"Algorand is the easiest to use L1 and has the best tech this bear market doesn't matter"
or
"Now is the time to buy Algorand, Development is only getting easier"
When people call out Algorand for it's obvious flaws, like the Centralization of ALGO and the Foundation constantly dumping on retail. You see things on the Algo sub like:
"The more the Foundations dump now, the less they can dump later. This is going to become bullish in a bull market."
As a spectator it's easy to believe these lines, especially coming from people who are so confident that their crypto of choice will recover.
https://i.redd.it/2mo56sq7ydbb1.pngDespite that - Algorand has just continued to fall during this bear market and currently shows no signs that it might recover. Especially now that the biggest ALGO DEX is closing shop.
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It's true, the CryptoCurrency sub does have a horrendous record and will often shill pumping projects only to make the new buyers - bag holders. But for all of its flaws, this sub does have users that really know the Pros/Cons of different Crypto projects, and aren't just going to repeat the same lines of raw and unfiltered Copium that you'd find in a Crypto Specific Sub like Algorand
Don't look for investment guidance in a Crypto Specific Sub - If you do, you'll likely end up DCA'ing into a endlessly dumping project based off an insane amount of unfiltered copium from the existing (bag)holders.
Like many other altcoins Algo has taken a beating in the bear market. Algofi now shuts down even though they got over 2M in funding in 2021 from venture capitalists including Coinbase ventures.
the team believes that going forward we are no longer able to provide the support necessary to maintain the protocol at the high standards which we believe the community deserves. We will begin sunsetting the platform and put the platform in withdrawal-only mode.
Is this the straw that breaks the camel's back? Or is the camel already broken?(down 90% from all time high)
The details can be found in their blog post - https://blog.algofi.org/algofi-community-update-3cc989962d57?gi=9f39b97cc651
Many of us invested in Algorand. I also bought some. In 2020/2021, the entire subreddit was insanely bullish on Algorand. It was also mentioned all over social media and on many news websites.
But to say that Algorand has been a terrible performer would be an understatement. Some facts:
Algo is almost 96% down from the November 2021 high
Algo is down over 96% from all time high June 2019
Algo is down about 99% against Bitcoin since June 2019 and keeps making new lows
Algo is down 97% against Ethereum since January 2020 and keeps making new lows
Algo is the second worst performing top 50 altcoin in the past 90 days. Bitcoin is up 28.5%, while Algo is down 34.2%.
So what can we learn from this to ensure that we do not repeat the same mistakes?
I'll share mine and then am looking forward to yours.
I will never again buy a cryptocurrency with poor tokenomics. Algo had over 500% inflation in 2021 while the staking rewards were nowhere near that. That is SO MUCH extra selling pressure. I now refuse to buy a project where staking does not cover inflation.
I will avoid cryptocurrencies that go for expensive yet meaningless partnerships. Algo got a Fifa World Cup partnership that was worth nothing. FTX and CDC did something similar by getting naming rights on stadiums (Miami Heat Basketball Team, Staples Center). This is paid for with users' money. So essentially current investors are the cash cow to draw in more idiots.
I will avoid projects that are heavily shilled here. Algo, LRC, ONE, LUNA, CRO, VET, CKB, Neo, and the list goes on. The inverse r/CryptoCurrency graveyard is heavily populated.* Quite a lot of this shilling was not natural.
*... but now everyone is bearish on Algo. What if it inverses to the bull side? 😂
Scrolling through the top accounts on Algorand there’s something that stands out as strange. There is an account that seems to hold 6% of supply.
We know that Algo’s max supply is 10 Billion such that the 620 Million that this wallet holds is 6.2% of supply. I’m not trying to FUD anything, but I also double checked on the Algorand website. This wallet address does not match any of the identified team wallets.
6% could be worse but it isn’t fun to know. I even tried following a bunch of threads across the internet but no dice. Quite a decent amount of people seemed to have noticed it as well but no one has seemed to unravel the mysterious wallet. It does appear to be an individual's wallet as opposed to a exchange’s/DEX’s as Twitter threads say that the wallet has interacted with a variety of exchanges from Binance to OKex to Kucoin. It also suddenly went from a balance of 0 ALGO to 244 million(2.4% of supply) and has generally only been buying more and more as the days went by. That'd be pretty atypical for any exchange.
I have always trusted the balanced approach the r/cc community takes to various projects, and I feel this story needs to be told.
I want to give you my 2 cents about Algorand (yes, the token which has gone -95% from its ATHs) and take you on the journey that I've been the last 3 years.
Facts (positives):
Algorand is decentralised (you may refute that argument on a relative basis) but it has 120 relay nodes and 1600 participation nodes. One-click nodes currently rolled out to the ecosystem will increase this further.
Its very cheap, extremely scalable and has instant finality (3.3 secs) using pure proof of state consensus mechanism - ideal for payment systems
One of the most environmentally sustainable L1 protocols
Forkless, monolithic, gasless, smart contract network (using own architecture Algorand Virtual Machine vs. ERC20 / EVM)
Facts (negatives):
Adoption - Algorand dev tools was absolutely garbage before Jon Woods came into the picture. Because it uses Teal (turing complete) it has always been hard to get developers to build on Algorand. Good apps are a necessity for users to come on a chain and stay there
Tokenomics / price action - Was launched in 2019 via a dutch auction, had massive incentives for node runners (which was adjusted to accelerated vesting across 2021 - 22). This absolute garbage tokenomics model bled Algorand to where it is at today. To paint you a picture, during the COVID crash, Algorand's market cap was USD 90m. Today (July 2023), it is USD 900m (through FTX, Celsius, Do Kwon, SEC, Myalgowallet hack etc. etc.). In spite of this 10x market cap expansion, the token price is at all time lows.
Algorand Foundation - Foundation's job is to increase (i) visibility; and (ii) adoption. Things can always be run better. However, AF has taken many decisions which have left the community flummoxed. E.g. face value governance, pivoted towards spending tokens aggressively on marketing in 2022 which did not work out. They have hired very smart people and focused on the right things but leadership is questionable ("Nike" tweet anyone?)
User experience:
Personally, using Algorand has been the best experience I've had in crypto (I've used in defi, governance, real estate tokenisation and music NFTs).
Outlook on negatives:
On adoption, I think one click nodes and Algokit will help greatly in getting the ecosystem together. The unanswered question in my mind is they still need to come up with a node running incentive system which is sustainable (and no, I don't think people will run nodes for free).
On price action, I think this is a pivotal time for the Algorand unit token to rise, as all the bad blood has been taken out of the system. The current circulating supply is 7.8bn (of a max 10bn) and within the remainder 2.2bn, 1.0bn is earmarked for governance rewards, 1.0bn is for ecosystem growth (grants) and 200m discretionary at Algorand Foundation. Going forward, algo will have c. 3% inflation each year to 2030 till all 10 bn is in circulation.
On Algorand Foundation, honestly, I think they will fade away into the background once they are done with their structured selling and grants. I am very optimistic of a day when Algorand is fully community driven (having a core developer team like bitcoin but largely upgraded via Algo inc and the community). Algorand has the network effect to live and breathe and be successful. Some of the big usecases already are testament to it (hesabpay, Bank of Italy sureties, etc).
I think Algorand will be one of the best outperformers over 2024 - 25 (ex. any black swan event)
I will link one of better deep dives on Algorand by u/Maleficent_Plankton here if you'd like to read more on the project: https://www.reddit.com/r/CryptoCurrency/comments/wg1tes/algorand_deep_dive/
Update: Included thoughts on Algorand foundation and their shortcomings.
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TLDR: Algorand's market cap has 10xed since COVID till 2023 in a bear market through FTX, Celcius, Terra Luna, SEC vendetta. A large part of that uplift was absorbed in the massive amount of token unlock through accelerated vesting for node runners (not ideal for original investors). What do you think may happen over the next couple of years beyond the next halving when Algorand's inflation per year is 3% vs. 150% per year historically?"
