Posts about Algorand
First off, it’s important to have an understanding of tokenomics and what the criteria for good tokenomics would be;
Tokenomics provide a way to assess how a token will be used and possibly provide insights into the potential success of a particular cryptocurrency.
The factors that underpin the makings of a well-developed token are the following:
Useful within the ecosystem
Resistant to inflation
Has the potential and ability to scale
High in value
Present on exchanges
There’s a common myth that Algorand has bad tokenomics, which seems to have spread pretty much unchallenged within the space due to what is now historical information.
But if we look at each point in turn we can prove that this is not the case.
Point 1. Useful within the ecosystem:
The Algorand token ALGO is used throughout the ecosystem to fund all transactions on the Algorand blockchain. It is vital to and is the root of all transactions, whether that be a payment, the creation of a smart contract, staking, defi, NFT, application- anything- all occurs via Algorands ALGO token. Point 1 then is ✅
Point 2. Resistant to inflation:
This is where most people originally obtained the opinion that Algorand was inflationary. A couple of years ago, there was much less supply in circulation and it is fair to say that inflation was high at that time. But that was a couple of years ago. There will only ever be 10bn Algorand in circulation and as I write this there is already 7.8bn in circulation. So 78% of Algo is already out. So the maximum inflation for this token is now only 22% FOREVER.
If you compare this to some other big projects you can see how good this is.
XRP has 53% in circulation out of 100bn, so that’s 4.3x the total supply of ALGO still yet to hit the market. 43 BILLION tokens! And yet I’ve never heard anyone say XRP has bad tokenomics.
SOL has an unlimited supply. So potentially unlimited inflation.
HBAR has 64% of its 50bn tokens released. Meaning it still has 18bn tokens to go! 1.8x the total supply of ALGO. Its current annual inflation rate is 44%!
Check the stats out for yourselves, you’d be surprised when you compare them.
Point 2 ✅
Point 3. Has the potential and ability to scale:
Algorand as a network is just getting started. They’ve spend the bear market building. Back in November 2021 ALGO had around 1500tps, this is now 10,000tps.
It’s now quantum secure.
Its finality time is up from 3.8 seconds to 3.3 seconds which is pretty unmatched in the industry.
It’s got deals with FIFA, the Bank of Italy, Limewire and lots more besides.
All within the bear market.
It’s just received a $50m investment from DWF labs https://cryptoslate.com/algorand-partners-with-dwf-labs-in-50m-deal/?amp=1 which will easily fund the foundation until well after this bear market ends
Its founder is Silvio Micali. The OG of crypto. https://en.m.wikipedia.org/wiki/Silvio_Micali Probably the second most important person in crypto industry history next to Satoshi Nakamoto. Without Silvio’s work there couldn’t have been Bitcoin.
Here’s what Charles Hoskinson had to say about Silvio, Algorand and their team https://youtu.be/hD7zr9vZEhs
And he’s also right about market adoption, this hasn’t started for Algorand yet in anywhere near the amount that it will. John Alan Woods, who is undeniably one of the best CTOs in crypto, has recently released ALGOKIT, which gives developers the best user experience in crypto. The Algorand foundation runs training courses for new developers in India, which is one of the biggest markets in the crypto space and is likely to be one of the main hubs for development in the future. https://www.prnewswire.com/news-releases/algorand-foundation-announces-broad-reaching-partnerships-in-india-to-grow-web3-301740183.html
So does Algorand have the potential to scale in future- god yes ✅
Point 4. High in value:
Algorand is one of the top 50 cryptocurrencies in the world with a market cap of $860,000,000 so point 4 ✅
Should it be higher. Yes it should (see point 3)
Why isn’t it higher?
Two things have damaged Algorands price recently. A third party web wallet was hacked. This wasn’t anything to do with the Algo protocol, but it was one of the main wallets used by Algo holders.
At the end of the day though it wasn’t Algorand that was at fault, the blockchain was and is just as secure as ever.
The second thing that damaged the price was Gary Gensler. In the Bittrex case, Gensler accused ALGO of being a security. This was just before he went round naming other tokens like SOL, MATIC and ADA as securities and it certainly had the biggest impact on ALGOs price. People feared that it would be delisted by exchanges and the price would tank.
But we now know from the Ripple case that it depends on how the token was sold as to if it counts as a security, and that tokens sold via exchanges don’t fit that definition. So what do we know about ALGOs sales outside of exchanges? We know that the Algorand Foundation is based in Singapore, and held an ICO in Singapore which excluded US participants https://www.algorand.foundation/algo-auction-overview So in other words, the exchange sales are fine, non securities, and no exchange will delist ALGO- and the ICO sales were held in a way to specifically stay outside of the jurisdiction of the SEC. So there’s no court case for ALGO pending folks.
This price has been suppressed and some of us believe that it’s been suppressed for a reason.
Point 5. Present on exchanges:
ALGO is available to trade on all major centralised and decentralised exchanges. ✅
The market options for ALGO are just as big as for any other major cryptocurrency.
It’s also being used to bridge to other cryptocurrencies. During the recent PEPE boom, you could avoid huge gas fees by buying PEPE on Algo- which has virtually no gas fees. So you basically got $50 more worth of PEPE just by using Algo to buy it.
In summary, ALGO has brilliant tokenomics. When you see people saying that they don’t, they’re either working off old, now incorrect information, or they just don’t want to hear the truth.
Don’t listen to the fud (which will soon be available below).
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.
------------------------------------------
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.
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? 😂
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
First off, it’s important to have an understanding of tokenomics and what the criteria for good tokenomics would be;
Tokenomics provide a way to assess how a token will be used and possibly provide insights into the potential success of a particular cryptocurrency.
The factors that underpin the makings of a well-developed token are the following:
Useful within the ecosystem
Resistant to inflation
Has the potential and ability to scale
High in value
Present on exchanges
There’s a common myth that Algorand has bad tokenomics, which seems to have spread pretty much unchallenged within the space due to what is now historical information.
But if we look at each point in turn we can prove that this is not the case.
Point 1. Useful within the ecosystem:
The Algorand token ALGO is used throughout the ecosystem to fund all transactions on the Algorand blockchain. It is vital to and is the root of all transactions, whether that be a payment, the creation of a smart contract, staking, defi, NFT, application- anything- all occurs via Algorands ALGO token. Point 1 then is ✅
Point 2. Resistant to inflation:
This is where most people originally obtained the opinion that Algorand was inflationary. A couple of years ago, there was much less supply in circulation and it is fair to say that inflation was high at that time. But that was a couple of years ago. There will only ever be 10bn Algorand in circulation and as I write this there is already 7.8bn in circulation. So 78% of Algo is already out. So the maximum inflation for this token is now only 22% FOREVER.
If you compare this to some other big projects you can see how good this is.
XRP has 53% in circulation out of 100bn, so that’s 4.3x the total supply of ALGO still yet to hit the market. 43 BILLION tokens! And yet I’ve never heard anyone say XRP has bad tokenomics.
SOL has an unlimited supply. So potentially unlimited inflation.
HBAR has 64% of its 50bn tokens released. Meaning it still has 18bn tokens to go! 1.8x the total supply of ALGO. Its current annual inflation rate is 44%!
Check the stats out for yourselves, you’d be surprised when you compare them.
Point 2 ✅
Point 3. Has the potential and ability to scale:
Algorand as a network is just getting started. They’ve spend the bear market building. Back in November 2021 ALGO had around 1500tps, this is now 10,000tps.
It’s now quantum secure.
Its finality time is up from 3.8 seconds to 3.3 seconds which is pretty unmatched in the industry.
It’s got deals with FIFA, the Bank of Italy, Limewire and lots more besides.
All within the bear market.
It’s just received a $50m investment from DWF labs https://cryptoslate.com/algorand-partners-with-dwf-labs-in-50m-deal/?amp=1 which will easily fund the foundation until well after this bear market ends
Its founder is Silvio Micali. The OG of crypto. https://en.m.wikipedia.org/wiki/Silvio_Micali Probably the second most important person in crypto industry history next to Satoshi Nakamoto. Without Silvio’s work there couldn’t have been Bitcoin.
Here’s what Charles Hoskinson had to say about Silvio, Algorand and their team https://youtu.be/hD7zr9vZEhs
And he’s also right about market adoption, this hasn’t started for Algorand yet in anywhere near the amount that it will. John Alan Woods, who is undeniably one of the best CTOs in crypto, has recently released ALGOKIT, which gives developers the best user experience in crypto. The Algorand foundation runs training courses for new developers in India, which is one of the biggest markets in the crypto space and is likely to be one of the main hubs for development in the future. https://www.prnewswire.com/news-releases/algorand-foundation-announces-broad-reaching-partnerships-in-india-to-grow-web3-301740183.html
So does Algorand have the potential to scale in future- god yes ✅
Point 4. High in value:
Algorand is one of the top 50 cryptocurrencies in the world with a market cap of $860,000,000 so point 4 ✅
Should it be higher. Yes it should (see point 3)
Why isn’t it higher?
Two things have damaged Algorands price recently. A third party web wallet was hacked. This wasn’t anything to do with the Algo protocol, but it was one of the main wallets used by Algo holders.
At the end of the day though it wasn’t Algorand that was at fault, the blockchain was and is just as secure as ever.
The second thing that damaged the price was Gary Gensler. In the Bittrex case, Gensler accused ALGO of being a security. This was just before he went round naming other tokens like SOL, MATIC and ADA as securities and it certainly had the biggest impact on ALGOs price. People feared that it would be delisted by exchanges and the price would tank.
But we now know from the Ripple case that it depends on how the token was sold as to if it counts as a security, and that tokens sold via exchanges don’t fit that definition. So what do we know about ALGOs sales outside of exchanges? We know that the Algorand Foundation is based in Singapore, and held an ICO in Singapore which excluded US participants https://www.algorand.foundation/algo-auction-overview So in other words, the exchange sales are fine, non securities, and no exchange will delist ALGO- and the ICO sales were held in a way to specifically stay outside of the jurisdiction of the SEC. So there’s no court case for ALGO pending folks.
This price has been suppressed and some of us believe that it’s been suppressed for a reason.
Point 5. Present on exchanges:
ALGO is available to trade on all major centralised and decentralised exchanges. ✅
The market options for ALGO are just as big as for any other major cryptocurrency.
It’s also being used to bridge to other cryptocurrencies. During the recent PEPE boom, you could avoid huge gas fees by buying PEPE on Algo- which has virtually no gas fees. So you basically got $50 more worth of PEPE just by using Algo to buy it.
In summary, ALGO has brilliant tokenomics. When you see people saying that they don’t, they’re either working off old, now incorrect information, or they just don’t want to hear the truth.
Don’t listen to the fud (which will soon be available below the copy of this I’ve just pasted in the cryptocurrency sub)
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.