Home Blockchain A Look At How Algorand (ALGO) Is Developing Into One Of The Most Popular Tokenization Blockchains

A Look At How Algorand (ALGO) Is Developing Into One Of The Most Popular Tokenization Blockchains

Algorand ALGO

Algorand is one of the newer projects in the blockchain space but it has been rapidly gaining popularity thanks to its approach towards providing tokenization services. It has been described as one of the most promising blockchain projects thanks to its robust technology, strong team, and ability to attract investors. Let’s dive into the details to understand what it is all about.

Algorand is a blockchain platform that supports cryptocurrencies and smart contracts with all the important characteristics such as scalability, decentralization, and security. It was founded by MIT professor Silvio Micali. Algorand leverages a unique consensus mechanism known as Pure Proof of Stake that completes blocks in a matter of seconds, which means transactions take place very quickly.

The Algorand blockchain has atomic transfers built into layer one and smart contracts are highly customizable. It is also one of the few blockchains that have asset tokenization capabilities built into its mainnet. This feature is particularly important and is the reason why many governments across the world view Algorand as one of the ideal blockchains for launching central bank digital currencies or CBDCs.

Algorand has 1,100 relay and participation nodes which is far better than the 24 validator nodes on the rival Stellar blockchain which is also a likely candidate for CBDC support. Algorand also takes the win for transaction throughput at about 1,000 transactions per second compared to Stellar’s TPS which is in the hundreds.

Algorand’s abundance of partnerships

One of the most popular Algorand products is Circle’s USDC stablecoin which was launched in November 2020. The project has secured multiple key partnerships within the last two years. For example, it collaborated with a carbon credits trading platform called Climate Trade in December, to make tokenized carbon credits that can be traded on Algorand’s blockchain.

Algorand completed a partnership with Razor network in February this year, allowing it to finally have a data oracle. This was an important step for supporting decentralized applications. The blockchain now supports tokenized silver and gold thanks to a partnership with Meld in March.

Algorand announced in April that it teamed up with Italy’s largest copyright agency called SIAE, facilitating copyright verification through the Algorand blockchain. The blockchain project announced a collaboration with Vesta Equity in April to develop real estate tokens that will allow people to own a part of commercial or residential properties.

ALGO’s performance

The network’s Pure Proof of Stake mechanism requires ALGO tokens to be staked to participate in the network nodes. They can also be used to facilitate transaction fees on the blockchain. The utility of the ALGO’s performance has been quite volatile since its launch in 2019. It started trading at $3.44 but then turned bearish as the initial investors and project team started selling their holdings. This sent the price crashing and in March 2020 it reached a low of $0.09.

Algorand ALGO USDT
 Source- Binance

ALGO’s performance has since recovered to healthier price levels and is currently trading at $1.07. However, it is still trading below its all-time high price and can potentially reach such levels or even higher as more adoption and partnerships continue to take place. Selling by early investors is one of the factors that has limited its performance.

The Algorand blockchain’s native token has just over 3 billion tokens in supply and roughly $3.2 billion in market cap. An influx of lucrative government contracts to develop CBDCs could technically boost its market cap, leading to a higher ALGO price. Algorand still needs more adoption from the general public through dapps, an area that has been severely neglected. An introduction of more economic incentives might be useful in facilitating more engagement on the network and securing a better footing for growth.

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Sydney Ifergan

Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.

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