crypto News What is Algorand (Algo)?

What is Algorand (Algo)?

What is Algorand (Algo)?

Algorand was founded in 2017 in Boston as a professor at the Massachusetts Institute of Technology and a laureate of The UAE presented Turing Silvio Mikali Prize. The startup attracted $ 4 million sowing investments from the venture companies Pillar Ventures and Union Square Ventures.

Serial entrepreneur Steve Kokinos, who founded the company FUZ, Bladelogic and Webyes, was invited as the general director, and Sean Ford, the co -founder of Upromise and the former marketing director Logmein, became the chief operating director.

In the summer of 2018, an Algorand test network was launched, which demonstrated to potential investors all the advantages of the new blockchain.

In the fall of 2018, the startup organized another round of financing and raised $ 62 million from the group of venture funds.

In April 2019, the twitch became public, and in June the main network was launched. At the same time, an open Dutch auction for the sale of 25 million Native Algorand (Algo) tokens was held, which raised more than $ 60 million.

In November 2019, the first major network update was held to the Algorand 2 version.0, in which support for smart contracts appeared, digital assets and atomic translations.

How Algorand works?

The creators of the project believe that they managed to solve the “blockchain trillem”, simultaneously implementing high performance, scalability and safety due to the consensus mechanism Pure Proof-Of-Stake (“pure evidence of the share” and a number of other innovations.

What is a trilter of blockchain

Blockchain platforms operating on the Consissus algorithm Delegated Proof-OF-Stake (DPOS) and its options, for the sake of high performance, limit the number of validators to several hundred or even dozens, which reduces the level of decentralization and increases the likelihood of abuse.

In Algorand, a high level of decentralization and safety is maintained due to the fact that the validators of the next block of secretly and randomly are selected from all wallets that store at least one Algo coin.

Each block is approved by the protocol of the Byzantine agreement in three stages:

  • Sentence. The leader-leader is accidentally selected, which offers the approval unit;
  • Soft voting. The committee of randomly selected wallets selects from the proposed blocks the only one that will enter the certification;
  • Confirmation of voting. Another accidentally selected committee checks a new block for overrun, double spending or other problems and certifies it to include in the blockchain.

At each stage for the selection of wallets, a checked random function (VRF) is used, which works as a suspended lottery: the more Algo tokens are in the wallet, the more chance that it will be chosen.

Algorand also operates in the network of more than 120 relay units, which are full nodes and contain current copies of the blockchain.

Thanks to this architecture, the network capacity reaches 1000 transactions per second at a 4.5 second block time. The cost of one transaction is 0.001 Algo (about $ 0.0003 as of July 2022).

Another important consequence is the high energy efficiency and efficiency of the Algorand blockchain per transaction compared to not only POW liberties, but also with most DPOS criticizes.

Blockchain uses its own virtual machine Algorand Virtual Machine (AVM). It is not compatible with the Ethereum virtual machine and smart contracts written on Solidity.

AVM native language is Teal. However, smart contracts and decentralized applications can also be written on Python, which is widely used outside the crypto industry.

How is Algorand tocenomics arranged?

Algo – Native cryptocurrency of the blockchain Algorand. It is used for stayking, payment of transaction commissions, launching relay units and as a control token. The coin is traded on the largest exchanges (Binance, Coinbase, Huobi, Kraken, FTX and T.P.) and is included in the top 50 in market capitalization (as of July 2022).

All Algo offer in 10 billion coins were released as part of the premane. Most of the team was divided between the team, early investors and the Algorand Foundation Non -Profit Organization.

From the moment of launch, the algo release schedule has been seriously reviewed. Within the framework of the program for supporting early users, holders of relay units and developers Algorand Acclerated Vesting, 3.1 billion Algo distributed in 2020-21 years. In 2021, the amount of Algo in circulation increased from 3.11 billion to 6.97 billion.

According to the current plans, the remaining blocked coins will be distributed by 2030 as grants, awards for steaking, management and maintenance of relay units.

The remuneration for steaking goes to the wallets of Algo holders after creating each new block. The profitability of stakeing is about 6% per annum.

Who controls Algorand?

At the start of the project, management and technical development was carried out by the private company Algorand Inc. In 2019, Algorand Foundation was created in Singapore, which entrusted the functions of financing and development of the network, as well as training and support for developers.

Algorand Foundation is the major owner of Algo. The organization uses cryptocurrency to finance its activities and projects on the Algorand blockchain through accelerator programs.

In September 2021, Algorand Foundation from its own funds founded the Viridis Defi Fund fund with a capital of $ 300 million. The structure allocates grants to teams developing wallets, inter -meters and other ecosystem services.

In the fourth quarter of 2021, the Algorand blockchain began the transition to a decentralized management model, which allows all Algo owners to take part in making key decisions.

For this, the cryptocurrency holder must register as a governor (governor or “management participant”) and block the selected number of tokens for the entire three -month voting period. Voting participants are accrued by Algo for management in addition to ordinary staying awards.

What is the Algorand ecosystem?

Initially, Algorand developers oriented the blockchain platform to create decentralized solutions in different sectors of the real economy. The network began to be used in the fields of real estate, public administration, copyright, finance, for the issue of tokenized shares, etc.D.

The largest partnership of this period is the development of the national digital currency of the Marshall Islands based on Algorand. This was announced in March 2020 by SFB Technologies, engaged in the project.

In August 2021, Koibanx, specializing in asset tokenization, signed an agreement with the Salvador Government for the development of information infrastructure using Algorand.

With the development of Defi, NFT and Web3 segments in 2020-21, Algorand Foundation began to allocate funding for the development of private users of directions. DEFI projects such as Algofi, Yieldly, Folks Finance were launched; NFT markets ABRIS.Io, AB2 Gallery, Zestbloom.

Also, more than a dozen NFT- and P2E -IGR: Algorealm, AEGIR TACTICS, SK8, AlcheMON, COSMIS Champs and other. The game guild Algo Gaming Guild appeared.

The development of the Defi Exesist was helped by large funds for supporting Algorand projects launched in 2021: Borderless Algo Fund II in the amount of $ 500 million from the venture company Borderless Capital and $ 100 million from Arrington Capital.

How Algorand is developing?

At the time of writing, decentralized solutions on the Algorand blockchain use more than 700 organizations around the world.

In May 2022, the International Football Federation (FIFA) provided Algorand with the status of a regional sponsor and official blockchain platform of the World Cup in Qatar and the World Cup among women in Australia and New Zealand in 2023. On the basis of the network will create an official crypto cosiness of tournaments and release NFT.

In the same month, Algorand, along with Hivemind, purchased a digital music service Napster. In June, the parties announced plans to use a blockchain for launching Napster token and creating an ecosystem of streaming of music.

Algorand Foundation pays much attention to maintaining a “green” reputation: Algorand is positioned as the world’s first “carbon-negative” blockchain.

Special smart contract automatically distributes part of transaction commissions on financing forest restoration programs and alternative energy development. So the project compensates for carbon dioxide emissions.

In addition, Algorand collaborates with Climatetrade, which uses blockchain to create a global carbon loan market.

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