}
Ethereum is considered a benchmark for assessing the performance of any new blockchain. Though it’s a juggernaut, lately, there are a few that have threatened its throne. But none have shown promises like Algorand.
Algorand is a permissionless blockchain platform that uses Pure Proof-of-Stake (PPoS) consensus mechanism to offer enterprise-grade blockchain service.
In 2018, Algorand came up with one goal in mind - to rule the DeFi space, and two years later, it is proving that it means business. With periodic technology innovation and expanding reach, team Algorand has quickly established itself as the biggest challenger to Ethereum in the DeFi space.
#1. Constant Innovation and Tech Feature Addition
Algorand implements its feature set on layer-1, enabling superfast operation. The PPoS being stake-agnostic guarantees participation in block production and verification is neutral. The following features make Algorand a highly attractive proposition for DeFi usage -
- Mainnet speed of 1000 TPS
- Ultra-fast (4 seconds) block production
- Highly and linearly scalable network
- Great security due to inbuilt random selection process
- No-fork policy ensuring full block finality
- Enterprise-level infrastructure
Now, there are other blockchains as well that promise regular feature addition. But Algorand has taken this to the next level. Here are some beneficial features Algorand has introduced this year-
- Algorand Standard Assets (ASAs) - Directly developed on layer-1, the ASA feature allows various assets to be interoperable, secure, and grant customizable asset control.
- Atomic Transfer - Algorand introduced the first batched atomic transfer for every ASA-based asset.
- Algorand Smart Contracts (ASC1) - Algorand earlier offered stateless smart contracts. But this year added stateful smart contracts and brought both customizability and superfast solutions at cheaper rates - something Ethereum is yet to achieve.
- PyTEAL support - Developers now can write their code in popular Python language while PyTEAL compiles it in TEAL automatically, Algorand’s native language.
- Rekeying - This feature enables users to alter authorized spending and security against a single long-running public address. The built-in spending policy further enables a single key to multi-signatory key conversion to a stateless smart contract.
- Fast Catchup - Now, developers can work on their DApps without waiting for the entire Algorand blockchain to sync.
#2. Serial Partnering
Algorand’s partner profile is impressive. Within just two years, it has managed to form over 40 partnerships, out of which 19 belong to the DeFi arena.
Among the early adopters of Algorand technology, some partnerships proved to be the pillars catapulting Algorand’s DeFi dream forward.
- The Stablecoin Duo - USDT and USDC are the top two stablecoins, holding over 90% majority market share. Realizing the technological potential of Algorand in DeFi, Tether teamed up with the firm in February 2020, followed by Circle in June.
- International Blockchain Monetary Reserve (IBMR) - IBMR.io chose the Algorand platform to build the Southeast Asia Microfinance Platform (ARC.one) and ARCC stablecoin to financially include the working-class of Southeast Asia.
- Central Bank Digital Currency (CBDC) - To develop Marshall Islands’ CBDC called Marshallese Sovereign (SOV), SFB Technologies picked Algorand to build the underlying blockchain infrastructure.
- IDEX - IDEX plans to advance its next-gen solutions using the Algorand platform.
Algorand has formed other meaningful partnerships showcasing its DeFi outreach.
- Meld - Meld is one such partnership where Algorand’s ASA feature helps tokenize the Australian gold reserve and trace it across the supply chain using stablecoin.
- Realio - Leveraging Algorand’s ASA, speed, and security, Realio will offer a hybrid utility/security RST token to join enterprise-grade blockchain solutions with institutional-quality investments.
- Verady - The Verady-Algorand collaboration would allow Algorand customers to have internal accounting and auditing features. Infra projects will benefit from this enterprise-grade financial management feature.
- Derivative Trading - Entering the digital security space and trading, Securitize and Stonize are two such FinTech firms partnered with Algorand to offer decentralized digital security services.
Algorand’s news board reports it has further added essential DeFi partnerships to its list. Here are a few -
- Archax - FCA-authorized digital securities exchange, brokerage, and custodian Archax has teamed up with Algorand to develop innovative smart financial products for trading on its platform.
- Cred - Global lending and borrowing platform Cred has partnered with Algorand for DeFi advancement. Algorand users will be able to earn yield through Cred’s DeFi and CeFi channels and across its partner network.
- MESE.io - Utilizing the nominal transaction fee on Algorand, MESE.io has built its blockchain-powered micro-equity stock exchange. This enables users to hold a small percentage of an expensive tech stock like Amazon, Google, Tesla, Microsoft, Apple, etc.
- Ledger Support - Ledger Live, the software by hardware crypto-wallet maker Ledger, now supports ALGO token and Algorand’s ASA feature.
#3. The Algorand Team
Silvio Micali
The Turing (2012) and Gödel Prize-winning (1993) cryptographer and MIT professor is a ‘household’ name in crypto space. His celebrity status and proven glorious track record help assure institutions and firms regarding Algorand’s robust and innovative technology. Leading from the front, he ensured that Algorand contributes nothing but innovation, especially to the DeFi space.
The Star-studded Advisor Panel
Understanding the complexity and opportunity involved with leading the DeFi space, Algorand seeks to get advice from the best.
- Joseph Naggar, Economic advisor - He is a partner at GoldenTree Asset Management and ex-MD of Morgan Stanley. He’s also on the advisory board of the MIT Center for Finance and Policy.
- Darius Sit, Trading structure and Strategy advisor - He is the co-founder and Managing Partner at QCP Capital, Asia's largest crypto-asset trading firm.
- Christian Catalini - One of the principal investigators of the MIT Digital Currencies Research Study.
- Shafi Goldwasser - Another Turing Award and Gödel Prize-winning renowned expert in complexity theory and cryptography.
- Paul Milgrom - Algorand’s latest inclusion of renowned Economist Paul Milgrom in its advisor panel strengthens Algorand’s position towards dominating DeFi. He is Shirley and Leonard Ely professor of Humanities and Sciences in the Department of Economics at Stanford University. Milgrom is named Distinguished Fellow of the American Economic Association in 2020.
Conclusion
It is certain that Algorand is ahead in the DeFi game, bringing the fight directly to Ethereum’s kingdom. With every passing quarter, Algorand is proving that it has no intention of slowing down. Observing Algorand’s progress in the three major fields of innovation, partnership, or team building, it’s safe to expect a new ruler for DeFi.