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Created by computer genius and Massachusetts Institute of Technology (MIT) professor Silvio Micali, Algorand belongs to the camp of those projects that were created by people with a serious academic background, which is a rarity in itself. Micali is the 2012 winner of the Turing award, an outstanding recognition in the world of computer science, granted to the future creator of Algorand for his work with his colleague, Shafi Goldwasser.
According to the Association for Computing Machinery, which grants the award annually, Micali is credited for his contribution to making cryptography a “more rigorous science” through work that summarized the ideas around some of the basic building blocks in the field. Today, we’ll take a look at the major projects and organizations that make up the Algorand ecosystem.
What is Algorand?
Algorand is an open-source blockchain platform designed to create a decentralized economy with no restrictions. After launching a testnet project in mid-2019 by MIT professor Silvio Micali, the Algorand team set out to solve a trilemma that almost every startup in the field faces: security, decentralization, and scalability. Algorand now has its own blockchain, which runs on an adapted version of the PoS – Pure Proof-of-Stake (PPoS) algorithm.
PPoS is based on the Byzantine Agreement consensus protocol. Compared to PoS, PPoS can be called a “more fair” system, because in this case, everyone with ALGO tokens in his/her account can be selected as a validator in the Algorand network. The number of tokens only affects the probability of getting selected.
Algorand’s blockchain also allows numerous assets other than ALGO to be serviced by it. These are also known as Algorand Standard Assets (ASA) and work roughly the same way as ERC20 tokens on the Ethereum blockchain. However, one of the main differences is that users must first manually agree to receive a certain token (a so-called subscription).
What problems does Algorand solve?
Algorand can solve a variety of problems, from creating decentralized exchanges to tokenization of assets. Perhaps the most striking example of Algorand’s practical use-case is the Tether stablecoin. Algorand and Tether entered into a partnership that integrated Tether into the project’s blockchain using Algorand’s ASA 2.0 technology. Compared to USDT on Omni, Algorand-based Tether boasts faster transaction speeds and relatively low fees, making the stablecoin suitable for micropayments.
Projects in the Algorand ecosystem
Circle is a financial services company that uses blockchain technology for its peer-to-peer payments and cryptocurrency-related products. Circle was launched in 2013 by Jeremy Allaire and Sean Neville. Circle started out as a consumer platform for peer-to-peer payments and cryptocurrency exchange. In 2018 the company acquired major cryptocurrency exchange Poloniex after the latter ran into some financial difficulties.
Algorand will integrate the USDC stablecoin, supported by Circle. This will allow people to easily transfer funds between traditional banks using Algorand’s blockchain. Algorand is supporting Circle and USDC in setting the stage for the development of a wide range of scalable, secure, and interoperable financial applications. Algorand also provides unprecedented speed with low transaction fees essential for stablecoins.
Cartan is a Cayman Islands-based consulting firm offering a full range of services, helping clients identify, develop, and implement complex market strategies. Experts in finance and technology analyze the latest industry data to provide clients with immediate insight and investment opportunities. Cartan partners with Algorand to further decentralize the Algorand network, create financial products on top of the Algorand network, and accelerate the adoption of Algorand in the Cayman Islands.
Founded in 2014, Ledger is one of the leaders in hardware cryptocurrency wallets production and in providing infrastructure solutions for cryptocurrency and blockchain applications. Headquartered in Paris, Vierzon, New York, and Hong Kong, the company employs over 170 professionals developing various products and services to protect digital assets for individuals and companies, including Ledger’s hardware wallets sold in 165 countries.
Ledger has added the ALGO native token to its list of wallet-compatible assets available on Ledger Live. This gives Ledger users the ability to store and engage in ALGO staking. Integration with Ledger Live provides storage compatibility with Algorand Standard Assets (ASA), giving ASA token holders an additional layer of private key storage security.
SIAE (Italian Society of Authors and Publishers), founded in Milan in 1882, is a public economic institution and membership base for copyright management. Every year SIAE issues more than 1.2 million licenses for the use of the organization’s protected materials, guaranteeing authors and publishers proper compensation for their work. SIAE also supports the Italian cultural and creative industries, contributing economically to numerous artistic initiatives, and backs various social events.
SIAE is using Algorand to develop a new open ecosystem for copyright management, made possible by Algorand’s high-performance blockchain platform. SIAE initially worked with Hyperledger but switched to the Algorand platform because of its decentralized design and scalable performance. Algorand’s PPoS protocol, which guarantees decentralization, scalability, and security, makes it particularly suitable for robust management of all the metadata and transactions needed for proper rights management. The collaboration between SIAE and Algorand will develop and strengthen copyright management tools and services to create new open and accessible solutions, further improving efficiency and mediation.
IDEX was launched by a group of cryptocurrency traders in late 2012 as an expanded and updated version of existing decentralized exchanges. It is an Ethereum-based DEX that supports ETH and ERC20 trading pairs. IDEX implements the benefits of smart contracts for digital assets p2p trading.
Stonize is an Italian FinTech company focused on transitioning to a more open financial system with a mission to make securitization accessible and transparent. Stonize’s platform facilitates the issuance, management, and transfer of relevant digital securities. It is collaborating with CNR, Italy’s largest research institute, to help develop innovations aimed at democratizing financial services.
Stonize will use Atomic Transfers and Atomic Smart Contracts in Layer-1 (ASC1) technologies to provide its clients with faster and more secure clearing and settlement processes. The Stonize team is working to improve the delivery and payment process by using Atomic Transfers for multilateral transactions and the ASC1 template for escrow.
Realio is a comprehensive blockchain-based SaaS solution for issuing, investing, and managing digital assets. Realio combines access to a decentralized (p2p) exchange with release/investment platform features to combine enterprise-grade blockchain solutions with institutional-level investment vehicles.
Realio tokenizes its network through RST, which aims to be the first truly hybrid security/utility token that offers ownership and profit shares in the network as well as staking possibilities. Realio leverages the simplicity of Algorand ASA as well as the speed and security of the network.
Orion Protocol solves some of the biggest problems in DeFi by combining the liquidity of the entire crypto market (CEX, DEX, swap pools) into a single decentralized platform. Orion Protocol is the first project to implement Dynamic Coin Offering (DYCO), a new token selling structure in which utility tokens are backed by US dollars for up to 16 months after Token Generation Event (TGE), and participants are eligible for an 80% refund after tokenization.
Orion joined Eterna Capital Venture Studio, an initiative led by Eterna Capital, Borderless Capital, and Algorand, to accelerate the development of startups creating solutions to problems in finance, exchanges, asset storage, and more.
Algorand is a new, relatively young blockchain, which means that its technology, while fresh, hasn’t yet undergone much testing in real market conditions. ALGO cryptocurrency will rise in value as significant news about new partnerships and major developments in the project ecosystem emerges. Investors may also see Algorand as a viable part of a cryptocurrency portfolio if they believe that proof-of-ownership blockchains that reduce the cost of participation in the blockchain (remember, as little as 1 ALGO in your wallet is enough to try and become a validator) will ultimately prove to be more successful on the market.