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Algorand Ecosystem (ALGO) – Many retroactive opportunities
Does DeFi on Algorand really have potential? At what stage is the Algorand ecosystem? We will find out through the next article!
In recent times, ecosystems have continuously launched incentive packages for users to stimulate the development of the ecosystem.
These stimulus packages will have the effect of enticing developers and users into the ecosystems, and one of the ecosystems with incentives packages in the past is Algorand.
To help you keep up with what is happening in the Algorand ecosystem.
I will go with you in turn through the arrays in this ecosystem, to have the most overview of the system, thereby looking for opportunities investment association.
Does DeFi on Algorand really have potential? And what stage is DeFi on Algorand at? We will find out through the next article!
Algorand Blockchain Overview
Algorand is a decentralized blockchain created in 2019 by MIT professor Silvio Micali, with the aim of solving the problems of current platform blockchains at the same time, that is, scalability, decentralization and security level.
We see that Algorand uses the Proof of Stake consensus mechanism to create transparency, safety and high speed for the platform, ensuring that the network is truly in a decentralized state.
As a permissionless blockchain, Algorand avoids this blockchain becoming centralized and power being concentrated in certain validators like Binance Smart Chain,…
Highlights of Algorand
Salient features of Algorand’s Blockchain include:
- Trust: Algorand’s decentralization and POS consensus mechanism will help ensure reliability for users.
- Transparency: Anyone can create transactions and check previous transactions, because this is a public blockchain.
- High transaction speed, meeting the needs of users to make transactions almost immediately, high scalability.
- To ensure Permissionless (anyone can participate), Algorand’s Blockchain network will only require users to own a not too large amount of tokens to participate. This will attract and create conditions for many people to participate.
In addition, Algorand has many big investors investing in the project, including famous names in the crypto village such as Multicoin Capital, NGC, Eterna,…
Outstanding parameters
Outstanding parameters of the Algorand blockchain:
- Consensus Mechanism: Proof-of-Stake.
- Virtual Machine: Algorand Virtual Machine (AVM).
- Validators: 426.
- Governance: On-chain.
- TPS: 1,000.
- Average transaction cost: $0.001.
- Number of projects: more than 190 projects.
- Marketcap: 10 billion dollars.
- Status: Mainnet since 2019.
History, current situation and roadmap
Algorand has gone through several testnet and mainnet phases in the past:
- Public TestNet Release (April 2019): Private testnet phase, with supported programming languages including Go, JavaScript, and Java SDKs.
- Algorand 1.0 Launch (Mainnet Launch) (June 2019): Mainnet after the Dutch auction took place, with $60 million raised. The team also opened the code open-source.
- And next is Algorand 2.0 release (November 2019): Algorand 2.0 has many changes with the first version.
- Including: introducing the Algorand Standard Asset ASA token standard on Algorand, introducing Atomic Assets and Algorand Smart Contracts (ADC1) to allow developers to create applications on Smart Contracts.
- Algorand v2.0.2 release (December 2019): The update significantly increases scalability, decentralization, and many other important parameters.
DeFi puzzle pieces on the Algorand ecosystem
In general, the Algorand ecosystem is still quite new and has few applications, with the number of pieces in each array is still not much.
You can take a look at the picture of Algorand’s ecological overview below.
Algorand Ecosystem Overview
Algorand’s ecosystem is generally quite complete with its components.
Each important segment already has a few key pieces, enough to meet the necessary conditions for development in the near future.
However, you should remember that this is only a necessary condition, and for the system to grow strongly, other sufficient conditions are needed, which I will explain more clearly at the bottom of this article.
Next, let’s take a look at each piece of the Algorand ecosystem to get an overview, and then search for important keywords to identify investment opportunities.
Stablecoin
In any ecosystem, stablecoins are always one of the most important pieces – every platform can only really explode when there is a stable foundation of stablecoins.
Indeed, for example, before the Avalanche system exploded, USDT agreed to issue stablecoins on this platform, the Solana ecosystem also expanded extremely strongly with the trend of stablecoin farming on this platform with the two leading projects: Saber and Sunny,…
Looking at the stablecoin puzzle pieces already on Algorand, you can see that the ecosystem has all the necessary conditions to grow: there are two strongest centralized stablecoin pieces on the platform, which are USDT and USDC.
Here’s a closer look at the data of these stablecoins on the Algorand platform:
In total, there are about $440 million in stablecoins on the Algorand platform – a huge number for any platform.
To compare with other ecosystems, the number of stablecoins on Solana is $3.3 billion, on Avalanche is about $1 billion, Terra’s UST is 2.6 billion,…
You can also see that the amount of stablecoins on Algorand has reached an impressive number, and this amount of stablecoins has been able to form a solid foundation for the development of DeFi on this platform.
However, on the platform there is still no DeFi stablecoin application like MakerDAO, or Oin Finance,…
Therefore, the level of capital usage on the Algorand platform is still not high.
But with the ecosystem’s relatively high value DeFi stimulus package, it is possible that this application will soon appear on the platform, thereby boosting the capital utilization of this blockchain asset to a high level than.
You can also look for new projects in this area to invest in, but remember: in addition to properly handling the platform’s problems, the project must also do many other stages well to be an investment profitable.
DEX
Currently, on the Algorand ecosystem, there are decentralized exchanges including:
- Tinyman DEX (under testnet): tinyman.org. The project has successfully raised $ 2.5 million in early October 2021 with the participation of funds such as Borderless Capital, Arrington Capital. The project currently has a TVL volume of 30 million USD, with the latest 24h volume being 4 million – 13% of the total TVL.
- IDEX – cross-chain DEX, which runs on Algorand (not working on Algorand yet): twitter.com/idexio
- Algodex – DEX Orderbook on Algorand (testing net): twitter.com/AlgodexOfficial
As you can see, most of the DEXs on Algorand are either testingnet or not working on Algorand yet.
Therefore, TVL on the basis of the most important part of this Defi is currently concentrated in a single application.
The Tinyman project has not launched a token yet, but just launched a product, so you can use the product to wait for the airdrop from the project.
As you can see, when the most important component of the ecosystem is not complete, DeFi on Algorand certainly cannot develop and explode.
In other ecosystems, for DeFi to thrive, it is always necessary to have the launch of mainstream DEXs: Solana has Raydium, Near has Ref Finance, Avalanche has Pangolin and TraderJoe, Terra has TerraSwap,…
However, because DeFi on Algorand has not yet developed, it is possible that the investment opportunity in this segment on Algorand will be very large and very potential.
If the project can introduce the first DEX and attract liquidity with effective liquidity incentives, they will lead the ecosystem – just like Ref Finance did with Near Ecosystem recently.
Therefore, you can closely monitor DEX projects on Algorand to find testnet opportunities, mainnet look for retroactive in projects that have not yet issued tokens, and native on Algorand like Tinyman (because most of the projects are in the stage of development testnet).
Learn: What is Mainnet & Testnet? 03 steps to do a basic Testnet
The infrastructure
In terms of infrastructure, the infrastructure for DeFi users has appeared relatively complete with efficient explorers such as Algorand Explorer, Algoscan, Bank on Algorand…
Regarding the Oracle solution, the ecosystem has cooperated with Razor Network to provide offchain data on the onchain, to promote the development of Defi on the ecosystem.
And more importantly, in the Bridge segment, there have been three projects to make Bridge to Algorand: Algomint, Swingby and Yieldy Finance.
- Swingby is a project to bridge BTC and ETH onto other blockchains but does not work on Algorand yet.
- Algomint is a bridge project but is at the testnet stage and requires KYC to use the product – an element that DeFi users do not feel comfortable using.
- Although they do not directly perform KYC work, but through another reputable KYC service provider, this is still a big barrier to bringing money into the Algorand ecosystem easily.
- Although Yieldy Finance has come into operation, it helps to bridge assets from Algorand to ETH and vice versa easily (ERC-20 assets), but there is no way to track data to know the amount of assets that have passed. How much is this bridge?
Most of the projects are on testnet or don’t have a dashboard to track performance, so I won’t give a detailed comment, and will update more when I have more information.
Lending
The lending array on Algorand currently has 2 pieces of the puzzle working natively on Algorand:
- Folks Finance (currently inactive and not on testnet): twitter.com/folksfinance
- Algofi (now launched testnet): test.algofi.org
As you can see, both projects are currently not releasing a mainnet product, so the next step of the ecosystem will be to put these two pieces into official operation.
Both projects are new projects and have just started operating this year.
You should try using the project’s testnet, to have a chance to get retroactive of the first native lending puzzle pieces first on Algorand.
NFT
The NFT array on Algorand currently has quite a few pieces:
- AB2 Gallery: NFT Market on Algorand, now in operation but only in Open Beta.
- Smilecoin: Project about Web3 and Gaming on Algorand.
- Zestbloom: NFT Market on Algorand, running testnet.
- AlgoWorld: NFT project on Algorand.
- NFT Explorer: Explorer for NFT on Algorand.
In terms of infrastructure, the NFT array above Algorand already has quite a lot of necessary pieces for the development of this array such as a number of marketplaces, explorer tools for NFT,…
However, the amount of NFT transaction volume and the number of NFT projects above is still not much.
Maybe because P2E games have not yet developed on the ecosystem, or the ecosystem cannot create NFT “hype” like on other ecosystems other attitude.
Projections
Currently, you can see that the number of testnet projects on Algorand is still very high, and most of them have not been put into operation and do not have tokens.
Therefore, I think the opportunity to invest in projects on Algorand is mainly the opportunity to testnet and use the product early to support the project, get retroactive.
DEX
Going forward, it will be necessary to have AMM DEXs operating on Algorand, with a structure similar to Uniswap V2, to lead DeFi in the ecosystem.
Some potential faces can be mentioned are Tinyman, Algodex (Orderbook) – native DEX projects on the system and not yet issued tokens.
You can also look for investment opportunities here.
Lending
Similar to DEX, Lending on Algorand also has no mainnet projects and has an initial amount of TVL.
You should also pay attention and testnet the project, and follow closely to find investment opportunities in the initial pieces of the ecosystem.
Native lending projects on the platform include: Folks Finance, Algofi.
Stablecoin
Currently, all stablecoins on Algorand are centralized stablecoins: USDC and USDT.
Therefore, it is possible in the future that stablecoin DeFi protocols will appear on the ecosystem to improve the capital utilization level in the system.
You need to observe more to seize the opportunity.
Epilogue
Algo is currently trading on exchanges: Binance, Kucoin, Houbi.
The input wave into the ecosystem is the wave that every investor wants to catch, but to catch the first wave, it always needs close monitoring, understanding and sensitivity.
If you have any other questions or comments, don’t hesitate to comment below to discuss with idolmeta.net!
