As 2021 winded down, we started identifying the cryptos that could break out in 2022. One such name that received considerable speculation is Algorand. First, the performance of Its native token, $ALGO, has already increased by 222% over the last 1 year.
Second, the Total value Locked in the DeFi protocols of Algorand that have also gone up by over 2000% since June 2021. Therefore, in this video, you will discover we think $ALGO could break out in 2022.
What is Algorand?
Algorand is a platform where anybody can generate and trade value in an efficient, transparent, and safe manner. This means that this platform provides decentralization, scalability, and security. Therefore, developers may now build on a reliable basis in which they can have faith.
Its consensus process is “pure proof-of-stake” and permissionless. Within a completely decentralized network, it offers full participation, protection, and speed. Also, Algorand had the following milestones:
- 17m addresses.
- 6m active addresses in Dec 2021.
- Based on the steep uptick in its development activity as compared to major blockchains like Ethereum and Avalanche, Algorand holds the potential to become the next Solana
Reason 1: Features
One of the most important features that Algorand has is that it was designed from the start to be a green blockchain with an emphasis on environmental effects. Algorand is now one of the world’s first carbon-negative, layer-1, public blockchains.
However, Algorand also has other important features because of which it’s considered to be the next Solana. Today, an average of 500,000 transactions per day are posted on the Algorand chain. Also, more than 500 companies are busy developing applications on Algorand, taking advantage of its unique layer-1 smart contracts.
All this is happening because 2022 is supposed to be a massive upgrade year for Algorand. Here is why:
- The number of transactions per second (TPS) will grow from 1,000 to 46,000. If it’s able to achieve that, Algorand could easily surpass Solana which is delivering a 1753 TPS and is facing crashes due to DDoS attacks.
- The Block finalization time will shrink from 4.5 to 2.5 seconds.
In other words, Algorand could become an ideal platform for DeFi development, and its TVL which is already up 2000% would just skyrocket.
Why did we choose to build on #Algorand? Because a service is only as good as the tech it's built on, and we are aiming for speed, reliability, and flexibility.
No outages, slow transactions, or eye-popping gas fees. With Algorand, there is a better way.https://t.co/pbmJLVURyb
— NFDomains (@NFDomains) January 7, 2022
On the other hand, Algorand has its virtual machine called AVM – Alogrand Virtual Machine. This allows the development of more powerful smart contracts by supporting sophisticated dApps in a fast, secure, cost-effective, and scalable way. With these updates coming the dApps will become even faster.
Therefore, the AVM will make it easier for newcomers to develop programs on top of Algorand’s chain. However, it’s not compatible with the Ethereum Virtual Machine and this could work against Algorand because other DeFi chains like Binance rose in popularity.
Reason 2: Algorand Wallet
- Hold, transact and send your assets in one place:
- Automated rewards by holding $ALGO tokens.
- Customization, among others.
Reason 3: Tokenomics & DAO
$ALGO, Algorand’s native token, is currently trading at $1.40 with a marketcap of $9 billion. We have seen many crypto investors question $ALGOs tokenomics. Let’s take a look at it and understand it.
Algorand is 2 years old, it has a schedule for releasing its tokens over 10 years over which it will release its total supply of 6.89 billion $ALGO tokens. Nowadays, 6.5 billion of them are already in circulation. However, 3 billion $ALGO is locked up in an online consensus stake.
On October 1st, the Algorand ecosystem moved to a decentralized governance model that lets $ALGO holders earn rewards for participating in Algorand’s decision. In simple words when all these mechanisms come into play $ALGO can enjoy a price squeeze.
Reason 4: Algorand In DeFi
With 80 million transactions per day, Algorand’s fees cost $0.001 per transaction with zero downtime from the mainnet launch. Also, Algorand has a purely PoS decentralized consensus, which makes it perfect for developing DeFi protocols.
That’s why the Algorand Foundation is putting big efforts in investing in the next generation of DeFi infrastructure that includes:
- Stablecoins like USDT, USDC, Digital Euro.
- DEXs like tinyman.
- ETH, BTC, BSC, ADA, SOL, and DOT token bridges.
- Yield farming like Yieldly.
- DeFi music-NFT lending like Opolous.
- NFT Marketplace like ZestBloom.
- Synthetic assets like Smile coin.
Reason 5: Use Cases
Hundreds of businesses are now working on the platform, including fintech, startups, financial services, institutions, and defi. We are currently building on Algorand.
Here are some of the most famous projects that are using Algorand’s technology:
- Marshall Island’s CBDC.
- Drone Racing League (The first Play to earn game to Algorand.)
“We’re excited to create a new thrilling digital drone racing game with @DroneRaceLeague and @xPlaygroundLabs that will enable fans everywhere to own and monetize their drone racing experiences.” –@wsford
— Algorand (@Algorand) January 6, 2022
Reason 6: Competitors Risk
Nowadays, many PoS blockchains like Cardano, Solana, Avalanche, BSC, and Polkadot are developing a robust ecosystem and have exciting technical features.
However, what makes this platform different from them is that its use cases are very prestigious, which means that many important tech companies worldwide are interested in putting Algorand’s software to develop their businesses. This is one of the most influential and sustainable ways to increment the value of a blockchain.
But remember we talked about not being EVM compatible? This could be a possible drawback until some dApp building on Algorand builds a bridge for EVM – AVM compatibility. However, apart from that, we see a lot of potential in Algorand’s technology. Whether it will translate into price action or not.
But remember we talked about Algorand not being EVM compatible? This could be a possible drawback until some dApp building on the platform builds a bridge for EVM – AVM compatibility. But apart from that, we see a lot of potential in Algorand’s technology.
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