As ICON builds out blockchain interoperability connections through its groundbreaking Blockchain Transmission Protocol (BTP) technology, it is useful for Iconists to become familiar with compatible blockchains. This article is the fifth part of a ‘BTP series’ in which we take an introductory look at all the blockchain networks that will be joining the ICON community. Be sure to also check out the other articles in the series:
Although development of BTP has not yet been finalized, a “lite” version of the technology called ICON Bridge will soon be launched, finally opening the doors to interoperability between ICON and other BTP-compatible blockchains. In addition to the blockchain projects linked to above, ICON will also be bridging to the Algorand blockchain.
Let’s take a look at Algorand and get to know what it’s all about.
What is Algorand and Why is it Great for BTP Developers?
Algorand is a base-layer blockchain (like ICON) that was built to solve the problems of speed, decentralization and security common in most first and second-generation blockchains. It is also a global, carbon neutral blockchain sometimes referred to as an “Ethereum killer” (although it of course remains to be seen which blockchain will end up rightfully claiming that title, if any).
Algorand’s native cryptocurrency is the $ALGO token. Notably, Nasdaq recently named ALGO as a cryptocurrency set to explode in 2022. Because of the way Algorand rewards all token holders instead of just block producers, anyone with ALGO coins can expect to automatically earn about 7.5% annual percentage yield (APY).
One great thing about Algorand that makes it a perfect network for ICON developers to focus on is that the Algorand Foundation has formally committed to BTP integration through a grant partnership. While there’s no doubt that all the BTP integrations are moving forward, it’s certainly nice to see Algorand publicly expressing their eagerness to bridge with ICON.
Algorand also has a number of technical aspects that make it a strong blockchain for BTP developers to integrate in new projects:
Algorand’s star technology is its unique Pure Proof of Stake (PPoS) consensus infrastructure, which is what makes it so scalable, sustainable and eco-friendly. It achieves this in three primary ways: by being cost efficient (costing only 1 ALGO as the minimum stake to participate as a node or a relay), by sharing validator rewards with all token holders and by using random selection from all eligible nodes to determine who validates and approves each new block on the chain (the more ALGO one holds, the higher the chance of being selected).
Algorand’s blockchain also has a unique two-tiered structure. Its first layer can handle basic smart contracts, asset creation and atomic swaps like nobody’s business. But Algorand also has a second layer that allows for easier Dapp development and more complex off-chain smart contracts, which is another feature that enables Algorand to process transactions more efficiently than Ethereum.
Developers can make use of a unique protocol called Algorand Standard Asset (ASA), which allows token creation on the network. It also enables the transfer of existing tokens to Algorand, which can be very useful for porting Ethereum-based coins and stablecoins to avoid Ethereum’s harsh gas fees. As a testament to the blockchain’s strength, the Marshall Islands has chosen Algorand to host the nation’s own central bank digital currency (CBDC).
Also of benefit to developers is the great developer portal that Algorand maintains. Seriously, these guys are professionals, and it shows!
The company is dedicated to eco-friendliness on all levels. In addition to Algorand’s PPoS being carbon neutral, its internal culture and values and external partnerships also reflect the ideal of creating a green blockchain.
While many other blockchains are focused on fun and games and NFTs, a larger percentage of projects on Algorand are dedicated to doing seriously impressive work. A few of the most popular projects built on Algorand include (in no particular order):
- Planet Watch: a decentralized global air quality monitoring network
- Dust Identity: uses nano-engineered diamonds to create original identity layers on physical objects that link to the blockchain
- IDEX: a decentralized smart contract firm and one of the most advanced DEX (decentralized exchange) projects in the world
- Republic: an alternative investments platform with access to a wide range of investment opportunities including startup equity, e-sports, crypto, video games, real estate, Main Street investments and more
- ARCC.one: a microfinance platform functioning as a supplementary platform to the Asia Reserve Currency Coin, aiming to provide financial inclusion opportunities to 300 million people in Southeast Asia
- Tinyman: Algorand’s first DEX with an automated money maker (AMM)
- Meld: a tokenized gold investment platform
- Yieldly: a DeFi protocol with liquidity mining, no-loss prize games, multi-asset staking and cross-chain swapping
- ANote Music: an NFT marketplace built to connect musicians with their audience
- Orion Protocol: an in-development DeFi portal that allows users to access all kinds of markets directly with a wallet, without extra accounts or KYC
- Lofty AI: a tokenized real estate investing platform
Who is Behind Algorand?
Algorand was founded in 2017 by Silvio Micali, an MIT professor and Turing award-winning computer scientist. Algorand’s mainnet and token were launched in 2019.
Algorand is run by a Singapore-based non-profit organization called the Algorand Foundation, which operates as an umbrella organization and includes the core blockchain research team led by esteemed cryptographer Tal Rabin. The Algorand Foundation also commissions a for-profit software company named Algorand, Inc., which is based in Boston and manages network development.
To learn more about Algorand, visit their website or Twitter page.