Algorand implements Smart Contracts at Layer 1
Algorand is a Boston-based open-source software company working towards building a borderless economy. Backed by a strong team that is led by Turing award winner Silvio Micali, Algorand recently attracted a lot of institution interest since it leverages solid engineering and cryptographic principles. Lately, there have been three significant changes in the Algorand ecosystem that has got the community talking:
- Relay node rewards pause extension.
- Reach and Algorand.
- Launch of Algorand Smart Contracts.
Relay node rewards pause extension
Algorand had executed an EIP called “EIP-09092019PC” aka “The Proposal,” to initiate a 30-day suspension of daily rewards for relay node runners. Relay nodes are critical to the overall ecosystem since they enable the nodes to connect and interact with each other. To make sure that relay node runners are rewarded for their services, Algorand used to release a high amount of ALGO tokens per day into the ecosystem. Many in the community felt that this was detrimental to the overall system since:
- It causes the supply/demand equation for the ALGO tokens to go haywire.
- A whale could potentially eat up these tokens and dump them all in an Exchange. In fact, before the ban, these whales started anticipating these rewards and started dumping ALGO – tanking the price as a result.
The community voted positively on the proposal and the relay node rewards were paused for a 30-day period.
It looks like the community has again voted to extend the pause period by a further 30 days. This should give the community and the Algorand Foundation sufficient time to create an improved plan for relay rewards that will be congruent with the long-term vision of the Algorand network.
Reach and Algorand
Reach is a platform that lowers the barrier to entry for DApp developers. It provides a comprehensive environment for junior developers to build useful and safe DApps without years of experience and deploy them easily on different blockchain networks. It does so by abstracting away the complications of the blockchain and automatically formally verify the output of the entire application. This way it’ll be possible for developers to assure guarantees regarding the performance of their dApps.
According to a blog post by Reach:
“Algorand and Reach Platform have a shared vision for real-world application and adoption of blockchain through performance, developer enablement, and simple deployment for applications of the future. Together, the organizations will be working together to support efforts for faster and stronger blockchain development.”
Launch of Algorand smart contracts
Algorand also announced the launch of Algorand Smart Contracts at Layer 1 or ASC. ASCs can be used for hosting a variety of applications like:
- Post-and-sale transactions: Helps in automating sales so that anyone can purchase an item from you without your direct involvement.
- Securitized loans: This will enable you to make a loan secured by the collateral of the borrower. If the borrower fails to make the payments as per a pre-determined payment schedule, then you will automatically own the collateral.
- Crowdfunding: Collect funds for a project without getting directly involved. You just need to have a preset funding target. If the target is not set, then the contract will refund all the money collected.
- Accredited-Only Transactions: You want only qualified investors to execute a certain type of transaction? You can do so without having to personally monitor each and every transaction.
- Multi Multi-Sig Wallets: A multi-sig wallet is a special form of cryptocurrency wallet which can be maintained and used by multiple people. These wallets usually have a “k-of -n” nomenclature system. Meaning, if a wallet is owned by five people, and requires at least three to operate it, then its called a “3-of-5” multisign wallet. With ASC, you can create “multi multi-sig wallets” where the wallet is operated by multiple sets of groups. So in a k-of-n multi multi-wallet, not only can any k out of the n public keys of a given set A can authorize transactions (an ordinary multi-sig wallet), but also any k’ of the n’ of the public keys of another set B, and so on.
NOTE: ASCs can be applied to either individual transactions or accounts, respectively yielding ASC-transactions and ASC-accounts.
Algorand is one of the most promising projects in the crypto space which has recently collaborated with the likes of Bank of America, IDEX, AssetBlock. The platform has a first-of-its-kind permissionless and pure proof-of-stake protocol, which allows them to provide a high degree of scalability, open participation, and transaction finality. With the official launch of smart contracts and the partnership with Reach, it will be interesting to see what all Algorand does in the near future.
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