Algorand’s Collaboration Story: The Fuel of Its Ascend
Algorand entered the blockchain space in the year 2017 when Ethereum entirely dominated the arena. Though it was not just another name like the others, by 2020, Algorand’s acquired over 18 collaborations and 34 use cases – a great achievement within the timeline in a crowded market. Also, the increased pace of attracting partnerships clearly demonstrates Algorand has indeed delivered what they promised. This supports the immense potential it has to retain the growth curve upward.
The success attributes to the man leading the team and the unique features it promised in their white paper. Understanding their importance is the key behind all these lined-up partnerships. So, let’s start with those first.
Silvio Micali – The Pied Piper of Algorand
Behind success stories of various blockchain projects lies brilliant developers. But rarely does someone brilliant as well as highly celebrated decides to develop a blockchain – that’s Silvio Micali for you.
Admired for his extraordinary works in cryptography, he won both the RSA prize and the prestigious Turing Award in 2012. For his important contribution to computer science, he was awarded the Gödel Prize in 1993 and ACM fellowship in 2017.
His research focuses on pseudorandom functions, public-key cryptosystems, digital signatures, oblivious transfer, and secure multi-party computation to name a few. Micali works as a professor and a computer scientist at the electrical engineering and computer science and Artificial Intelligence Laboratory at MIT.
Algorand’s Unique Features
The consensus mechanism Algorand uses is called Pure Proof of Stake (PPoS). Through a lucky draw process, it randomly selects block producers to keep their identities hidden.
Algorand offers an unprecedented balance between the following features –
- Speed and Throughput – The draw is near-instant, and block production takes just about 4 seconds to complete. This enables the mainnet to deliver a throughput of over 1000 TPS.
- Scalability – Since the lucky draw process is entirely independent of each other, it simultaneously carries out numerous draws on the network. This results in a linearly scalable network.
- Security – The complete random selection ensures all data are tamperproof. Also, the stake size-independent selection process adds a security layer against draw manipulation.
- Decentralization – The algorithm selects nodes and block contributors randomly, therefore guaranteeing a high degree of decentralization.
Major Partnerships of Algorand
Algorand’s vision of a decentralized, borderless economy can only be realized if fintech firms around the world adopt the platform. Therefore it offers an enterprise-level solution through its permissionless, open-source protocol.
Let’s discuss some partnerships to check whether it has managed to do so.
IDEX – Decentralized Exchange Collaboration
Built on the Ethereum blockchain, IDEX is the leading Decentralized Exchanges (DEX) for crypto trading. Its trustless, secure platform is capable of multiple simultaneous trading in real-time and offers zero-fee cancellation.
About the Project:
As part of Algorand’s portfolio expansion program, using its $200 million Algo VC fund IDEX was selected for investment.
Being an exchange, IDEX must list all major in-demand crypto coins and explore leading networks where a bulk of trade occurs. Given Algorand’s rapid and steady rise, IDEX is attuned to partner with the blockchain specialized for fintech.
Algorand’s speed, scalability, and decentralization will attract various global companies, therefore increasing its token trading. Partnering with such a network means more trade opportunities for IDEX, leading to a true borderless economy. Algorand helps the following ways –
- Base-level integrated features – Algorand offers features such as asset tokenization, full finality, programmatic transfers all at layer-1.
- Offloading IDEX’s smart contract complexities – With Algorand’s upcoming feature addition, IDEX can delegate many of its smart contract complexities onto the blockchain’s in-built facilities.
- Support for the decentralized economy – This means developing the required financial tools and services to support that.
Both Algorand and IDEX seek to utilize and enhance each other’s capabilities.
IBMR – Southeast Asian Macroeconomic Development
The International Blockchain Monetary Reserve or IBMR.io is a social impact economic development reserve and advisory seeking to improve the social condition for the urban working-class in Southeast Asia.
About the Project:
IBMR.io aims to develop new decentralized macroeconomic development structures using the power of blockchain infrastructure. Partnering with Algorand, they have adopted the following method to solve the issues –
- People can earn crypto-tokens by reporting various social issues like corruption, restrictions to commerce, utility bills, traffic jams, etc.
- Provides access to accounts, credit, investment, and insurance facilities using the token they earn solving the lack of banking service tailored for them.
The collaboration has given birth to ARCC.one, the Southeast Asia Microfinance Ecosystem Platform on the Algorand blockchain, and the ARCC (Asia Reserve Currency Coin) token.
- ARCC token utilizes the Algorand Standard Asset (ASA) functionality to tokenize and represent itself on-chain.
- Algorand infrastructure empowers IBMR.io to increase and preserve the ARCC liquidity via a licensed hedge fund.
- The token can also be used to fund different community infrastructure projects.
Sinjin David Jung, Founder and Managing Director of IBMR.io, said,
“After months of discussion, it was clear that Algorand’s strong interdisciplinary approach to monetary economics, technology, and ecosystem focus was beneficially aligned with our own social impact mission for empowerment through the creation of the world’s first micro asset, ARCC.” He added, “We’re excited to be leveraging what we see as the best blockchain tech and applying it to a new structural solution for the inclusive economic development of emerging markets.”
Marshall Islands’ CBDC Project
The New York-based SFB Technologies specializes in developing the necessary blockchain infrastructure to combine digital currencies with mainstream regulatory compliance.
About the Project:
The Marshall Islands is all set to develop its first national digital currency, Marshallese sovereign (SOV), as per its Central Bank Digital Currency (CBDC) plan. The country hired SFB Technologies to build the infrastructure needed once the country identified the need and benefits of having its own CBDC besides its regular currency USD.
The SOV operation needs to be based on an underlying blockchain. After extensive market research, SFB Technologies finally selected Algorand as the underlying tech platform from a pool of leading blockchain options.
A CBDC, transacting on high volume daily, requires speed, scalability, and security – all of which is the forte of Algorand. Also, the platform offers two features that are crucial for the CBDC’s operation –
- Transaction finality – Thanks to its PPoS algorithm, Algorand guarantees no forking. This means every block produced remains on the chain forever.
- Critical compliance controls – Algorand is built with enterprise-grade infrastructure capability that allows various customization and control over compliances.
Explaining their decision to select Algorand, the co-founder and CTO of SFB Technologies Jim Wagner stated that Algorand has the functionality required to issue, manage, and distribute the SOV on a global scale. The fact that it has already powered several mainstream use cases and offers unique features warrants that the SOV will be developed on a secure scalable platform.”
Tether – First Stablecoin on Algorand
Tether is the first stablecoin launched in 2014 to challenge the legacy financial system and is currently the most extensively used stablecoin by market cap. Also known as USDT, it is a fiat-pegged stablecoin.
About the Project:
Tether trading has so far been available in Ethereum, EOS, Liquid Network, Omni, and Tron. To increase its coin usage and customer outreach, the firm is looking for expansion. Now, Tether coin will be available on Algorand.
Large volume stablecoin trading asks for speed, scalability, security, and infrastructure. Tether has recognized Algorand’s feature set in tune with theirs and, therefore, how much volume of trade it can contribute.
Algorand brings the following benefit to the table for Tether –
- Faster settlement – Due to instant payment confirmation and around 4 seconds of block confirmation time
- Reduced counterparty risk – PPoS’s random selection process confirms it
- Tokenization and customization – Algorand Standard Asset (ASA) technology grants the ability to tokenize and issue customizable assets
- Micropayment facility – Since Algorand offers zero base-level transaction fees
- Solid infrastructure – Algorand offers enterprise-level infrastructure specifically designed to handle fintech needs.
Describing Algorand ecosystem as a wonderful opportunity for Tether to further contribute to blockchain interoperability, Tether CTO Paolo Ardoino said,
“We are very excited about the potential this enables for other projects in the decentralized ecosystem and we eagerly await working closely with many of them in the future.”
Praising the Algorand team’s capability, he stated that both companies share a dream of developing next-generation financial products, which should be much appreciated by their growing customer base.
USDC – Second Stablecoin on Algorand
Circle, the crypto fintech firm offers USDC – the number two stablecoin after Tether by usage – to promote payments, commerce, and financial applications using blockchain. USDC is the fastest-growing stablecoin experiencing about a 100% increase in circulating supply in the last 6-7 months.
About the Project:
Circle is looking for suitable platforms to expand USDC’s outreach and after observing the successful integration of Tether, Algorand is a proven platform to lean on.
Being a stablecoin, USDC will rip all the benefits mentioned in the Tether section. But partnering with Algorand grants Circle to implement some additional features as well –
- Linear scalability – As USDC is growing rapidly, this is very important
- Easy fund transfer – Having full autonomy over their funds, Circle API and business account holders can transfer funds from Circle’s card network and accounts to USDC on the Algorand platform.
- Seamless money transfer – To facilitate exchange payments between USDC on Ethereum and USDC on Algorand, Circle will launch an API in Q3 of 2020. This effective money transfer between digital wallets and exchanges will increase its business outreach.
- Automatic wallet support – Algorand platform offers an in-built wallet.
According to Circle co-founder and CEO Jeremy Allaire, growth in mainstream financial use cases is creating increasing demand for high-throughput payments and finance-optimized blockchain infrastructure. He further stated that the addition of Algorand blockchain to USDC-Circle Platform Services will form a foundation for developing a wide array of secure, scalable, and highly compliant financial applications.
A Few Other Notable Partnerships
Apart from attracting significant fintech partnerships, Algorand has also formed other essential partnerships. Some names worth mentioning are as follows –
Algorand has partnered with London-based media company World Chess – the commercial partner of the World Chess Federation (FIDE). It will store records of the official world tournaments on FIDE online and the players’ ranking on its blockchain.
PlanetWatch is the first “CERN Spin-off ” labeled organization focused on monitoring the environment. It has partnered with Algorand to build the world’s first immutable air quality ledger using crowd-sourced data gathered via IoT technologies on the blockchain.
Initially, a celebrated name and unique offering gave Algorand the boost it needed. But partnering with the top DEX, being approached for a CBDC project and a socio-economic development project, enlisting the top two stablecoins in its blockchain indicates Algorand’s authority in the DeFi space is globally recognized.
Witnessing its successful track record, not only DeFi but firms from other spaces and government bodies also seem eager to adopt the platform. Therefore, Algorand has established itself as a respected blockchain name and a frontline contender for major blockchain partnership, especially in decentralized finance.