Algorand (ALGO): What This New Network Promises

On June 19, Algorand started its series of Dutch auctions, while launching on exchanges, offering quick earning opportunities.

Algorand (ALGO) took over crypto social media by a storm, and left many asking what the project was about. Algorand has existed since 2017, but just in the past few days entered the stage where its market price would matter. ALGO tokens will go through a process of distribution through daily Dutch auctions.

At the same time, leading exchanges like Binance and KuCoin already carry the asset, allowing for auction buyers to liquidate some of the tokens. The auction and market prices promise to be interconnected.

If that model sounds familiar, it is because Algorand follows the token sale approach of EOS. The EOS token immediately raised concerns for a concerted manipulation of both auctions and market prices. In the case of ALGO, it is unknown what the periodic auctions will do to the market price.

Algorand resembles EOS in another aspect: the project will have a governing body and a constitution, in essence introducing a centralized rule. At the same time, Algorand promises to be technologically decentralized, offering a pure proof-of-stake, with each participant staking as much ALGO as desired. Owning ALGO is framed as the possibility for running a node and securing the network.

What is even more curious, the Algorand project managed to perform an ICO token placement in 2017, raising the equivalent of $60 million, and including US-based buyers. But the new Dutch auctions will be closed to US residents, as stricter rules about selling unregistered securities discourage projects from targeting US traders.

What is known is that 600 million ALGO will be sold at auction per year. But there is no schedule for the exact date and time for each auction. In the meantime, the Algorand blockchain is practically only used to count off blocks for potential auctions, as the network still carries zero transactions.

ALGO also offers a form of passive income, by staking through the Bitpie wallet. Analysts have calculated the reward at 14.89% on a yearly basis. Beyond simple staking, the Algorand network will have voting and relay nodes to increase speed.

The ALGO market price is still very volatile and poses its own separate risk. ALGO crashed by more than 20% in a single day, sinking to $1.33. The asset is still in the price discovery stage, but digital coins are inherently volatile and ALGO is no exception. The project may bring new earning opportunities, but may also prove to be extremely risky, including regulatory restrictions and uncertain security status in the USA.

Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.

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