It’s been just a few years, and Algorand is already making its presence felt in the blockchain space. The superb team and the innovative technology it employs are the two primary driving forces behind this. But channeling it correctly is the key here. Given the number of Algorand partnerships has come up in two years, it’s evident that Algorand is on the right track and working its way up steadily. The firm keeps adding global partnerships covering various tech spaces to its portfolio.
Before explaining Algorand’s meaningful partnerships in detail, let’s first examine the two mentioned primary factors giving Algorand its edge.
Silvio Micali, the Algorand team leader, was already a celebrated name in cryptography space before creating Algorand. For his distinguished works in cryptography, Micali won the prestigious Turing Award in 2012 and the RSA prize. He also received the Gödel Prize in 1993 and ACM fellowship in 2017 for his contribution to computer science.
Micali is a professor and a computer scientist at MIT’s electrical engineering and computer science department and Artificial Intelligence Laboratory. His research area includes public-key cryptosystems, digital signatures, pseudorandom functions, oblivious transfer, and secure multi-party computation.
Algorand employs Pure Proof of Stake (PPoS) consensus mechanism, where the block producers are selected thoroughly randomly through a lucky draw process. This keeps the identities secret and thwarts any foul play. Unlike others, the selection is not dependent on the stake size.
The algorithm enables Algorand to offer the following crucial features –
- Speed – It’s fast since the lottery takes just a few microseconds to run.
- Scalability – The mainnet allows 1000+ TPS of throughput on a single draw. Multiple such lotteries, being independent of each other, make it linear and highly scalable.
- Security – The complete random selection means zero chance of data tampering.
Algorand’s open-source and permissionless protocol is built with the primary focus on decentralized finance and hence naturally appeals to fintech firms. Therefore let’s explore the five such major partnerships Algorand has formed to advance towards its vision of the borderless economy.
Marshall Islands has hired New York-based SFB Technologies to develop its national digital currency or Central Bank Digital Currency (CBDC). This will be called the Marshallese sovereign (SOV) that will operate beside USD as national currencies. The firm is engaged in developing the blockchain infrastructure required to integrate digital currencies and mainstream regulatory compliance.
SFB Technologies has selected the Algorand platform as the underlying blockchain tech on which the SOV operation will be based. Besides the required speed, security, and scalability, Algorand also offers critical compliance controls and transaction finality.
This joint venture ensures SFB Technologies’ identity management and compliance platform integrates with Algorand’s blockchain functionality to realize the nation’s first digital currency.
The co-founder and CTO of SFB Technologies Jim Wagner revealed that they picked Algorand after extensive market research from multiple top-tear protocol choices available in blockchain space. Wagner said:
“The company has already powered several mainstream use cases and thanks to its unique features the platform has the functionality required to issue, manage, and distribute the SOV on a global level. This partnership ensures that the SOV will be built on a scalable and secure platform.”
Kenneth Kedi, the speaker of the Marshallese Parliament, has also expressed excitement about Algorand’s inclusion in the project.
In a significant step to realize its decentralized finance dream, Algorand has joined hands with Tether to integrate the USDT stablecoin with its blockchain protocol in February this year – the first for Algorand. With this collaboration, Tether has added Algorand to its teams of stablecoin platforms – Ethereum, EOS, Omni, Liquid Network, and Tron. Tether is the most widely used stablecoin globally by marketcap, outranking others by tens of billions.
The wide-spread adoption of stablecoin requires a high speed, scalability, and transaction finality from the underlying blockchain and Algorand is well-positioned in this regard. Tether is all set to leverage Algorand protocol’s speed and security to provide traders faster settlement and reduced counterparty risk in their transaction of fiats to digital assets.
The other benefits Algorand offers to Tether are –
- Instant payment confirmation
- Block confirmation time well below 5 seconds.
- Micropayments, thanks to extremely negligible transaction charges.
- Power to tokenize and issue any asset using Algorand Standard Asset (ASA) technology
- Customizable enterprise-level solutions
Showing excitement regarding the collaboration, Tether CTO Paolo Ardoino stated that Tether’s extension into the Algorand ecosystem provides an excellent opportunity for them to further contribute to the interoperability and cooperation of blockchain. Praising the Algorand team’s capability, he expressed how both sides are in sync and present a unique opportunity to work on other potential projects in the decentralized ecosystem in the future. He further stressed that Tether and Algorand both share a common desire to keep developing next-generation financial products. This will be appreciated by their growing customer base and benefit them.
In June this year, Algorand partnered with global Crypto FinTech company Circle to bring USDC stablecoin on its blockchain platform. After Tether, this is the second stablecoin to launch in Algorand – clearly signaling the soaring trust of stablecoin firms on Algorand.
The partnership will facilitate Circle API and business account holders to transfer their funds from Circle card network and accounts to stablecoins on the Algorand platform, granting full autonomy over their own funds powered by Algorand’s speed and security.
Another objective of the joint venture is to seamlessly transfer money between digital wallets and exchanges, thus increasing its industry outreach. Circle plans to launch an API in Q3, 2020, to help move payments between USDC on Ethereum and USDC on Algorand blockchain.
Algorand’s rich feature set is very much in alignment with Circle’s USDC needs –
- More than 1000 TPS of throughput
- True linear scalability
- Highly secure transaction and reduced counterparty risk
- Micropayment opportunity thanks to zero base-level transaction fee
- Most importantly, Algorand’s enterprise-grade infrastructure is most suitable for decentralized fintech operation.
- Automatic in-built wallet support
Also, the successful adoption of Tether in Algorand blockchain has convinced Circle to joined hands with Algorand.
USDC, the second most used stablecoin, has experienced about 100% increase in circulating supply just in the last seven months and crossed $50 billion worth of transaction volume since its launch. The reason behind this is massive USDC adoption by hundreds of fintech firms, making USDC the fastest-growing stablecoin. Hence, the partnership has catapulted Algorand in the front row with the elite blockchains.
IDEX was chosen in the initial portfolio company category for investment as per Algorand’s expansion plan using its $200 million Algo VC fund.
IDEX is the number one Decentralized Exchange, or DEX, built on Ethereum for crypto-coin trading. The trustless, secure platform promotes multiple simultaneous real-time trading and zero-fee cancellation. To expand its network of non-custodial trading, IDEX must expand to other major systems and include the digital assets in demand. Naturally, IDEX is likely to explore a rapidly growing and potential blockchain usurper like Algorand.
In September 2019, IDEX entered into a collaboration with Algorand to utilize and maximize their potential. IDEX has identified the benefits it can get from Algorand’s high level of speed, security, and decentralization – a critical balance even Ethereum is struggling to offer for years.
These features are crucial for realizing the borderless economy that Algorand and IDEX are so focused on. The close collaboration between the two companies will develop and upgrade the financial tools and services necessary to support this new decentralized economy.
The solutions will leverage several Algorand features like full finality, asset tokenization, and programmatic transfers at layer one. With upcoming feature add-ons on the Algorand blockchain, IDEX can also offload its smart contract complexities onto the Algorand’s inherent features.
The International Blockchain Monetary Reserve or IBMR.io strives to form new decentralized macroeconomic development structures to better the urban working-class’s societal condition.
IBMR has joined forces with Algorand to launch the Southeast Asia Microfinance Ecosystem Platform ARCC.one on Algorand. The firm will issue the Asia Reserve Currency Coin or ARCC token on Algorand, leveraging the Algorand Standard Asset (ASA) functionality that enables the tokenization and on-chain representation of the ARCC.
The project tackles two issues –
- Enable people to earn ARCC tokens by reporting various social problems such as corruption, barriers to commerce, traffic jams, utility bills, etc.
- Solve the working class’s lack of bank accounts and access to credit, investment, and insurance opportunities through the earned ARCC tokens
Users can also stake the ARCC tokens to fund various community infrastructure projects. Algorand infrastructure also enables IBMR.io to increase and preserve the liquidity of ARCC through a licensed hedge fund.
Founder and Managing Director of IBMR.io Sinjin David Jung 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.”
Within two years of its introduction, Algorand has already bagged a CBDC, top two stablecoins, one DEX, and one microfinance partnership project. This showcases the technological superiority, focused product and service offering, scale of infrastructure coverage, and team planning involved – something the blockchain community and fintech firms have realized.
With each successful project, Algorand boosts the confidence of companies around the globe to adopt its platform. Thus Algorand has truly elevated itself as the primary contender for future of blockchain-based fintech.