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Algorand (ALGO)

Permissionless, pure Proof of Stake blockchain

KEY METRICS [as of 21 Jun 2019]
TickerALGO
Issuing Price$2.40 clearing price for 1st Dutch Auction
Circulating Supply2,643,333,333 (26.43%)
Total Supply10,000,000,000 ALGO
Project Websitehttps://www.algorand.com/

PROJECT OVERVIEW

  • Algorand is a permissionless, pure proof of stake blockchain that ensures full participation, protection and speed within a truly decentralized network
  • Algorand aims to remove technical barriers that have undermined mainstream blockchain adoption: decentralization, scale, and security
  • Algorand is built by a team with deep roots in academic theory and science, led by Turing award winner Silvio Micali who has dedicated his career to pioneering research in the field of cryptography

KEY HIGHLIGHTS

  • Pure Proof-of-Stake: Algorand uses a pure proof-of-stake (PPoS) consensus protocol built on Byzantine agreement whereby the users’ influence on the choice of a new block is proportional to their stake in the system (number of Algos).
  • Immediate Transaction Finality: Algorand blockchain does not fork as only one block can have the required threshold of signatures in order to be certified in a given round.
  • Self-Selection: All users are randomly, secretly, and continuously selected to participate in the Algorand consensus protocol - neither a few delegated users nor a fixed committee is responsible for proposing blocks in Algorand.
  • User Replaceability: Participants change every round of block selection in order to protect the network against attackers - for each round, every set of participants is random and independent of earlier participants.

WHAT IS ALGORAND?

Algorand (or the "Project") is dedicated to fulfilling the global promise of blockchain technology by leveraging the Algorand protocol and open source software. With core beliefs in the establishment of an open and permissionless blockchain, the Algorand team has a vision for an inclusive ecosystem that provides an opportunity for everyone to harness the potential of an equitable and truly borderless economy.

Project Value Proposition

  • Decentralization: The Algorand blockchain is entirely decentralized, and there is no powerful central authority or single point of control. A unique committee of users is randomly and secretly selected to approve every block. Nodes are run by entities representing diverse backgrounds across many different countries.
  • Permissionless: The network is public and open to all. Users do not need the approval of a trusted authority to use the Algorand blockchain. There is a single class of users and no gatekeepers. Every participant can read every block and have the opportunity to write a transaction in a future block. The Algorand platform also requires minimal processing power and modest IT resources to join. All online users who possess algos are automatically eligible to participate in block consensus.

TOKEN SALE & ECONOMICS

KEY METRICS
Token Name ALGO
Token Type Native
Private Fundraise 1 $4,000,000 equity raise in February 2018
Private Fundraise 2 $62,000,000 equity raise in October 2018
Team, Foundation & Investor Allocation 2,500,000,000 (25.0% of total supply)
Public Sale Allocation 3,000,000,000 (30% of total tokens over 5 Years; 600,000,000 max tokens per year)
Public Sale Price Determined by market via Dutch Auctions
$2.40 clearing price for 1st Dutch Auction
Public Sale Dates Conducted periodically over 5 years, starting from June 19, 2019
Circulating Supply 2,643,333,333 (26.43%)
Total Supply 10,000,000,000 ALGO

Token Supply Distribution:

  • Team, Foundation & Investor tokens comprise 25.0% of total token supply.
  • Public Sale tokens comprise 30.0% of total token supply.
  • Node Running Grant tokens comprise 25.0% of total token supply.
  • Participation Rewards tokens comprise 17.5% of total token supply.
  • End User Grant tokens comprise 2.5% of total token supply.

Additional detail on token dynamics can be found here.

Private Sale Overview

  • While Algorand did not conduct a private token sale, Algorand, Inc. (parent company) did conduct equity raises of $4,000,000 in February 2018 and $62,000,000 in October 2018 to fund protocol development. Equity investors own a portion of the Algorand, Inc. company.

Public Sale Overview

  • Algo tokens are distributed by the Algorand Foundation via a series of dutch auctions (detail on sales can be found here). The first auction was conducted on June 19th, 2019 with 25,000,000 tokens sold at a clearing price of $2.40 for a total capital raise of $60,000,000. The on-chain results of this first auction can be found here. Algorand will continue to conduct periodic, public auctions with a total auction supply of up to 600,000,000 ALGO per year over the next five years.

Token Governance & Use of Funds

As of June 2019, Algorand Inc. has used its funds according to the allocations below:

  • 52% Research and Development
  • 18% Community and Marketing
  • 30% General and Administrative

Algorand Token Release Schedule

The following chart represents the number and breakdown of all ALGO tokens that are to be released into circulation on a monthly basis.

ALGO Token Overview & Use Cases

The ALGO is the currency of the Algorand Protocol and serves as the medium of exchange and store of value. The currency serves as the representation of proof of stake that facilitates consensus to validate and confirm new transactions.

ROADMAP & UPDATES

Original Roadmap & Achievements

DATE Achievement COMMENTS
2018: Q2 TestNet Permissioned Launch Blog
2018: Q3 VRF Open Source Blog
2019: Q2 Testnet Public Launch Blog
2019: Q2 Open Source Blog
2019: Q2 MainNet Launch and 1st Auction Sale Blog

Updated Roadmap

Algorand operates an agile delivery process that is focused on shipping feature rich protocol upgrades every 3 to 6 months. Algorand grooms the backlog of features regularly in order to ensure the proper prioritization and focus of resources. Additionally, Algorand is open sourced and accepts community contributions. One of the advantages of the Algorand protocol is the low friction upgrade capability, which allows Algorand to deliver releases on a faster and more frequent cadence without disruption to the network.

2019/2020 Roadmap

VAULT: Algorand’s Solution to the Blockchain Storage Problem

  • Vault decouples the storage of recent transactions from the storage of account balances, which enables Vault to delete old account state. Vault allows sharding state across participants in a way that preserves strong security guarantees and introduces the notion of stamping certificates, which allow a new client to catch up securely and efficiently in a proof-of-stake system without having to verify every single block.

PIXEL: Algorand’s Bandwidth Reduction via Better Signatures

  • To operate in a consensual, decentralized, and secure manner, the Algorand protocol often asks multiple users to sign a common messageTo reduce the associated bandwidth while keeping the required security, Algorand uses a new digital signature scheme, Pixel, that allows both aggregation and forward security.

SELF-VALIDATING TRANSACTIONS: Algorand’s Separation of Consensus and Storage

  • Algorand’s self-validating payment technology removes the need to maintain balances for the purpose of verifying blocks and/or individual payments.

ATOMIC² SWAPS: Algorand’s (Truly Atomic) Atomic Swaps

  • Enable cross-chain and intra-chain atomic swaps in a peer-to-peer fashion that are final and instantly confirmed.

POST-AND-SALE TRADES: Algorand’s Non-Interactive Trade Mechanism

  • Enable a user to post her property for sale, together with a proof of ownership, her chosen price, and an expiration date for her offer. As soon as a buyer spots the offer and agrees to the price, Algorand allows him to make the trade without involving the seller at all.

Commercial Partnerships and Business Development Progress

  • Syncsort: Syncsort is a global software company specializing in Big Data, high speed sorting products, and data integration software and services. The partnership between Syncsort and Algorand will focus on solving use case specific challenges around data movement, data quality, and more.
  • TOP Network: TOP Network is a blockchain powered cloud communications network. Algorand and Top Network have entered into a strategic partnership to collaboratively research and develop scalable blockchain services and infrastructure components on the public chain platform.
  • OTOY: OTOY is a cloud rendering company delivering real-time cinematic quality 3D graphics through the browser. Together, OTOY and Algorand aim to democratize computing rendering power for the benefit of independent artists and major studios alike.
  • AssetBlock: AssetBlock is an investment company focused on the future of real estate and securities investing. AssetBlock and Algorand aim to partner and bring blockchain technology to real estate investment.
  • Flipside Crypto: Flipside Crypto is a market intelligence firm providing fundamental data on all major cryptocurrencies. With Flipside Crypto, Algorand developers will access clear, compelling data to help them drive adoption and direction.

TEAM OVERVIEW

  • Silvio Micali
    Founder

    Professor at MIT, co-inventor of probabilistic encryption, Zero-Knowledge Proofs, and Verifiable Random Functions; recipient of the Turing Award.

  • Steve Kokinos
    CEO

    Former Founder and Chairman of Fuze and co-founder of BladeLogic lnc.

  • Yossi Gilad
    CTO & Head of Systems Research

    Postdoc Researcher at MIT and Boston University. Former Research Staff at IBM.

  • W. Sean Ford
    COO

    Former CMO at LogMeIn, CMO and COO of Zmags, CMO of Syncsort, and VP of Global Business Unit Marketing at Oracle.

  • Pablo Azar
    Chief Economist

    Ph.D in Computer Science and Economics at MIT, co-inventors of Rational Interactive Proofs.

  • Keli Callaghan
    Head of Marketing

    Former Senior Director for Customer Engagement and Field Marketing at Avid.

  • Jing Chen
    Head of Theory Research & Chief Scientist

    Assistant Professor in the Computer Science at Stony Brook University, Recipient of the NSF CAREER Award in 2016.

  • Sergey Gorbunov
    Head of Cryptography

    Assistant Professor at the University of Waterloo, former Founder and CTO of StealthMine, and Researcher at IBM T.J. Watson Research Centre.

  • Naveed Ihsanullah
    Head of Engireering Research

    Former Senior Engineering Manager at Mozilla, Founder of FaceGuard, Lead Architect and Product Manager at Bit9 lnc.

  • Chris Hurley
    Head of Investor Relations and BD

    Former Principal at CH Counsulting, SVP in Corporate development and Strategic Alliances at Fuze.

  • Regina O’Brien
    Head of People & Talent

    Former VP in HR Operations at TraceLink and Demandware, held HR related positions at Brookfield Renewable Power and Salary.com.

  • Paul Riegle
    Head of Product

    Former Senior Director in Product Management at Carbon Black and Global Product Manager at IBM.

  • Georgios Vlachos
    Head of Mathematics

    M.Eng. in Computer Science from MIT, Gold metalist at the International Mathematical Olympiad.

  • Nickolai Zeldovich
    Head of Distributed Systems

    Professor of Electrical Engineering and Computer Science at MIT, recipient of several Best Paper Awards at the ACM SOSP conference.

  • Tal Rabin
    Head Of Research

    Former head of the Cryptography Research Group at IBM, recipient of the RSA Award.

  • Craig Gentry
    Research Fellow

    Former researcher at Cryptography Research Group at IBM, creator of the first FHE scheme, recipient of the MacArthur “Genius” Award.

  • Shai Halevi
    Research Fellow

    Former researcher at IBM, recipient of the 2017 SIGSAC Outstanding Innovation Award and Eurocrypt 2013 Best Paper Award.

  • Hugo Krawczyk
    Researcher

    Former researcher at IBM, co-inventor of the HMAC message authentication algorithm and the designer of HKDF, recipient of the RSA Award and Levchin Prize.


  • Fabrice Benhamouda
    Researcher

    Former researcher at IBM, recipient of the Prix de thèse Gilles Kahn 2017 and the Best Paper Award at Eurocrypt 2018


  • Rotem Hemo
    Director of Engineering

  • Tsachi Herman
    Sr. Principal Software Engineer

  • Brian Olson
    Principal Software Engineer

  • Eric Gieseke
    Principal Software Engineer

  • David Shoots
    Director of Engineering

  • Will Winder
    Senior Software Engineer

  • Ben Chan
    Software Engineer

  • Max Justicz
    Software Engineer

  • Derek Leung
    Software Engineer

  • Evan Richard
    DevOps Engineer

TRADING DATA

Liquidity

ALGO token is not actively traded as of publish date of this report.

TECHNICAL OVERVIEW

Github Overview

Algorand has a total of 4 public repos, 3 containing the SDKs and 1 containing node software. The node software repo (go-algorand) has just been open sourced, thus the stats of the private repo for node software have been included below as well.

Public Github Repositories

js-algorand-sdk

JavaScript SDK

8 Contributors   121 Commits  
java-algorand-sdk

Java SDK

2 Contributors   36 Commits  
go-algorand-sdk

Go SDK

6 Contributors   92 Commits  
go-algorand

Repo containing the Algorand node software

8 Contributors   20 Commits  

Private GitHub Repository

go-algorand-archive

Archived repo containing the Algorand node software - this is where core protocol development occurred

16 Contributors   2,385 Commits  

BLOCKCHAIN & NETWORK DATA

Introduction

Algorand blockchain uses a decentralized Byzantine agreement protocol that uses pure proof of stake (PPOS) with high throughput, fast time to finality, and high security.

Consensus requires three steps to propose, confirm and write the block to the blockchain. These steps are: 1. propose, 2. soft vote and 3. certify vote. Each is described below, assuming the ideal case when there are no malicious nodes and the network is not partitioned (i.e. none of the network is down due to technical issues or from DOS attacks). Note that all messages are cryptographically signed and authenticated with the VRF in these steps.

Block Proposal

In the block proposal phase, accounts are selected to propose new blocks to the network. This phase starts with every node in the network looping through each of the accounts that it manages, and for each account that is online and participating, running Algorand’s VRF to determine if the account is selected to propose the block. The VRF acts similar to a weighted lottery where the number of Algos that the account has participating online affects the account’s chance of being selected. Once an account is selected by the VRF, the node propagates the proposed block along with the VRF output, which proves that the account is a valid proposer. Algorand then moves from the propose step to the soft vote step.

Soft Vote

The purpose of this phase is to filter the number of proposals down to one, guaranteeing that only one Block gets certified. Each node in the network will get many proposal messages from other nodes. Each node will validate the VRF proof of these messages.

Certify Vote

A new committee checks the block proposal that was voted on in the Soft Vote stage for overspending, double-spending, or any other problems. If valid, the new committee votes again to certify the block.

Verifiable Random Function

Every block in Algorand reveals a new random and unpredictable selection seed that determines which users should participate in the next round of the consensus protocol. When a new block gets committed to the blockchain, everyone becomes aware of this seed (and everyone sees the same seed). A user secretly checks whether they were selected to participate by evaluating a Verifiable Random Function (VRF) with their secret participation key and the selection seed. This computation is minimal, so even a limited device such as a Raspberry Pi can do it. The VRF computation produces a pseudorandom output with a cryptographic proof that anyone can use to verify the result. By sending this proof, a user can prove to anyone that they were indeed selected to participate.

Participation Keys

In Algorand, every online user who possesses algos can participate in the consensus protocol. To reduce exposure, users do not use their spending keys (i.e., the keys they use to spend stake) for consensus. Instead, a user who wishes to participate in the protocol generates and registers a participation key. With this key, an account can participate in proposing and voting on blocks. Using participation keys ensures that a user's algos are secure even if their participating node is compromised.

In an ongoing series of extended performance tests with 10,000 globally distributed participants and a uniform distribution of stake, the network consistently reached over 1,000 transactions per second (tps) with sub 5 second latency. It’s important to note that uniform stake distribution is more difficult than what is seen in the real world and is the hardest stake distribution scenario for any proof-of-stake protocol to manage. Due the the efficiency of the network, the minimum transaction fee is 0.001 Algos.

COMMUNITY DATA

Algorand’s focus to build the developer and end user communities is concentrated on providing the proper documentation, forums, tools and campaigns to drive adoption of the chain. The community forum platform can be found here.

Social Community Overview & Strategy

The core adoption strategy is based on three pillars:

  1. Technology Focus: Algorand believes its approach to blockchain is unique. It creates full transparency, protection, and speed within a truly decentralized network, an innovation that means velocity is on par with large payment and financial networks, while securely scaling to billions of users.
  2. Algorand Ambassadors: Algorand has an active global community with volunteers regularly serving as ambassadors in their region. These participants (ambassadors) fill three key roles across developer relations, business community (those looking to build their business on top of Algorand), and content creation (those who are interested in creating content that helps the community). Further details on the ambassador program can be found here.
  3. Community / Developer Enablement: Algorand promotes various initiatives and campaigns in key regions across the globe dedicated to supporting community growth and engagement. Platforms such as Bevy and Discourse create a foundation for online awareness and engagement along with developer evangelists who regularly travel to speak to user and developer groups globally.

To date, the developer enablement programs have released a developer website, a golang SDK and a Javascript SDK with additional SDK’s forthcoming to promote a seamless developer experience both for current blockchain developers and developers on more traditional languages.

Algorand provides a detailed collection of resources for developers and community members to learn more about the project:

Community and Social Channels

APPENDIX

Videos

Economic Advisors

  • Christian Catalini | PAssociate Professor at MIT Sloan
  • Andrew Lo | Charles E. and Susan T. Harris Professor at MIT
  • Joseph Naggar | GoldenTree, Senior Portfolio Manager, Partner and Executive Committee
  • Kenneth Rogoff | Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard
  • Darius Sit | Managing Partner at QCP
  • Sharlyn Wu | Managing Director at China Merchant Bank International

Scientific Advisors

Cryptocurrency Advisors

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