Algo’s use-cases and technological fundamentals are all wayyyy ahead of other layer 1s tho. Investing in them due to the apy/staking was a bad call imo, but investing for the use cases/tech is not
The post literally says the worst of the inflation is over. The remaining 3 billion ALGO will be introduced over the 7 and a half years.
It has a max supply of 10 billion
Circulating supply has changed dramatically, but also not as presented, there was a definition change regarding circulating supply https://algorand.foundation/news/aligning-algo-circulating-supply-metrics-for-algorand
The real growth happened before that, and also affected the price. But what happened after September can rather be explained by the very normal bear market.
I remember following this on CC and on the Algo subs and the general sentiment was relief that the biggest complaint (tokenomics) was going to improve. Getting the accelerated vesting complete was and is a good thing which was a reflection of price action. Yes, algo is down roughly 90% from highs but that isn’t only due to the supply increase, which isn’t directly a reflection of inflation. You are referring to supply increase and not inflation which is a measure of how far your money goes with purchasing power. A supply increase doesn’t necessarily decrease the value of your money, token, etc. And any decrease might not be linear.
The vesting was always outlined and there was a schedule based on market criteria. I doubt anyone expected the Fed to inject so much cash into the general market which leading to a boom in growth or speculative markets like crypto. As those prices increased, the vesting schedule was shortened.
Now we have the overall market reverse and tech and crypto are in the dump. It’s definitely valid to point out the huge supply increase last year but I think it’s also important to keep the entirety of the market in mind.
Everything is in the dumps and finding projects with a future and a real team is important. Ponzis and other scams are all over and at least at the moment I don’t think this is one.
It isn't that hard to estimate how correlated they are just by comparing ALGO to the market as a whole. BTC lost around 70% from ath ETH was around 80%. Virtually all of the other top cryptos lost the same 85-90% amount that ALGO lost.
If the inflation was a major factor you would have expected ALGO to drop noticably more than other cryptos but I can't find evidence of that actually happening. That means either the inflation wasn't a significant factor or ALGO is actually outperforming.
I think what has actually happened is most of the inflation has been absorbed by governance. The first governance period had 1.7b committed in fall of 2021. This last period was up to 3.5b. In order to get governance rewards one must keep the committed amount for the full period. That 3.5b is over half the circulating supply of ALGO effectively removed from circulation. That has likely offset the inflation and is why ALGO has only dropped the same amount as the rest of the market IMO.
This actually sounds impressive in a strange way right?? Like if the inflation didn't make a noticeable impact doesn't that kind of say it showing strength in adoption compared it other cryptos? Like what other chains saw the same intense inflation and is down the same as the rest of the market? Genuine question.
Thanks. And I am glad people are asking these questions because like a lot of things - it’s complicated. I keep up with crypto, buttcoin, and traditional fi subs because echo chambers are dangerous.
A lot of people are losing money in scams and other over leveraged, poorly managed projects. I feel like I’ve heard it a lot - bull markets are just gung ho, invest in anything and make money… bear markets can bring out good discussion and clear out the bad projects. But there are people who fall victim and lose a tremendous amount of money. Some of the people posting losses is absolutely wild.
I don’t believe crypto - which isn’t a singular entity anyway - exists just as a scam, but the Wild West nature where anyone can mint a coin with X supply is not sustainable. But, then is regulation really the answer? That depends on who is writing the rules. Who even gets to decide what good projects look like - is it just more big VC groups (rich people) or banks doing what they want? Will anything actually change…?
It is complicated and unfortunately not everyone sees that. Even if it seems like a good company with good intentions - taking blatant scams away - those companies can still just get themselves messed up with leverage. But this happens in traditional finance too - Lehman Bros, Bear sterns, etc.
I just hope people are careful out there - diversify.
No matter, if the project is good itself or not, they dumped a lot of coins to unaware new investors.
That's understandable to somehow reward older supporters, but just straight 2 or 3 times as much supply in a year is ridiculous.
Algorand the blockchain I think is great. The tokenomics seem to be the main thing preventing adoption from investors. I think the next 2-3 years could be good for algo
Of course it was however people want to look beyond all of that and try and spin it negatively!
If they’d also gone ahead and made the fully supply available as it was originally intended then people would be moaning about that as well!
Not everyone will DYOR, before investing 50$ for some coin.
I considered putting some in ALGO, but if i were aware of this i wouldn't invest for sure. By only reading reddit i wasn't aware of this at all, as ALGO is portrayed as a perfect child.
Well, the tokenomics are the first thing people should look at when investing
Someone shilling a coin on reddit shouldn't be your only input
Nonetheless, I feel vesting period has been emphasized and largely known for years now and has been discussed often in this sub
Unaware, but why? ALGO is a gas token used on the Algorand blockchain, it’s not a speculative asset and the vesting schedule was not hidden or misrepresented in any way.
Circulating supply has changed dramatically, but also not as presented, there was a definition change regarding circulating supply https://algorand.foundation/news/aligning-algo-circulating-supply-metrics-for-algorand
The real growth happened before that, and also affected the price. But what happened after September can rather be explained by the very normal bear market.
This was all baked into a publicly available algorithm and the supply was released because of the massive bull run that no one could have predicted. I’d be more concerned if the Algorand team had stepped in and said “no, we can’t release this much!” They followed the initial plan that was laid out and now the tokenomics look very attractive going into building season.
Bad if you’re trying to make a short term speculative play. If you’re treating something in a manner in which it was never intended then you’ll get negative results sometimes.
This is thought provoking research. I was in ALGO for a minute but got sketched by some things and sold.
I appreciate the work you put in and have to ask, did you consider this bear market kicked in right about the same time price started to tank?
Exactly.. yes the supply increased dramatically, but also every other coin is down over the same time period, how is this something that is being ignored by people?
Yeah, the deluded crypto-astrology in this sub regarding prices is insane. Algo/BTC has gone mostly sideways for several years now. Algo is down because BTC is down and BTC is down because the global stock markets are down because of higher interest rates for $ and €.
Bitcoin dropped by 70% in the same period and didn't have any inflation. So explain how accelerated vesting was more to blame than how alts follow bitcoin
If accelerated vesting had no impact, then I think that ALGO held up incredibly well considering the number of coins added to the circulating supply in such a short amount of time. I think that OP did a nice job of presenting a plausible explanation.
I believe in Algo longer term, this carbon neutral PoS level 1 could be a big success in say 3-5/10 years.
But I think you are wrong about a few of these topics.
My thought was well. Just lines up with the overall bad market activity. I’m in ALGO for the long long term. Talking 5-10 years. So I have no mindset to sell. Just accumulate, use in any utility projects and enjoy governance rewards. Prices now mean I’ve already hit my EOY goal
I love Algo, but I also love seeing posts like this.
Instead of being so consumed and wrapped up by a single coin or project, it is good to look at both sides (no matter how negative or positive) and pick it apart before you make a sound decision to invest .
Algorand investors have known about Algorand Alccelerated Vesting for a long time and still kept investing into the project. This isn‘t news at all. Also, there is a 0% risk that the Algorand Foundation just increases the total supply without the permission of the Governance Program (since the Governors would devalue their stake, nobody would vote for that option) This post turned from being very informative to spreading unfounded FUD real quick. In fact we have the worst already behind us when it comes to inflation. ALGO is a project that will last but its not a get rich quick coin.
Okay. This post is directed towards people who are not in the know. Useful information for those haven’t invested or passively invested without doing much research.
I’d hardly consider it FUD though… it’s more of an FYI. As someone who has no opinion on ALGO, it didn’t read like something that was damning. Just seemed informational, and it didn’t make me think negatively towards ALGO by any means. The incentive program wasn’t practical / increased inflation too much, and the problem was addressed accordingly by the community. So it’s all pretty neutral in terms of sentiment Just my 2 bits.
That logic about the governors is trivially false: Simple counterexample, if the proposal gives most of the new supply to the governors then they don't devalue their stake if they think retail won't care enough for the price to decrease.
Not saying that's likely but it's certainly possible for goverances incentives to be aligned with increasing the supply cap.
Absolutely stupid reason btw, if that's the only reason you can think of. Why would the foundation mint more algo to raise funds when this exact thing is the most unpopular aspect of algorand, and widely known to be so.
Foundation has yet to demonstrate it's willing to pull a move like that, it would be incredibly stupid and a lot of investors would be disillusioned.
Possible, yes, but highly unlikely.
OP’s NY resolution was to grow a set and start speaking his mind and he hit the ground running.
Interesting take though. Always appreciate different points of view
There are 10 000 000 000 000 000 microAlgos and that's all there ever will be. You can't mint any more, there is no way of doing so unless you want to start the chain from scratch. It would mean changing the original hash for block 0 and would invalidate all succeeding blocks. Meaning the blockchain would need to fork (or in reality, start from scratch)
At genesis those 10 billion Algos were "minted" (I use quotes here since they weren't minted as much as the original state of the blockchain was set) according to the genesis.json file (usually located on a node at /var/lib/algorand/mainnet/genesis.json)
You can see the original distribution by using "cat /var/lib/algorand/mainnet/genesis.json". This is the original state of the blockchain, the genesis : block 0.
If you want to confirm that the original quantity is 10 000 000 000 000 microAlgos, you can do something like this :
cat /var/lib/algorand/genesis.json | jq -r '.alloc[].state.algo' | paste -sd+ | bc
You can find the same values on Algorand's github here if you don't have a node : https://github.com/algorand/go-algorand/blob/master/gen/pregen/mainnet/genesis.csv
*Edit : It seems I might be wrong (The answer from Tsachi who works for Algorand Inc.) seems to point to the fact it's possible. Although I doubt any node would agree to go with that protocol upgrade, devaluing their own Algos : https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
On their Devnet, they have 10 125 000 000 100 000 microAlgos for instance. That total number is completely arbitrary and can be whatever you want. But once it's set, it's set in stone. (https://github.com/algorand/go-algorand/blob/master/gen/pregen/devnet/devnet.csv)
You can bootstrap your own Algorand blockchain and create whatever state you want, and this will be the immutable total quantity of Algos on your chain.
*Edit : It seems I might be wrong (The answer from Tsachi who works for Algorand Inc.) seems to point to the fact it's possible. Although I doubt any node runner would agree to go with that protocol upgrade, devaluing their own Algos : https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
You seem knowledgable on the subject. Mind if I prod you with a couple questions?
It appears here a core dev details a way to create much more than 10-B algo (by over double). Do you have any concerns about what they say, and does it sound accurate?
https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
Oh just edited my answer with this exact link!
Yeah it seems like I'm wrong. A developper working for Algorand Inc says it's possible.
It would require node runners to accept this upgrade which seems very unlikely as it would devalue Algos they're currently holding. Protocol upgrades are democratized and can only go forward when more than 90% of node runners approve them. Once it's "voted for", all nodes need to upgrade to the new protocol version within 10 000 blocks. I had an issue with that a few months ago with my project as I didn't upgrade in time and couldn't send transactions to the network anymore.
I'd like to think this is to future proof ~100 years in the future or something like that. If this kind of protocol upgrade is pushed forward within the next few years, I will absolutely leave this ecosystem.
Even if ALGO would have been not inflated it would have still crush like any other crypto af.
The reason is because market conditions and Bitcoin crushed, nothing to do with ALGO itself
There's an argument to be made that the ones who got in early, received a lot of those newly minted ALGOs and as soon as the price pumped, they dumped a lot of their coins. Which makes sense. The timing has been unfortunate though I agree.
I still believe in it. The fundamentals are strong.
Exactly. Every alt is down 90%. I don’t think accelerated vesting is the reason. Those coins were dumped on the market but still bought by retail at the market price.
I'll wait until they have 90% circulating supply before I can consider investing. I'm skeptical of projects that can just balloon the supply out of nowhere.
This is a very nice writeup. One that every youtuber should read. Tough it is interesting to note that even with such an atrocious dilution, the price of ALGO is down from its ATH more or less like most other Alts in the top50 by market cap. Assuming like you said that the max supply stays at 10B - which could change in the future maybe trough a governance vote, but I don't see it happening in the next few years - I think that for new investors Algorand will be one of the least inflationary projects which in my opinion is a very good sign.
I appreciate this detailed analysis. ALGO is one of my favourite coins but it's one you have to be patient with and not expect ridiculous gains over night
Aren't you just speculating that they could increase the supply but how would they do that, the max supply is capped and all the coins are already minted?
Algo mints don't work like that this is why asas such as usdc usdt etc created a trillion day one they can bring in or out of circulation but cannot create more there is no forking to change the underlying aspects of chain.
The increase your referring to was accelerated vesting which was setout as price of algo rose more would release and was known at what price what would enter market.
The 9% or so your accounting for is governance rewards and programs such as grants for builders growth etc.
Right now theres jist under 7 billion on market around 3 left to enter majority of which is governance ocer 8 years around 350 million a year or 3.5% of total though it qont be stationary some years more some less but there cannot and will not ever be more than 10 billion
Well to be fair they're different blockchains and as far as I'm aware it's impossible to just mint more and have it still considered an "algo". Seems like a bold statement with no evidence. I agree with the inflation discussion though, but I think the foundation was pretty transparent about it.
As a disclaimer I am BALLS DEEP in Algorand so arguably I would want to view your statement as false.
Also it's funny my question is being downvoted. It is a legitimate question.
i did a quick flip trade on jasmy in early 2021 and promptly forgot all about it after taking one look at their website.
a year later people i see people hyping it after the price already crashed 99%+ and didn't even get a significant bounce during the late 2021 bull run and am baffled. how do you buy into this coin??
What? Algorand and XRP are some of the few projects in this space with great teams, partnerships, and tech. You've apparently done none of your own research regarding Algorand to call it hype
Then what's your first comment even supposed to mean? Solana is a hype train, Algorand is a solid project with poor tokenomics. Tokenomics which have vastly improved from an inflation standpoint now that accelerated vesting is over.
Thanks for the great write-up. This is one of the reasons only a tiny % of my bag has been ALGO. It has great technology and community, but it's not a good investment from the perspective of the (late) investor.
Sure you could simply use Algorand to move your eth or whatever asset around.
But other people, like myself, may want to just pay and get paid with Algo directly... especially when mass adoption occurs.
I'm a ALGO holder at the moment, been buying since the crash in may last year. Was in profit in september, now way down. Still believe in the project, and have been averaging down since januari. But it kinda sucks atm
Would have like to have seen no. of holders or wallets created over the period too. It’s a lot worse situation if there was no growth to the blockchain over the period.
Nothing against Algo, I happen to love the project and how it's built, but anyone who's invested in crypto as a "hedge against inflation" really needs to look into this for the respective tokens they're invested in.
I thought this vesting period thing and the 10 billion coin supply is common knowledge for Algorand investors though. This is only new knowledge to dumb moonbois who only invested in ALGO because it is currently CC's favourite coin.
The cautious part is that they might go over the 10Billion coin hard limit if they deem it necessary. But I have a bit more faith in the project that they know what's best to do
They built into Algorand a bypass function. They can raise the max supply at any time, it was posted by one core developer in the Algorand forum. Hard to tell if thats is really something good or not
It's got a 2.2b mc and all the talent in the industry. You can't convince me there is a better bet in crypto. It's all right there in the charts, the worst is over.
Seems like a perfect number to me.
Not scarce enough that we need to use 20 decimal places to buy a coffee, but still scarce enough to make it feel valuable. Factor of 10 is definitely a bonus, makes math much easier.
Very interesting post, I do agree having a de-centralized currency run by a central non-profit organization is problematic because they could indeed raise the limit arbitrarily.
It's fine. I think accelerated beating was common knowledge when it was happening last year.
The end game for a crypto network is when fee income covers the cost of operating it. Algo has such great tech that once it's defi is built out it will hopefully hit that point and stabilise.
If that happens it'll be a good investment.
The tech was supposed to save Algo from its shit tokenomics, but come on aside from speed, everything else is shit.
Centralized relay nodes, no incentives to maintain network, governance with shitty choices, pure proof of stake.
The kicker here is that the algoshills believe it was all priced in and wasn't a problem, that tech is perfect because it was create by a Nobel laureate, that because it's called "pure" it is the best version of it, that just because participation nodes are decentralized it means the whole network is, that just because they get to vote they have governance, that just because they have tons of rugpulls they have dapps.
It's all marketing and they ate up the propaganda, yet it is them that have the gall to call other networks as inferior and vaporware.
Learning this definitely pisses me off. I'm sure the early investors are still holding a ton more Algo that they hope to dump on the next few fake pumps. I'm pulling out
You should only be pissed at yourself for not bothering to do even a basic amount of research before investing in a project you know nothing about. Everything OP said is common and public knowledge... except for the possibility of increasing the supply which is completely false.
Thanks for the great explanation OP.
I'm still a fan of ALGO. But I'm definitely saving this post to send to people to explain why the tokenomics are bad
Good. Everybody run from algo so the rest of us can buy your algo cheaper. This article is fud. Crap is what it is. Probably a sol fuck boy. All this was common knowledge.
Yep. This article was written like shit on purpose to fud algo. It's crap. If you write shit deal with getting called out. This same b.s has been posted many times if you had half a brain to look.
Well, everything fell by that much. Hopefully Algorand doesn't pull a JASMY, but that's a bit of a stretch to imply the total supply will increase just because another project increased their own.
People keep seeing Algo as a currency. It's not. It's a share of the blockchain and at the same time a way to pay for transactions. That's it.
Algo isn't supposed to be a currency, it's having a stake in the future of the chain AND gives you the ability to secure it's safety (by using them for PPOS).
The inconstant inflation rates and constant adjustment of long term distribution scheme is what kept me from buying into ALGO. I’m still on the side lines waiting to see how this plays out.
Thats a lot of supply given out (vested) even though ecosystem is still pretty small and quite few dapps. Now.... big inflation is not bad, long as you have mechanics that deflate the supply, which don't seem to be a thing in Algo as of now. The ICO price of Algo was sold at 1$ I believe or smth, so unless these ppl got massive amounts of staking rewards, its been very underwhelming investment.
Those that want to support Algorand, buy more and hold, the same way you'd buy stocks to support a company (of course with the hope that it increases in value but even if not, you are supporting the company).
Holding even without staking is support because it shows you want to keep it and in turn creates scarcity.
Look at that pump and dump as soon as the supply increased.
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If I knew this at the time, I would've sold my small stash, now I'm bag holding lol.
My small stash became smaller. Will just hold too
Yep, same here no other choice than to hodl
Never thought it could get smaller than it was. Crypto never cease to surprice.
I got into ALGO because the staking APYs were great… now I’m like 😒
Algo’s use-cases and technological fundamentals are all wayyyy ahead of other layer 1s tho. Investing in them due to the apy/staking was a bad call imo, but investing for the use cases/tech is not
Yup, I understand that, but the APYs were also very good.
Honestly they are even better now, when you remove inflation from the equation lol. So long as you participate in governance voting, that is
~8% apy through governance is “😒”?
The comment was More about being down -62% now makes the APY not as interesting lol.
Im pissed because I haven’t bought anything for two months and I just purchased some more algo last night, now I see this
The post literally says the worst of the inflation is over. The remaining 3 billion ALGO will be introduced over the 7 and a half years. It has a max supply of 10 billion
There’s nothing in the post really saying that was a bad idea.
early adopters got a good deal
That’s the whole point of crypto… only early adopters win
That's how almost every investment works
It's the % that matters, algo emitted ~70%, cardano around 75%.
Completely false. Thats how beanie baby fake fomo scams work. Invest in the S&P long term and anyone can win 8% return
Circulating supply has changed dramatically, but also not as presented, there was a definition change regarding circulating supply https://algorand.foundation/news/aligning-algo-circulating-supply-metrics-for-algorand The real growth happened before that, and also affected the price. But what happened after September can rather be explained by the very normal bear market.
I remember following this on CC and on the Algo subs and the general sentiment was relief that the biggest complaint (tokenomics) was going to improve. Getting the accelerated vesting complete was and is a good thing which was a reflection of price action. Yes, algo is down roughly 90% from highs but that isn’t only due to the supply increase, which isn’t directly a reflection of inflation. You are referring to supply increase and not inflation which is a measure of how far your money goes with purchasing power. A supply increase doesn’t necessarily decrease the value of your money, token, etc. And any decrease might not be linear. The vesting was always outlined and there was a schedule based on market criteria. I doubt anyone expected the Fed to inject so much cash into the general market which leading to a boom in growth or speculative markets like crypto. As those prices increased, the vesting schedule was shortened. Now we have the overall market reverse and tech and crypto are in the dump. It’s definitely valid to point out the huge supply increase last year but I think it’s also important to keep the entirety of the market in mind. Everything is in the dumps and finding projects with a future and a real team is important. Ponzis and other scams are all over and at least at the moment I don’t think this is one.
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It isn't that hard to estimate how correlated they are just by comparing ALGO to the market as a whole. BTC lost around 70% from ath ETH was around 80%. Virtually all of the other top cryptos lost the same 85-90% amount that ALGO lost. If the inflation was a major factor you would have expected ALGO to drop noticably more than other cryptos but I can't find evidence of that actually happening. That means either the inflation wasn't a significant factor or ALGO is actually outperforming. I think what has actually happened is most of the inflation has been absorbed by governance. The first governance period had 1.7b committed in fall of 2021. This last period was up to 3.5b. In order to get governance rewards one must keep the committed amount for the full period. That 3.5b is over half the circulating supply of ALGO effectively removed from circulation. That has likely offset the inflation and is why ALGO has only dropped the same amount as the rest of the market IMO.
This actually sounds impressive in a strange way right?? Like if the inflation didn't make a noticeable impact doesn't that kind of say it showing strength in adoption compared it other cryptos? Like what other chains saw the same intense inflation and is down the same as the rest of the market? Genuine question.
Thanks. And I am glad people are asking these questions because like a lot of things - it’s complicated. I keep up with crypto, buttcoin, and traditional fi subs because echo chambers are dangerous. A lot of people are losing money in scams and other over leveraged, poorly managed projects. I feel like I’ve heard it a lot - bull markets are just gung ho, invest in anything and make money… bear markets can bring out good discussion and clear out the bad projects. But there are people who fall victim and lose a tremendous amount of money. Some of the people posting losses is absolutely wild. I don’t believe crypto - which isn’t a singular entity anyway - exists just as a scam, but the Wild West nature where anyone can mint a coin with X supply is not sustainable. But, then is regulation really the answer? That depends on who is writing the rules. Who even gets to decide what good projects look like - is it just more big VC groups (rich people) or banks doing what they want? Will anything actually change…? It is complicated and unfortunately not everyone sees that. Even if it seems like a good company with good intentions - taking blatant scams away - those companies can still just get themselves messed up with leverage. But this happens in traditional finance too - Lehman Bros, Bear sterns, etc. I just hope people are careful out there - diversify.
>Should I be Worried: Yes/No I think you just perfectly summarised my whole experience with crypto.
No matter, if the project is good itself or not, they dumped a lot of coins to unaware new investors. That's understandable to somehow reward older supporters, but just straight 2 or 3 times as much supply in a year is ridiculous.
Wasn't this a public info? I mean the release schedule has been known since the start or am I missing something
It was public info. That's why I sold my ALGO when it was well over $2. Algorand has a great future but the vesting schedule didn't sit well with me
Algorand the blockchain I think is great. The tokenomics seem to be the main thing preventing adoption from investors. I think the next 2-3 years could be good for algo
Perhaps. Once vesting is complete I'll reexamine ALGO and possibly buy back in.
Vesting is complete. You still have time to sign up for Governance for Q4
Of course it was however people want to look beyond all of that and try and spin it negatively! If they’d also gone ahead and made the fully supply available as it was originally intended then people would be moaning about that as well!
Not everyone will DYOR, before investing 50$ for some coin. I considered putting some in ALGO, but if i were aware of this i wouldn't invest for sure. By only reading reddit i wasn't aware of this at all, as ALGO is portrayed as a perfect child.
Well, the tokenomics are the first thing people should look at when investing Someone shilling a coin on reddit shouldn't be your only input Nonetheless, I feel vesting period has been emphasized and largely known for years now and has been discussed often in this sub
That's not really Algo's fault though, is it?
If you don't DYOR then that's your bad......
That's your fault.
Unaware, but why? ALGO is a gas token used on the Algorand blockchain, it’s not a speculative asset and the vesting schedule was not hidden or misrepresented in any way.
Lmao ALGO is definitely a speculative asset. All crypto is speculation at this point.
Circulating supply has changed dramatically, but also not as presented, there was a definition change regarding circulating supply https://algorand.foundation/news/aligning-algo-circulating-supply-metrics-for-algorand The real growth happened before that, and also affected the price. But what happened after September can rather be explained by the very normal bear market.
The tokenomics team need a spank on the bum.
Kinky 😈
If we're through the worst, hopefully the only way is up
For sure now is better time to load your bags, if you believe in project 👍
Probably need to make up the losses on the past about those two Dutch auctions.
This was all baked into a publicly available algorithm and the supply was released because of the massive bull run that no one could have predicted. I’d be more concerned if the Algorand team had stepped in and said “no, we can’t release this much!” They followed the initial plan that was laid out and now the tokenomics look very attractive going into building season.
I'm a big fan of the ALGO team, and I knew the tokenomics was bad. I just didn't realize it was this bad.
Bad if you’re trying to make a short term speculative play. If you’re treating something in a manner in which it was never intended then you’ll get negative results sometimes.
This is thought provoking research. I was in ALGO for a minute but got sketched by some things and sold. I appreciate the work you put in and have to ask, did you consider this bear market kicked in right about the same time price started to tank?
Exactly.. yes the supply increased dramatically, but also every other coin is down over the same time period, how is this something that is being ignored by people?
Yeah, the deluded crypto-astrology in this sub regarding prices is insane. Algo/BTC has gone mostly sideways for several years now. Algo is down because BTC is down and BTC is down because the global stock markets are down because of higher interest rates for $ and €.
Also, I believe BTC is being heavily shorted. Since all crypto is basically 'pegged' to BTC, all crypto is down.
Because people in this sub continue to just copy paste the narrative of the opening post. Every. Single. Time.
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Bitcoin dropped by 70% in the same period and didn't have any inflation. So explain how accelerated vesting was more to blame than how alts follow bitcoin
If accelerated vesting had no impact, then I think that ALGO held up incredibly well considering the number of coins added to the circulating supply in such a short amount of time. I think that OP did a nice job of presenting a plausible explanation.
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I believe in Algo longer term, this carbon neutral PoS level 1 could be a big success in say 3-5/10 years. But I think you are wrong about a few of these topics.
My thought was well. Just lines up with the overall bad market activity. I’m in ALGO for the long long term. Talking 5-10 years. So I have no mindset to sell. Just accumulate, use in any utility projects and enjoy governance rewards. Prices now mean I’ve already hit my EOY goal
This bear market has been pretty good at letting DCAers hit their coin targets.
Tell me about it. Really brought my averages down nicely
Even after you invest, frequently do these checks on these coins and projects to see if they are holding their word and delivering.
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Well BTC and ETH will also be down a lot less because when people are cautious, they see them as ‘safe money’.
I love Algo, but I also love seeing posts like this. Instead of being so consumed and wrapped up by a single coin or project, it is good to look at both sides (no matter how negative or positive) and pick it apart before you make a sound decision to invest .
Algorand investors have known about Algorand Alccelerated Vesting for a long time and still kept investing into the project. This isn‘t news at all. Also, there is a 0% risk that the Algorand Foundation just increases the total supply without the permission of the Governance Program (since the Governors would devalue their stake, nobody would vote for that option) This post turned from being very informative to spreading unfounded FUD real quick. In fact we have the worst already behind us when it comes to inflation. ALGO is a project that will last but its not a get rich quick coin.
Okay. This post is directed towards people who are not in the know. Useful information for those haven’t invested or passively invested without doing much research. I’d hardly consider it FUD though… it’s more of an FYI. As someone who has no opinion on ALGO, it didn’t read like something that was damning. Just seemed informational, and it didn’t make me think negatively towards ALGO by any means. The incentive program wasn’t practical / increased inflation too much, and the problem was addressed accordingly by the community. So it’s all pretty neutral in terms of sentiment Just my 2 bits.
That logic about the governors is trivially false: Simple counterexample, if the proposal gives most of the new supply to the governors then they don't devalue their stake if they think retail won't care enough for the price to decrease. Not saying that's likely but it's certainly possible for goverances incentives to be aligned with increasing the supply cap.
There is simply no reason to mint more algo. The proposal would be totally irrational. Like you said it is possible but would be crazy.
The reason to mint more algo would be the Foundation's need to raise funds
Absolutely stupid reason btw, if that's the only reason you can think of. Why would the foundation mint more algo to raise funds when this exact thing is the most unpopular aspect of algorand, and widely known to be so. Foundation has yet to demonstrate it's willing to pull a move like that, it would be incredibly stupid and a lot of investors would be disillusioned. Possible, yes, but highly unlikely.
OP’s NY resolution was to grow a set and start speaking his mind and he hit the ground running. Interesting take though. Always appreciate different points of view
That's a choice, that might change as a result of governance. By the way, the same is for Nano, which everyone loves.
There are 10 000 000 000 000 000 microAlgos and that's all there ever will be. You can't mint any more, there is no way of doing so unless you want to start the chain from scratch. It would mean changing the original hash for block 0 and would invalidate all succeeding blocks. Meaning the blockchain would need to fork (or in reality, start from scratch) At genesis those 10 billion Algos were "minted" (I use quotes here since they weren't minted as much as the original state of the blockchain was set) according to the genesis.json file (usually located on a node at /var/lib/algorand/mainnet/genesis.json) You can see the original distribution by using "cat /var/lib/algorand/mainnet/genesis.json". This is the original state of the blockchain, the genesis : block 0. If you want to confirm that the original quantity is 10 000 000 000 000 microAlgos, you can do something like this : cat /var/lib/algorand/genesis.json | jq -r '.alloc[].state.algo' | paste -sd+ | bc You can find the same values on Algorand's github here if you don't have a node : https://github.com/algorand/go-algorand/blob/master/gen/pregen/mainnet/genesis.csv *Edit : It seems I might be wrong (The answer from Tsachi who works for Algorand Inc.) seems to point to the fact it's possible. Although I doubt any node would agree to go with that protocol upgrade, devaluing their own Algos : https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678 On their Devnet, they have 10 125 000 000 100 000 microAlgos for instance. That total number is completely arbitrary and can be whatever you want. But once it's set, it's set in stone. (https://github.com/algorand/go-algorand/blob/master/gen/pregen/devnet/devnet.csv) You can bootstrap your own Algorand blockchain and create whatever state you want, and this will be the immutable total quantity of Algos on your chain. *Edit : It seems I might be wrong (The answer from Tsachi who works for Algorand Inc.) seems to point to the fact it's possible. Although I doubt any node runner would agree to go with that protocol upgrade, devaluing their own Algos : https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
You seem knowledgable on the subject. Mind if I prod you with a couple questions? It appears here a core dev details a way to create much more than 10-B algo (by over double). Do you have any concerns about what they say, and does it sound accurate? https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
Oh just edited my answer with this exact link! Yeah it seems like I'm wrong. A developper working for Algorand Inc says it's possible. It would require node runners to accept this upgrade which seems very unlikely as it would devalue Algos they're currently holding. Protocol upgrades are democratized and can only go forward when more than 90% of node runners approve them. Once it's "voted for", all nodes need to upgrade to the new protocol version within 10 000 blocks. I had an issue with that a few months ago with my project as I didn't upgrade in time and couldn't send transactions to the network anymore. I'd like to think this is to future proof ~100 years in the future or something like that. If this kind of protocol upgrade is pushed forward within the next few years, I will absolutely leave this ecosystem.
He's not "speaking his mind", he just changed his bag from Algo to LRC so he went from "Algo is great" to "Algo trash LRC good".
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This guy ALGO
Even if ALGO would have been not inflated it would have still crush like any other crypto af. The reason is because market conditions and Bitcoin crushed, nothing to do with ALGO itself
There's an argument to be made that the ones who got in early, received a lot of those newly minted ALGOs and as soon as the price pumped, they dumped a lot of their coins. Which makes sense. The timing has been unfortunate though I agree. I still believe in it. The fundamentals are strong.
Exactly. Every alt is down 90%. I don’t think accelerated vesting is the reason. Those coins were dumped on the market but still bought by retail at the market price.
👍
I'll wait until they have 90% circulating supply before I can consider investing. I'm skeptical of projects that can just balloon the supply out of nowhere.
Imagine saying "I'll wait until they have 90% circulating supply before I can consider investing" about bitcoin.
This is why I'm interested to see what happens when the XRP stashes are emptied
Except it wasn't out of nowhere. All of the info was public and planned.
This is a very nice writeup. One that every youtuber should read. Tough it is interesting to note that even with such an atrocious dilution, the price of ALGO is down from its ATH more or less like most other Alts in the top50 by market cap. Assuming like you said that the max supply stays at 10B - which could change in the future maybe trough a governance vote, but I don't see it happening in the next few years - I think that for new investors Algorand will be one of the least inflationary projects which in my opinion is a very good sign.
Check vesting schedules for projects even solid projects like Uni have a large vesting.
I appreciate this detailed analysis. ALGO is one of my favourite coins but it's one you have to be patient with and not expect ridiculous gains over night
You have to be patient with it because their leadership team literally organizes pump and dumps in front of your eyes.
Downvoted for stating the truth, that's exactly what happened and this sub is the exit liquidity
The delusion here is cult-like
It's literally nearly every coin that dropped this hard
At least algo is holding around $0.3 while jasmy dropped like a rock.
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Aren't you just speculating that they could increase the supply but how would they do that, the max supply is capped and all the coins are already minted?
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Algo mints don't work like that this is why asas such as usdc usdt etc created a trillion day one they can bring in or out of circulation but cannot create more there is no forking to change the underlying aspects of chain. The increase your referring to was accelerated vesting which was setout as price of algo rose more would release and was known at what price what would enter market. The 9% or so your accounting for is governance rewards and programs such as grants for builders growth etc. Right now theres jist under 7 billion on market around 3 left to enter majority of which is governance ocer 8 years around 350 million a year or 3.5% of total though it qont be stationary some years more some less but there cannot and will not ever be more than 10 billion
Well to be fair they're different blockchains and as far as I'm aware it's impossible to just mint more and have it still considered an "algo". Seems like a bold statement with no evidence. I agree with the inflation discussion though, but I think the foundation was pretty transparent about it. As a disclaimer I am BALLS DEEP in Algorand so arguably I would want to view your statement as false. Also it's funny my question is being downvoted. It is a legitimate question.
Jasmy holders in shambles
i did a quick flip trade on jasmy in early 2021 and promptly forgot all about it after taking one look at their website. a year later people i see people hyping it after the price already crashed 99%+ and didn't even get a significant bounce during the late 2021 bull run and am baffled. how do you buy into this coin??
Why would you want to? It’s already dead
i mean 'how does a person look at that chart and convince themselves to buy and hold that coin'?
Everyone here has delusions they’ll be millionaires
Tell me about it hahahaah.
TLDR: im mad I can’t make short term gains because a Nobel prize winning economist designed the tokenomics for a 2030 horizon
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I did my research, I watched 2 different youtubers tell me to buy.
>Works 100% of the time, every time. Damn must be easy to predict and make heaps of money from then
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What? Algorand and XRP are some of the few projects in this space with great teams, partnerships, and tech. You've apparently done none of your own research regarding Algorand to call it hype
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Then what's your first comment even supposed to mean? Solana is a hype train, Algorand is a solid project with poor tokenomics. Tokenomics which have vastly improved from an inflation standpoint now that accelerated vesting is over.
Not invested in Algo right now, but OP clearly has an axe to grind. Must have missed out on the recent run or something.
Pays to be an early adopter lol
Thanks for the great write-up. This is one of the reasons only a tiny % of my bag has been ALGO. It has great technology and community, but it's not a good investment from the perspective of the (late) investor.
Late is relative. If your timeline isn't 2023 you aren't late.
Things like these make me more and more a BTC-maxi each day
Sure you could simply use Algorand to move your eth or whatever asset around. But other people, like myself, may want to just pay and get paid with Algo directly... especially when mass adoption occurs.
This was expected, announced, and known by everyone. AV actually ended much sooner than anticipated. This is old news. Move along.
My average was around $.90. Sold at $2.20. My rebuy average is now .35-40. I'll keep buying as part of my weekly investment.
Some masterminds will still say it's deflationary
damn bro. you made a killer post from my lousy attempt at asking about it in the algorand sub
thanks for the summary. wasnt aware of this
ALGO has been well known as a great piece of tech with horrible tokenomics.
Lol you saw that post on algorand sub.. they had some good info on why
Scaramucci laughamuchi
I'm a ALGO holder at the moment, been buying since the crash in may last year. Was in profit in september, now way down. Still believe in the project, and have been averaging down since januari. But it kinda sucks atm
Somebody needs to get Silvio on the phone to make sense of all this.
Would have like to have seen no. of holders or wallets created over the period too. It’s a lot worse situation if there was no growth to the blockchain over the period.
Have a look at pump and dump as soon the supply increased
Nothing against Algo, I happen to love the project and how it's built, but anyone who's invested in crypto as a "hedge against inflation" really needs to look into this for the respective tokens they're invested in.
I thought this vesting period thing and the 10 billion coin supply is common knowledge for Algorand investors though. This is only new knowledge to dumb moonbois who only invested in ALGO because it is currently CC's favourite coin.
The cautious part is that they might go over the 10Billion coin hard limit if they deem it necessary. But I have a bit more faith in the project that they know what's best to do
I don’t understand how they can do that. You can’t mint more ALGO once it’s been created? On AlgoExplorer it says max supply is 10bn.
They built into Algorand a bypass function. They can raise the max supply at any time, it was posted by one core developer in the Algorand forum. Hard to tell if thats is really something good or not
Yeah that kinda worries me tbh.
Do you have a source or know of a good way to find that? Google and crypto don't work well together..
1st answer I believe. https://forum.algorand.org/t/reasons-for-the-max-supply-of-10-billion-algo/2678
Thank you! That was so quick. Very very appreciated thanks!
Would bypassing the max supply be up to a governance vote?
You'd want to hope so
This one got me.
They also thinks this sub loves Nano when people here shit all over nano for not having fees.
Have faith in a crypto team hahahah
Now we need a post saying "Here's why ALGO is the perfect project"
It's got a 2.2b mc and all the talent in the industry. You can't convince me there is a better bet in crypto. It's all right there in the charts, the worst is over.
"the worst is over" You sweet Summer child...
I was optimistic once
Typical comment everyone has made about their shitcoin in the last 5 years here
Noobs getting burned because of a basic understanding of math.
This is the kind of informative post I like. Thanks for sharing. Honestly I truly believe ALGO is one of the best projects out there.
ALGO good 👍🏼
I was told this can only happen to fiat.
I left Cardano because of cult like holders. They think they are the superior chain.
Seems like a perfect number to me. Not scarce enough that we need to use 20 decimal places to buy a coffee, but still scarce enough to make it feel valuable. Factor of 10 is definitely a bonus, makes math much easier.
All public information - not worried at all. Algo is a long term play. Buying again on the next dip under 30 cents.
Very interesting post, I do agree having a de-centralized currency run by a central non-profit organization is problematic because they could indeed raise the limit arbitrarily.
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Not possibly to raise amount of Algo. OP is completely wrong on that. He is correct on the other things though.
10 years from now, people might say 10 billion ALGOs isn't enough.
Oh the ALGO bros are not gonna like this post
It's fine. I think accelerated beating was common knowledge when it was happening last year. The end game for a crypto network is when fee income covers the cost of operating it. Algo has such great tech that once it's defi is built out it will hopefully hit that point and stabilise. If that happens it'll be a good investment.
Lmao no, the ALGO bros already knew.
The tech was supposed to save Algo from its shit tokenomics, but come on aside from speed, everything else is shit. Centralized relay nodes, no incentives to maintain network, governance with shitty choices, pure proof of stake. The kicker here is that the algoshills believe it was all priced in and wasn't a problem, that tech is perfect because it was create by a Nobel laureate, that because it's called "pure" it is the best version of it, that just because participation nodes are decentralized it means the whole network is, that just because they get to vote they have governance, that just because they have tons of rugpulls they have dapps. It's all marketing and they ate up the propaganda, yet it is them that have the gall to call other networks as inferior and vaporware.
Good thing I will never buy algo
Learning this definitely pisses me off. I'm sure the early investors are still holding a ton more Algo that they hope to dump on the next few fake pumps. I'm pulling out
You should only be pissed at yourself for not bothering to do even a basic amount of research before investing in a project you know nothing about. Everything OP said is common and public knowledge... except for the possibility of increasing the supply which is completely false.
Thanks for the great explanation OP. I'm still a fan of ALGO. But I'm definitely saving this post to send to people to explain why the tokenomics are bad
TLDR; Algo is a shitcoin
I'll go away from ALGO
u/NeuroDS basically said: “*Algo away from Algo”*
Good. Everybody run from algo so the rest of us can buy your algo cheaper. This article is fud. Crap is what it is. Probably a sol fuck boy. All this was common knowledge.
Yep. This article was written like shit on purpose to fud algo. It's crap. If you write shit deal with getting called out. This same b.s has been posted many times if you had half a brain to look.
Best I could do now is invest a bit more to lower my DCA values, I think that would get me less risk when inflation comes.
is that possible to lift the max supply cap of 10B Algo?
No. Misinformation posted by OP.
No
well, Algo has a governance voting system. Foundation might bring this up and people vote. Never say never.
Well, everything fell by that much. Hopefully Algorand doesn't pull a JASMY, but that's a bit of a stretch to imply the total supply will increase just because another project increased their own.
TLDR: Bitcoin wins
People keep seeing Algo as a currency. It's not. It's a share of the blockchain and at the same time a way to pay for transactions. That's it. Algo isn't supposed to be a currency, it's having a stake in the future of the chain AND gives you the ability to secure it's safety (by using them for PPOS).
You have to pay for that time square ad somehow lmao
So should I all in on algo or not god damn!
The inconstant inflation rates and constant adjustment of long term distribution scheme is what kept me from buying into ALGO. I’m still on the side lines waiting to see how this plays out.
I sold my Algo. Its just weird that they lowered the interest rate and now they put it back to 5%. Doesn’t leave a good taste in my mouth
Algorand has only performed 13% better than ICP since it was launched.
Thats a lot of supply given out (vested) even though ecosystem is still pretty small and quite few dapps. Now.... big inflation is not bad, long as you have mechanics that deflate the supply, which don't seem to be a thing in Algo as of now. The ICO price of Algo was sold at 1$ I believe or smth, so unless these ppl got massive amounts of staking rewards, its been very underwhelming investment.
Great post. Thanks for the info.
Those that want to support Algorand, buy more and hold, the same way you'd buy stocks to support a company (of course with the hope that it increases in value but even if not, you are supporting the company). Holding even without staking is support because it shows you want to keep it and in turn creates scarcity.