Algorand (ALGO) Cryptocurrency: Comprehensive Overview
Core Technology and Blockchain Architecture
Algorand is a proof-of-stake blockchain and cryptocurrency. Launched in June 2019 by computer scientist and MIT professor Silvio Micali, Algorand is a permissionless, open-source blockchain network upon which anyone can build. Algorand is designed to be a payments-focused network with rapid transactions and a strong focus on achieving near-instant finality—that means processing over 1,000 transactions per second (TPS) and achieving transaction finality in less than five seconds.
Currently, Algorand blocks are produced in less than 3 seconds with instant finality. The network can process 10,000 transactions per second, and at a cost of a fraction of a cent per transaction.
The bifurcation of the network, between Layer 1 and Layer 2, allows Algorand to process transactions so efficiently. With more complex smart contracts taking place on Layer 2, simple transactions can be processed more quickly on Layer 1 without being bogged down by larger, more complex smart contracts.
Founding Team and Project History
The idea for Algorand was born in 2017 in Cambridge, Massachusetts, when a small group of world-class cryptographers and engineers gathered around the kitchen table at the home of Silvio Micali. Created by computer scientist and Massachusetts Institute of Technology (MIT) professor Silvio Micali, Algorand is perhaps rare in that it was started by an established academic who already had a distinguished career at the time of its launch. Micali, for example, is the recipient of a 2012 Turing Award, a notable accolade in the world of computer science, for his work with his colleague Shafi Goldwasser.
Silvio has helped pioneer many of the breakthrough technologies that help power blockchain today. He is the co-inventor of probabilistic encryption, Zero-Knowledge Proofs, Verifiable Random Functions, and many other innovations that are the foundations of modern cryptography.
Algorand's whitepaper, co-authored by Micali and Jing Chen, was published in 2017. In June 2018, Algorand launched its testnet to initial participants. The Algorand mainnet went live in 2019. On June 19, 2019, the Algorand Foundation held a series of Dutch auctions to sell ALGO, the native cryptocurrency of Algorand. The first auction made available 25 million ALGO tokens at a starting price of $10 and a reserve price of $0.10.
A non-profit organization called the Algorand Foundation oversees the funding and development of Algorand Inc. and the Algorand protocol itself.
Consensus Mechanism and Network Security Model
Algorand uses a unique variation of Proof of Stake called Pure Proof of Stake (PPoS). The core principle of Algorand consensus is the cryptographic "self" sortition. The sortition procedure runs locally and privately, on each node of the network participating in the consensus protocol, without a centralized coordination. The goal of the sortition algorithm is randomly selecting a subset of users participating in the consensus protocol (committees) ensuring two properties: the sortition's result can be easily verified once it is published, while it can not be determined ahead of time by malicious adversaries.
The likelihood that a given user will be selected (in the committee) is influenced by the number of ALGO tokens held by that user (the stake). Algorand's consensus steps are: block proposal, proposals filtering (soft vote) and committing the block (certify vote).
Unlike other proof-of-stake (PoS) approaches where a user must stake (essentially, lock up) their tokens, on Algorand the user maintains control of their Algo at all times, since the tokens remain in the user's wallet whilst securing the network as part of consensus. The stake in Algorand is neither locked nor delegated, which is a key differentiator of PPoS from bonded proof of stake (BPoS) and delegated proof of stake (DPoS).
PPoS enables Algorand to handle a high volume of transactions without compromising on speed or security when the network is busy. Since PPoS relies on randomness, it eliminates the need for complex computation and competition among validators, allowing the network to consistently maintain fast transaction processing without a heavy computational overhead.
From a security point of view, Algorand avoids the weakness of delegated validators, since a fixed group of validators, known in advance, could easily become the target of distributed denial-of-service (DDoS) attacks. Algorand's "speak-once" model ensures two safeguards concerning DDoS attacks: first, no malicious attacker can know which node should be targeted with a DDoS in advance, and second, once the node has spoken, its role in the consensus is already fulfilled, so there would be no gain in targeting it with a DDoS.
Tokenomics: Supply, Distribution, and Mechanics
The protocol's supply of ALGO is limited to 10 billion units. Algorand has a fixed total supply of 10 billion ALGO tokens, of which 8.35 billion are currently in circulation.
Maximum Supply: 10 billion ALGO (fixed, non-inflationary). Issuance Model: No ongoing inflation; all tokens were pre-minted at launch and distributed according to the vesting schedules.
ALGO's initial distribution took place through a public sale in 2019. 25% of the tokens were allocated to the community via airdrops and incentives, and the remaining portion went to the Algorand Foundation, the development team, and strategic partners.
The Algorand allocation includes Public Sale at 30.00%, Node Running Grant at 25.00%, Team and Investors at 20.00%, Participation Rewards at 17.50%, Foundation at 5.00% and End User Grant at 2.50%.
Algorand announced a revision of its token dynamics, allowing for the complete distribution of the fixed and immutable total supply of 10 billion Algos 2030 instead of 2024 as initially planned. Algorand uses linear vesting, especially for Public Sale allocations. This means tokens are released in equal amounts over time, reducing sudden supply shocks.
As part of Algorand's unique protocol design, the rewards paid to validators for producing blocks are split and distributed among all ALGO coin holders, rather than being awarded only to block producers. Rewards are distributed approximately every ten minutes, aiming to incentivize people to engage with the Algorand staking platform, thereby contributing to the network's decentralization.
Primary Use Cases and Real-World Applications
The public version of the Algorand blockchain is primarily designed to enable other developers to create new kinds of applications fuelled by cryptocurrency. The platform has been used in real estate, copyright, microfinance and more.
Since 2019, Algorand has been a partner of World Chess. In 2021, Italia Olivicola, Italy's largest olive and olive oil producers' organization, partnered with Euranet to implement blockchain technology based on Algorand. SIAE, the Italian Society of Authors and Publishers, also announced a project on copyright management using Algorand in the same year.
In 2023, Fideiussioni Digitali, Italy's initiative to reduce fraud in bank and insurance guarantees, selected Algorand as its blockchain. In 2024, CNBC-TV18 reported that Algorand's blockchain was being tested for use in a digital identification to help women in India access public health programs.
More than a million people have received life-saving assistance through HesabPay in 2025, including cash support from the United Nations World Food Programme (WFP), the United Nations High Commissioner for Refugees (UNHCR), and the World Bank.
Telegram enabled ALGO trading for its approximately 1 billion users, Zebec integrated Algo for payroll and global spending via Mastercard, and Nubank, Latin America's biggest digital bank, added Algo for over 100 million clients.
Key Partnerships and Ecosystem Integrations
The Foundation and Noah formed a partnership to connect traditional finance and DeFi through seamless, compliant payment infrastructure. Wormhole NTT integration enables multichain interoperability for Algorand. Google added Algorand to its Agent Payments Protocol (AP2) alongside major tech and payments giants.
Allbridge integrated a dedicated stablecoin bridge for native stablecoins, such as USDC, to move easily between the Algorand ecosystem and other major blockchains. AEON Pay enabled ALGO & USDCa payments across over 20 million merchants, including McDonald's and Uniqlo.
Folks Finance launched its long-awaited FOLKS token on November 6, 2025, reaching 2,600 holders and an 80,000 circulating supply on Algorand in a few weeks. The WTR token, built on Algorand, was adopted by Gruppo CAP, a public water utility company serving more than 2.5 million residents across 133 municipalities in Italy.
Competitive Advantages and Unique Value Proposition
Pure proof of stake (PPoS) is a protocol that enables Algorand to address the blockchain trilemma, ensuring that none of the three key elements of an ideal blockchain – scalability, security, and decentralization – is compromised.
Algorand is faster than Ethereum, and does not charge gas fees. The minimal transaction fee on Algorand is 0.001 ALGO coins, and it is determined solely by the transaction size.
As a payments-focused blockchain, Algorand achieves its sub-five-second transaction finality by allowing a minimal staking threshold. In comparison to Ethereum, which will require 32 staked Ether after its switch to proof-of-stake for validators, nodes on Algorand have to stake only one ALGO. Consequently, the network could be considered more democratic compared to its peers, as everyone can secure Algorand as a node instead of delegating their stake.
Its pure proof-of-stake consensus mechanism is energy-efficient compared to traditional proof-of-work systems. Furthermore, the Algorand Foundation actively offsets its carbon footprint, making Algorand a truly eco-friendly blockchain solution.
ASAs can represent anything fungible or non-fungible, including stablecoins, real-world assets, loyalty points, system credits, and in-game points.
Current Development Activity and Roadmap Highlights
Staking rewards launched on Algorand in January 2025, opening new pathways for users and institutions to participate in securing the network and collecting rewards.
Algorand is building standardized, smart contract-based representations of assets like debt and equity, using ACTUS standards. A Debt Algorand Standard Assets (ASA) MVP is coming in Q4 2025.
Algorand's agentic payment toolkit, including X402, MCP, and A2A support, an agentic security and identity framework, and SDKs, enables developers to build agentic payment services for finance.
Algorand is developing the Rocca wallet, a portable, verifiable, and self-owned identity solution. Rocca's backend is based on DID and Verifiable Credentials industry standards. As such, it unlocks a large number of identity-related use cases for developers and builders.
The upcoming Project King Safety will revise Algorand's fee and incentive mechanisms to make the protocol truly self-sustaining and protect network security for the long term. A position paper is expected in Q4 2025, with planned implementation through 2026.
Algorand is reintroducing its grant program, and this time it's completely community-driven. A new community-elected xGov Council will review all incoming grant proposals and provide recommendations.
Key developments in 2025-2026 include expanded focus on tokenized securities, carbon credit markets, and central bank digital currency (CBDC) pilots.
Sources:
- https://en.wikipedia.org/wiki/Algorand
- https://www.gemini.com/cryptopedia/what-is-algorand-cryptocurrency-blockchain
- https://cointelegraph.com/learn/articles/what-is-algorand
- https://algorand.co/
- https://www.kraken.com/learn/what-is-algorand-algo
- https://coinmarketcap.com/currencies/algorand/
- https://weareblox.com/en-eu/algorand
- https://tangem.com/en/blog/post/algorand-algo-in-tangem/
- https://99bitcoins.com/cryptocurrency/what-is-algorand/
- https://kriptomat.io/cryptocurrency-prices/algorand-algo-price/what-is/
- https://en.wikipedia.org/wiki/Silvio_Micali
- https://algorand.co/founding-story
- https://algorandtechnologies.com/our-founder/
- https://www.capgemini.com/insights/research-library/discussion-with-silvio-micali/
- https://www.linkedin.com/in/silvio-micali-26bb37152/
- https://academy.youngplatform.com/en/crypto-heroes/who-is-silvio-micali-how-was-algorand-created/
- https://event.technologyreview.com/emtech-mit-2021/speaker/297618/silvio-micali
- https://metaschool.so/articles/silvio-micali-founder-algorand-profile
- https://www.mexc.com/price/ALGO/tokenomics
- https://tokenomist.ai/algorand
- https://www.algoran