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Jun 30, 2022

Algorand Transparency Report: June 30, 2022

By: Algorand

Disclaimer: Algorand Cayman SEZC and its wholly owned subsidiaries, all of which are Cayman Islands subsidiaries of Algorand, Inc., are now the sole owners of all tokens held by any of Algorand, Inc. and its subsidiaries. References to “Algorand” in this transparency report refer to Algorand Cayman SEZC and its subsidiaries, and all transactions described in this report that use the Algo token are made by Algorand outside the United States with non-US counterparties or otherwise handled in full compliance with US securities laws and regulations.

Algorand is committed to providing full transparency into our actions and token holdings. As previously outlined, we will be providing transparency reports on a periodic basis. This report covers the period from May 1, 2021 through June 30, 2022. 

Our wallet addresses, previous transparency reports, and statement of use can be found here

As of June 30, 2022, Algorand beneficially owns 1.691 billion Algos through direct custody as well as investments. Additionally, as described below, Algorand has deployed approximately 228 million Algos over this period (14 months) to various market & application development Algorand ecosystem use cases.  Algorand’s beneficial ownership of Algos is expected to continue to decrease over time as we deploy Algos to various market and application development projects. 

Use of tokens 

To date, there have been two primary uses of tokens held by Algorand: 1) incentives to build and contribute to the growth of the Algorand platform, and 2) development and growth of the financial ecosystem.

Incentives to contributors and application developers through token grants, competitions, and investments.  

Total Algos: ~1.509 billion (up from ~240.5 million at last report)

  1. Investment in Venture Funds: Approximately 1.150 billion tokens have been deployed with various venture capital funds (i.e., Borderless Capital, Hivemind, Arrington Capital, and Skybridge) to support running relay and participation nodes on the Algorand network, invest in Algorand-focused projects, including equity, debt, and liquid and illiquid tokens, to empower projects that are creating new financial applications in the Algorand ecosystem.  These venture capital funds are unrelated organizationally to Algorand Inc. or its subsidiaries.
  2. Other Investments: Approximately 131 million Algos have been used to date to invest in other ecosystem partners. 
  3. Market Development: Approximately 213 million Algos have been used to date to build global awareness and promote Algorand’s technology through both technical and marketing partnerships.
  4. Application Development: Approximately 15 million Algos have been used to date to pay developers, vendors, and contractors for applications and services benefiting all members of the Algorand ecosystem including wallets, custody solutions, etc.

Development of the financial ecosystem by encouraging growth and liquidity through support of partner solutions including lending, staking, and market making.  

Total Algos: Approximately 130 million (reduced from 201 million at last report)

  1. Lending: To date, approximately 50 million Algos have been loaned and are held as collateral with 3rd parties to assist in the creation of lending markets. These tokens will be returned to Algorand.
  2. Market Making: To date, approximately 75 million tokens remain loaned to various market makers to support exchange liquidity and create orderly markets. The Algo is currently traded on over 50 exchanges across over 100 trading pairs at those exchanges. These tokens will be returned to Algorand at the completion of their respective engagements.
  3. Miscellaneous: Approximately 77 thousand Algos have been used to date for other purposes including product testing, payment of transaction fees, etc.

As described below, a limited number of tokens have been sold to fund development initiatives. All other token movements represent internal transfers between wallets for rebalancing. 

Since network launch, Algorand, Inc. has continued to reduce its voting influence over the network. Our commitment to responsible decentralization is described in more detail here.

Token Sales

As previously described, Algorand sells tokens periodically to fund development initiatives and to invest in other ecosystem projects. Any sales will follow the guidelines below which have been designed to limit market impact. 

For any Algos sold by Algorand:

  • Any tokens scheduled to be sold will be sold via one or more approved third parties, who will execute trades at their sole discretion within the guidelines specified here.
  • Algorand will be a Market Maker (never a taker of bids) and will offer its tokens only in the order book.
  • Algorand will not represent more than 1.5% of the total market volume in any given period.
  • The 3rd party structured seller has imposed an automatic rule that if the secondary market pricing (as reported on Messari.io) declines by more than 5% from the 7-day moving average, selling will automatically stop and resume when the observed price stabilizes.

During the period (approximately 14 months), Algorand sold approximately 150 million Algos through the methodology described above. During this time, Algorand represented 0.18% of volume across major exchanges according to Messari.

Other Notes

Protocol Development

Algorand will continue to support core protocol development on an ongoing basis, at a minimum for AT LEAST the next 7 years and has received 330 million Algos to fund grants and development efforts related to layer 1 support over this time. These Algos are included in our public wallets.

Decentralization of Algorand tokens

Algorand continues to decentralize control of the 2 billion Algos received as part of the Founders’ reward. As other parties become responsible for these tokens through distributions and grants, Algorand, Inc.’s stake will decrease over time.