As a next step toward responsible decentralization of the Algorand network, Silvio Micali and Jing Chen share a proposal for further decentralizing Algorand Governance

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Oct 31, 2020

Algorand Transparency Report: Oct 31, 2020

By: Algorand, Inc

Disclaimer: Algorand Cayman SEZC , a Cayman Islands subsidiary of Algorand, Inc., is the sole owner of all tokens held by any of Algorand,  Inc. or its subsidiaries. References to “Algorand” in this transparency report refer to Algorand Cayman SEZC, and all transactions, including all sales, loans, and other transactions described in this report that use the Algo are made by Algorand SEZC outside the United States and with non-US counterparties.

Algorand is committed to providing full transparency into our actions and token holdings. As previously outlined, we will be providing transparency reports on a regular basis. This report covers the period from August 1, 2020 through October 31, 2020. Our wallet addresses, previous transparency reports, and statement of use can be found here

As of October 31, Algorand beneficially owns 2.009B Algos (up from 2B at launch). Of those, approximately 1.716B are held in the wallets we have publicly shared, and for the remaining 293M Algorand maintains legal ownership but not physical custody (as described below).

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: ~192 (up from 184M at last report)

  1. Initial Investment in Borderless Capital: Approximately 115M tokens were contributed to Borderless Capital (previously Algo Capital). Borderless Capital is a fund that is unrelated organizationally to Algorand Inc. or its subsidiaries. These tokens are permanently held and remain locked by the fund while the value accrues to all fund participants. Confirmation of their holdings and their corresponding transparency statement can be found here.
  2. Equity Investments: Approximately 69M Algos have been used to date to invest in ecosystem partners.
  3. Market Development: Approximately 6M Algos have been used to date to build global awareness and promote Algorand through both technical and marketing partnerships.
  4. Application Development: Approximately 2M 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: 184.4M (no change from 184.4M at last report)

  1. Lending: To date, approximately 165.6M 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 18.7M tokens have been loaned to various market makers to support exchange liquidity and create orderly markets. The Algo is currently traded on 58 exchanges across over 120 trading pairs at those exchanges. These tokens will be returned to Algorand at the completion of their respective engagements.
  3. Miscellaneous: Approximately 80K 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 to ensure that participation remains below a 49% threshold at all times. Our commitment to this threshold and our focus on responsible decentralization is described in more detail here.

2020 Token Sales

As previously described, Algorand is selling tokens periodically in 2020 to fund development initiatives. 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 3rd 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 ask of the order book.
  • Algorand will not represent more than 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 10% in any 24-hour period, selling will automatically stop and resume after 24 hours has passed where the observed price has been stable or increased.

For calendar year 2020, Algorand commits to sell no more than the rewards earned for supporting the network on the secondary market, and may sell fewer or stop selling Algos. 

During the period, Algorand sold approximately 26M tokens through the methodology described above. During this time, Algorand represented 0.24% of volume across major exchanges according to Messari.