ALGO, as a special kind of stablecoin

ALGO is a special kind of “stablecoin”:

• its price doesn’t change (much), when the BTC price increases,
• alas, its value decreases roughly twice as fast (in percent) as BTC value, when BTC price decreases.

This is a TERRIBLE coin from the small investor’s viewpoint.

So, despite ALGO’s technical superiority, BTC rules financially.

To make ALGO more attractive financially, all those, who BURN their BTC (ETH, etc) to a given address,
should be compensated not only with ALGO at the current exchange rate, but also
with possible differential revenues of the burnt crrypto money, to be paid monthly in ALGO, for one year.
So it would be a kind of “insurance”, that they don’t loose (so much) by burning their money,

What do you think?

This is one of Algorand biggest strengths. Price growth needs to have a footing in reality. How is it possible that Ethereum goes up $200 in one day, even though nothing changed about their protocol, scalability or level of L2 adoption? That’s because these investors are driven by speculation.

By not being excessively volatile, it discourages short term investors abusing a financial instrument as a get-rich-quick scheme. E.g. adoption for BTC as a means of exchange is painful, and as a financial instrument it’s useless. And not only is btc not good in what it was supposed to be, it’s still not good in what it is right now. Digital gold? Except bitcoin has no privacy layers.

Many crypto investors are not rational and driven by tribalism, short-term growth, immediate gratification. They distort the purpose of crypto and any reasonable level of expectations. If you want to benefit from a pump and dump scheme, I’d look for other altcoins.

What I have in mind is phasing out BTC somehow (one of Prof. Micali’s original points).
Pump and dump of bitcoin could be compensated with integrating: int t1 t2 price dt, and
taking into account the ratio of the integrated ALGO and BTC price.

ETH, BTC grow much more dynamically – even the occasional pumps and dumps have
their proper role…

The circulating supply of ALGO’s is 4.8 billion now (half of the max.). You may be right –
maybe the Algo Standard Assets and the higher level layers will be valuated much more, but
it is counterintuitive for me: those who ensure the proof of stake operation can’t be less
powerful financially than the total value of the Algorand ecosystem.

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To answer some points directly:

By not being excessively volatile, it discourages short term investors abusing a financial instrument as a get-rich-quick scheme.

If you want to benefit from a pump and dump scheme, I’d look for other altcoins.

I think we could argue the same on Algorand: “how is it possible that Algo goes down from 1.7 to 0.9 in one week, even though nothing changed about their protocol? (they even improved it)”

You’re right, algorand isn’t free from speculation. That 1.7 boom happened within a day. Probably some whales buying lots of algo