Algorand's self inflected wound

There are only 9 days passed from this post, which its idea was slaughtered at birth without either recognizing the problem statement or providing a practical and concrete alternative solution, and since then Algorand has slid down from position #41 to #48 with about ~25% reduction in its market cap.

Of course we are in a bear market and of course every day all sorts of bad news arrive, including serial SEC actions and the associated uncertainty, however none of them explains significantly worse performance of Algorand during the past few months. Algorand has a different problem, a self-inflected one: it fails to attract the new capital. Why? The past has not been that glorious in terms of preserving (not growing) the capital. 100% of buyers are at a loss. Every bit of big positive news turned out to not be what was expected (the FIFA one still badly hurts) and new investors money were constantly used as exit liquidity. More importantly, there is not that much more promising future ahead. 2.75B Algos is a lot of supply which is gonna hit the already exhausted market. There is no scarcity and there is no store of value property, which is fundamental to why cryptocurrencies are attractive for most people. How someone could sleep well with Algorand as his/her collateral in a Defi lending platform, presumably one of the most important use cases, that allows people to slowly build wealth using crypto.

Don’t get me wrong. I’m not worried about the value of my bag at this moment, tomorrow or next year, but I’m genuinely worried that the lack of attractiveness of Algorand to investors, in this competitive and noisy market, leads to drying up the liquidity and slowing down the project’s growth because the community doesn’t grow fast enough. Look at this foundation address. These Algos were supposed to be sold in the market for the last 14 days but there hasn’t been any chance. There are not enough buyers even at 40% lower price. And you know what, there might not be enough buyers even at 40% lower. It is not about the price but the fact that it is obviously stupid to buy something that most likely won’t even preserve its value as new Algos constantly sold in the market.

Algorand is an extraordinary project, with great teams and communities, with a real potential of becoming a global L1 solution. It would be a shame that ignoring this problem for too long leads to the project failure and eventual death!

Reddit

Don’t get me wrong, problems exist and need to be acknowledged, you are fully right. But this doesn’t automatically mean that your proposal is good, I’m sorry. I’d like to offer a constructive solution instead of just saying that your proposal is bad but I honestly can’t think of anything that isn’t fantasyland. Attracting developers is the only recipee for success in the long run, and the Foundation is actively trying to do so. How much succesful they are, only they know. Maybe they are failing spectacularly, maybe they are reading those line thinking “If only they knew what is coming in the next months when a flurry of apps will be hitting mainnet”.
Time will tell, but burning tokens without any reason just to hopefully induce a short term pump is beyond bad management of funds, and should be reserved to memecoins and rugpulls.

Attracting developers is the only recipee for success in the long run

The majority of apps do not consume that much Algos because of low transaction fees. The only exception is using Algo as collateral in DeFi which the constant downward price action is detrimental to that usecase.
If you mean by more dapps we are going to have more awareness, sure. Again, that doesn’t cause people to buy Algo if they think that most likely won’t preserve its value. There is currently a relatively high awareness about Algorand in the crypto community but there is not trust in it being any store of value.
At the end the real Algorand community are those who hold Algo (and the same philosophy is used for governance) and the community doesn’t grow if there aren’t good reasons for holding Algo. And if the community doesn’t grow the Algorand position among coins won’t improve.

Yes sorry I misunderstood you. What I mean, is that really after initial euphoria I just think that Algorand as an investment was a big failure on my part, and I now accepted that for it to become profitable again we will need two things: time and development. Luckily those are mostly independent from price, and on the contrary low token price can benefit some business cases.
For retail investors tough I think that we will need to either wait it out or playnly said sell at nearly all time low, since I see new lows approaching. At this point hype can only come from adoption as I see it (high level technical adoption, high tps usage and so on), and not from tokenomics manipulation. On the contrary, I fear that destroying tokens will damage the chance to improve the dev experience, so leaving Algorand behind instead of propelling it onward.

What is happening now is really dishearting. There is no mass usage of Algorand, which could correct the Algo price – think about the 0.1 Algo minimum account balance, 0.1 Algo per ASA, etc.

Now is the time for the AF to offer a super reward for those willing to keep their Algos for any length of time.

P.S. Number of accounts over 1K Algos: 140 thousand. It is sad. Very sad.

More than anything, right now we need clarification on the issue of algo as a security in the US. If exchanges delist it and it is marked by the SEC for potential action, people will stay away from it. Once that clears, price should go up. Algo is still building in the background. As long as VCs keep funding the Foundation, we should be ok.

At this point, given the current interpretation of the law Algo is a security but with the congress law and more decentralization it can become a commodity, and hopefully at that point shouldn’t be that much doubt about it. Please see the following I posted a month ago.

As a Developer,

I Left Algorand because.

1. No seasoned developer wants to learn DSL language. Rather we want to learn a Language we can use in other jobs.(ecosystems).

2. Learning Curve of Teal was too steep, for lower reward.

3. Algorand was difficult to do complex applications to many boilerplate. Teal doesn’t doesn’t follow the general Programing Paradigm.

As developer I spent more time thinking of coding a Concept in Algorand way.

I Left the Ecosystem.

What about the adoption of Python? Do you think this makes it easier?

It dnt make it easier, I was just coding Teal in a python way.

But it’s was difficult to represent concepts.

Which languages do you prefer?

It’s not the language (python is easiest), but the method in coding simple tasks.

Algorand virtual machine has a little instruction set.

Developers want a tool that feel natural, e.g coding Solana Function in Rust feels like I am writing A normal code.

Algorand has a way of coding thats not natural. E.g Pyteal.

In Solana I do

let Var = Var + var

In Pyteal.

Add(Int(3), Int(4))

This means after learning python, there’s a Pyteal to learn.

Honestly when I used it, it’s was difficult to do complex tasks. Like I am writing assembly code.

Maybe @vidhyanand has some insights to see if there is any other ways to help

Puya is more like the normal python you know, you should take a look!

Also there is now Tealscript which is like Typescript

I agree… this concept was not the great, and first attempt to fix this was in tealish… now they are going to release normal version (Puya) with algokit 2.0 where you can simply write var = var2 + 1

Its already working, but actually i prefer to use the tealscript (typescript syntax) as it is much more intuitive already for some time.

there was a development from the stateless contracts (now called logicsig) towards the more addoption of stateful contracts, and luckily the abi was introduced later to standardize the calls between smart contracts so that it is much more similar than in solidity for example. I do not understand people who are not doing abi compatible scripts at the moment, but i assume it is just time needed for them to find and learn it.

at the moment when building using algokit and tealscript everything is so simple… you just write few lines, the connection client is generated, and even some tests are deployed so it implies people will learn the best practice right from the start

if algokit will get to the state where it is really line by line debugging it will be super cool

Puya will enable vanilla python. It is already available for developer preview. Have a look and let us know what you think.