I’ve been following the Foundation’s recent announcements – the move to the US, the for-profit structure, the board revamp. But these changes raise more questions than they answer about the protocol’s long-term economic model.
Below is an open letter I wrote to Staci Warden, based on the Foundation’s transparency reports and on-chain data. I’m posting it here because these are questions the whole community should be able to discuss.
A letter to AF CEO, Staci Warden
Dear Ms. Warden,
Your recent announcement about becoming “part of America First for digital assets” raises more questions than it answers. Jurisdictional changes and board revamps do not address the fundamental economic and competitive challenges facing the protocol. I would respectfully ask you to consider the following concerns, drawn from the Foundation’s own transparency reports and on-chain data.
On the competitive landscape
When I bought my first Algorands, the value proposition seemed exceptional: instant finality, high throughput, low latency, and zero downtime since launch. These are genuinely world-class technical achievements. But the market does not stand still. Competitors have been progressing rapidly while Algorand’s organizational focus drifted.
Consider Solana, which is preparing its “Alpenglow” update—a fundamental redesign aimed at scaling throughput even further while maintaining low costs. Or Ethereum, which has successfully transitioned to proof-of-stake and now hosts a vibrant, self-sustaining ecosystem of developers and applications without a foundation selling into the market to survive. Even newer entrants like the “World Computer” projects are capturing mindshare with innovative approaches to decentralized infrastructure. The question is no longer whether Algorand’s technology is good, but whether it can outrun competitors who are also improving—and doing so with healthier economic models.
On treasury sustainability
The Foundation sold 63 million ALGO in Q2 2025 alone. At the current spend rate of approximately $16 million per quarter, the treasury faces potential exhaustion by Q1 2028. This places the Foundation in the difficult position of being the market’s largest structural seller—a dynamic that creates constant headwinds for price appreciation regardless of technological progress.
On funding priorities
While approximately 100 million ALGO are sold per quarter to fund Foundation operations, the xGov grant program distributes around 2 million ALGO per quarter to builders, with a maximum of 400,000 ALGO per project. This disparity raises a legitimate question: is the ecosystem being funded, or is it funding the Foundation?
On network economics
The current block reward is 8.88 ALGO, of which 8.8 ALGO comes from protocol subsidy (inflation) and only 0.08 ALGO from transaction fees. With real-time throughput at 6-50 TPS against a network capacity of 10,000 TPS, fee revenue cannot realistically replace this subsidy. “Project King Safety” renames the inflation source but does not eliminate dilution. The network remains dependent on continuous subsidy rather than economic activity.
On governance and accountability
The Foundation now describes itself as a “for-profit” entity. Yet ALGO holders—who bear the economic consequences of treasury sales—have no governance power over Foundation decisions. Board members are appointed unilaterally. Major partnerships are approved without community input. This creates a structural disconnect between those who make decisions and those who absorb their outcomes.
The World Chess partnership illustrates this dynamic. Directing approximately $700,000 annually (roughly 7 million ALGO) through staking rewards for a marketing-oriented deal is a decision made without community discussion. Even the “Community Calls” that replaced AMA sessions offer severely limited Q&A. The mechanism for accountability is unclear.
On John Woods’ top-ten vision
The former CTO, John Woods, explicitly stated his goal: to bring Algorand into the top ten cryptocurrencies by market capitalization. Achieving this would require sustained price appreciation and a self-sustaining economic model capable of competing with the likes of Solana, Ethereum, and others. Today:
Price: approximately $0.089, down from its $1.00 launch
Market cap rank: around #70 with a $789 million market capitalization
Circulating supply: 8.87 billion of the 10 billion fixed maximum
Daily unlock rate: approximately 527,395 ALGO entering circulation
The Foundation remains a net seller while competitors build self-sustaining ecosystems.
On strategic clarity
At its inception, Algorand aimed to fill the role of CBDC infrastructure—a clear, focused goal. Today, the narrative has shifted toward micropayments and the x402 standard. These are almost opposite aims. One requires institutional trust and regulatory alignment. The other requires mass consumer adoption and merchant integration. Trying to pursue both simultaneously risks achieving neither.
Technology is an important part of the equation, but technology alone is not enough. Algorand now needs more than ever a realistic strategy for outpacing competitors who are improving their own technology while maintaining healthier economies.
I would like to hear your thoughts on how the Foundation plans to address these structural and competitive challenges before the problems become too huge to solve.
Respectfully,
Maugli
P.S. to my letter
Dear Ms. Warden,
One more thing – not a data point, but a reflection on trust.
Years ago, you said: “We at the Foundation are not interested in price.”
I know what you meant. Long-term thinking, fundamentals over speculation. I accepted it then.
But time has given that sentence a different meaning.
Because here is what happened after:
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The Foundation kept selling tens of millions of tokens quarterly – making it the market’s largest structural seller.
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The CTO who publicly aimed for the top ten, John Woods, eventually left.
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Developer funding remained a fraction of operational spending.
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Major decisions like the World Chess partnership were made without community input.
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The price declined to $0.08.
And through all of this, the Foundation’s leadership remained unaccountable to the very people who funded it through dilution.
Then came your recent interview.
In it, you revealed two important things:
First, you said: “I could not get Algos… they would pay me in dollars.” Because of US regulatory concerns, you were paid in cash rather than Algo.
Second, you said: “We have the ability to make money if we want to.”
These two thing are connected.
Now that the Foundation is “all in” on the US, you can finally receive ALGO as compensation. You may now have skin in the game. You personally can now benefit if the price goes up.
So today, when I hear “we are not interested in price,” I hear something different than I did years ago.
I hear: “We were not interested in price when it only affected the community. Now that it affects us, perhaps things will change.”
You may not have meant it that way. But intentions do not matter – results do.
And here is the second connection.
You now have the “ability to make money.” If that is true, then the Foundation no longer needs to be the market’s largest structural seller. You can fund operations through revenue, not dilution.
So my question is simple: when will you start?
The technology is still exceptional. Instant finality, zero downtime, pure proof-of-stake. That part was never the problem.
The problem is that a world-class engine was steered by people who did not understand that in crypto, price is not speculation – price is signal. It tells builders whether to stay, investors whether to commit, and the market whether the project is growing or fading.
John Woods understood this. He left.
Now you have the ability to earn ALGO yourself. Now you have the ability to make money through revenue, not token sales.
The question is: will you use these abilities to fix what got broken?
Or will those of us watching from the outside continue to wonder why the people inside couldn’t do it?
Respectfully,
Maugli
I’d be interested to hear what others think. Are these concerns valid? Are there answers I’m missing?
