Algorand DeFi Is Booming. Here’s Why

Crypto funding agency Hivemind deploying $25 million into Algorand DeFi is one among a number of catalysts attracting liquidity to the Layer 1 chain. 

Algorand Receives VC Increase

A brand new money injection has helped elevate DeFi exercise on Algorand. 

Cash flowing into the Layer 1 blockchain’s ecosystem has soared this week following an announcement that Hivemind Capital had deployed 80 million ALGO tokens into numerous DeFi and governance packages throughout the Algorand ecosystem. On the present worth of $0.31 per ALGO token, Hivemind’s dedication totals greater than $25 million. 

Following Hivemind’s announcement, the full worth locked in DeFi apps on the Layer 1 hit a brand new all-time excessive, topping $270 million for the primary time within the blockchain’s historical past as we speak. Per DeFiLlama knowledge, the full worth locked on Algorand has jumped 53.95% this week, and several other Algorand-based DeFi protocols have benefited from the increase in liquidity. Decentralized exchanges equivalent to Tinyman and Pact have registered double-digit positive aspects to their complete worth locked over the previous 24 hours, whereas AlgoFi, a one-stop store for lending, borrowing, and buying and selling, has shot up over 17%. 

Algorand’s ALGO token additionally reacted favorably to the information. After struggling a dip in response to Thursday’s hotter-than-expected CPI print, it jumped over 10%, helped by a broader market restoration. 

Extra Algorand Catalysts

Hivemind’s dedication to Algorand’s DeFi ecosystem shouldn’t be the one tailwind spurring curiosity within the Layer 1 chain. Elsewhere, the digital collectibles buying and selling app FIFA+ Acquire has introduced a wave of soccer followers to Algorand because it launched on September 22. FIFA+ Acquire lets customers assemble memorable moments from the highest matches in FIFA historical past and commerce them with different customers by means of the FIFA+ Acquire market. Thus far, the platform has bought over 158,000 packs by means of its genesis drop. It’s doubtless curiosity in FIFA+ Acquire will proceed to extend within the build-up to the FIFA World Cup in November. 

One other notable replace for the Algorand ecosystem is FTX’s decision to assist native USDC. Customers can now deposit and withdraw USDC stablecoins straight between the Algorand blockchain and their change pockets. FTX beforehand solely supported ALGO token transactions. The replace makes it simpler for FTX customers to deposit dollar-denominated funds onto Algorand to be used within the blockchain’s DeFi ecosystem or on FIFA+ Acquire. 

Extra broadly, Algorand has additionally secured a number of partnerships throughout the globe. Within the Philippines, fintech firm AID:Tech is making a cell banking pockets resolution that makes use of the Algorand blockchain for transactions. El Salvador, the nation that made headlines final yr when it grew to become the primary to make Bitcoin authorized tender, has additionally declared Algorand its official blockchain companion. Extra just lately, in a brand new July report, Italy’s central financial institution additionally revealed plans to leverage the Algorand blockchain for a doable central financial institution digital forex. 

With so many optimistic catalysts spurring adoption, it’s not stunning that Algorand has continued to develop whereas exercise on different Layer 1 chains declines. Because the begin of the yr, the full worth locked in protocols on Algorand has elevated by 269%. As compared, the full worth locked on Avalanche has dropped by 86%, whereas Solana is down 85%. Nonetheless, with international macroeconomic turmoil displaying no indicators of letting up, it could be troublesome for Algorand to proceed rising at an analogous tempo going ahead. 

Disclosure: On the time of penning this piece, the writer owned ETH, SOL, and several other different cryptocurrencies.