Stablecoin adoption and pivot to DeFi drive Algorand (ALGO) price higher

Stablecoin adoption and pivot to DeFi drive Algorand (ALGO) price higher

In the past few months cryptocurrencies have become a frequent topic of discussion among the mainstream media and traditional investors partially because of the Bitcoin evangelism of well-known influencers like Elon Musk, Mark Cuban and Michael Saylor.

One platform that has benefited from increased attention on the cryptocurrency sector is Algorand (ALGO), a scalable, secure, and decentralized digital currency platform.

Since the start of 2021, ALGO price has steadily grown from $0.33 on Jan. 1 to $1.84 on Feb.12, its highest level since July 2019. Its trading volume also increased from $70 million to $1.1 billion during that same period.

ALGO/USDT daily chart. Source: TradingView

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for ALGO on late Feb. 9 (E.T) which preceded a short dip and was followed by a more dramatic price rise.

As shown on the ALGO/USDT chart above, ALGO price pulled back to retest the $0.84 support after a high volume surge pushed the price from $0.77 to $0.95. Once the retest of the underlying support was confirmed ALGO price resumed its uptrend and rallied to a new 2021 high at $1.84 on Feb.12.

At 10 p.m. on Feb.10 the VORTECS™ score reached a peak at 74 and this coincided with ALGO price rising from $1.08 to its current 2021 high at $1.84.

Cointelegraph Markets Pro - VORTECS™ Score (green) vs. ALGO Price

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

Three reasons for the surging interest in Algorand are its capacity as a platform for stablecoins as they become increasingly integrated into traditional financial channels, its expansion into DeFi through partnerships and DApp creation, and the ability to earn a yield by simply holding tokens in a network wallet.

Stablecoin use increases

Stablecoins became a widely discussed topic among regulators and traditional finance after Facebook revealed its Libra project in 2019.

In early January 2020, the U.S. Treasury’s Office of the Comptroller of the Currency announced that national banks would be allowed to run independent nodes for distributed ledger networks and conduct transactions with various stablecoins that operate on these networks.

Algorand had previously been chosen by Circle as one of the platforms to host its USDC stablecoin and the Marshall Islands also chose the network for its national digital currency.

The protocol’s pure proof-of-stake consensus mechanism allows all wallets to participate in validating blocks, helping to increase network security and transactions per second capabilities.

Recently, high gas fees on Ethereum have left stablecoin issuers and DeFi traders looking for viable alternatives and Algorand is quickly emerging as a prime candidate. Likewise, central banks from around the world have begun analyzing which blockchain network to integrate their digital currencies (CBDC) with and Algorand has made it on the shortlist of viable contenders.

Algorand enters DeFi

Decentralized finance has quickly become one of the main driving forces behind the continued growth of the cryptocurrency sector, and Algorand stands poised to take full advantage of its development.

Several recent high-profile partnerships point to Algorand’s growing aspirations within the DeFi and fintech space.

Instimatch Global, a digital platform for institutional short-term money market trading, partnered with Algorand in early January and now a large portion of the millions of dollars in transactions it conducts each quarter will pass through the Algorand network.

Algorand ecosystem. Source: Twitter

Other notable partners include Frontier, a chain-agnostic DeFi aggregation layer which received a grant from the Algorand Foundation to grow the Algo DeFi ecosystem, and Opulous, the “first-ever decentralized finance (DeFi) offering backed by music as an asset class.”

Cryptocurrency asset security platform Curv has also joined forces with Algorand and will integrate the network within its asset-agnostic technology infrastructure, while Algorand will benefit from Curv’s custody solutions.

ALGO staking creates buy pressure

Another reason for Algorand’s continued growth comes down to the simplicity of staking on the network. ALGO holders can easily stake their tokens on the network and earn 7.19% by simply holding the tokens in the Algorand Wallet.

Only 1 ALGO is needed to begin earning and currently 2.33 billion ALGO, or 59.5% of the circulating supply, are staked on the network.

Percentage ALGO staked vs. engaged balance. Source: StakingRewards

As blockchain technology and cryptocurrencies continue to gain widespread acceptance and adoption, networks capable of handling increased transaction loads will be needed to efficiently onboard new users into the crypto ecosystem.

Algorand’s rapidly expanding DeFi infrastructure, a growing list of partnerships and the possibility of it being chosen to support CBDCs show the project has strong fundamentals.

Furthermore, the ability to easily earn a 7% yield while also helping to maintain the network’s security could attract new investors and lead to an uptick in buy pressure for ALGO.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Rice-based stable coin is being launched in Indonesia

MALANG, Indonesia, Jan. 26, 2021 /PRNewswire/ – Penjaga Lilin Nusantara, an Indonesian Cooperative in Malang- East Java is setting up Ricetron.com a Tron based DeFi (decentralized finance) to tokenized rice based stable coin. Ricetron aims to invite crypto enthusiasts to stake Tron and mint RET (Rice Economy Token), a governance token that will fund RIC (Rice Inventory Coin) stable coin.

RET & RIC token logo

RET token holder will benefit from 30% of all transaction fee and profit sharing of RIC DeFi, where once the DeFi platform running will be distributed back as Protégé Dividend to RET token holder wallets.

Total supply is 269,000 RET with only 190,000 RET minted through staking. It is TRC-20 token, using a TRX blockchain where the speed and the fee of transaction are much better compared to ERC based token.

Indonesia uses BULOG (state owned logistic agency) to stabilize staple price, which mostly focuses on rice. Due to lack of data reading skills, BULOG wastes 30,000 ton decayed rice every year, that amounts to almost 30 Million USD/year of Indonesian government budget.

Link : https://www.youtube.com/watch?v=uM0hoA90T1A&t=6s

“The whole idea came from our meeting with a cooperative chairman named Mr. Steven Henry Raharjo. His cooperative has a rice savings program where with this program, he is able to make price stability for its members. Besides that, rice savers can also get additional rice at the end of the year as well as give zakat and sadaqah (donations) to those around them who need it without having to spend any more money,” says Mr. Victorinus Widyanto, COO of Ricetron.

Thus, the cooperative came up with idea to tokenized premium grade Rice and also taking advantage of the recent cryptocurrency bull run. By creating rice based stable coin, it gives people more access to rice especially BULOG rice. In addition, RIC can also be converted to DeFi savings and collateral, and it guarantees RIC holders to fresh rice at the time of exchange, since it is backed by BULOG’s purchase order (voucher) with no time expiration. 1 RIC cryptocurrency equals to 1Kg of premium grade rice, with more Rice-based stable coins will be launched in the future with different grade.

Story continues

This project also benefits BULOG in creating consumers-based data, optimizing the agency rice procurement and the most important thing reducing annual government budget loss.

“Meanwhile RET will also be used as an anchor token for cooperative future projects. So people can participate to fund future projects by staking RET,” says Eka Suwandana, CTO of Ricetron.

Ricetron started the staking program on 15th of January 2021, it is divided in 7 rounds. They also now offering Youtube Staking Contest, where 67.6 RET in total will be given as Prize. Checkout their telegram: https://t.me/ricetron, channel for more information.

SOURCE Cooperative Penjaga Lilin Nusantara

Forget bitcoin, card firms should embrace stablecoin payments - Gartner

Research house Gartner has poured cold water on Visa’s recent move to support bitcoin trading on its network, arguing that the real revolution in payments would see centralised financial companies support stablecoin transactions on blockchains.

Earlier this week Visa outlined plans for the first pilot of its new suite of crypto APIs, following other industry players such as PayPal and Square in embracing the digital currency movement.

Gartner analyst Avivah Litan says that the move is welcome, and increase the “technical rails between consumers, businesses and blockchains, and help prepare the transition to future payment infrastructure”.

However, in a blog, she also notes that it is “hardly a revolution”. Having centralised financial companies that earn revenues by charging transaction fees at the centre of crypto goes against the peer-to-peer ideals of blockchain payments.

“Potential users are left to wonder if, in the future, they will have to pay these centralised services additional transaction fees for moving cryptocurrency across peer-to-peer blockchain networks, defeating the promise of blockchain,” writes Litan.

Her answer to this problem is for card brands and other established players to provide the on and off ramps for payors and payees using stablecoins, without being involved in the actual payment that would occur on the blockchain.

This would mean Visa and its peers would not get a transaction fee but would make money from issuers and acquirers using services such as risk management, onboarding and protections for balances.

Concludes Litan: “The question remains: will these centralised financial services companies go forward in line with the spirit of blockchain peer to peer payments at the risk of cannibalizing their existing central-clearing house based-revenue streams? The answer will depend on whether or not these firms have any practical choice.”