Algorand DeFi Is Booming. Here is Why

Table of Contents

Key Takeaways

Liquidity is flooding into Algorand’s DeFi ecosystem. The entire worth locked on Algorand hit $270 million for the primary time right now.
Hivemind Capital deployed $25 million price of capital in Algorand DeFi, giving the ecosystem a liquidity injection.
A number of different catalysts have helped Algorand increase forward of different initiatives, however the rise could also be shortlived as a result of macro local weather.

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

Algorand Receives VC Enhance

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 applications 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 entire 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 right now. Per DeFiLlama knowledge, the entire 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 resembling Tinyman and Pact have registered double-digit good points to their whole 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 just isn’t the one tailwind spurring curiosity within the Layer 1 chain. Elsewhere, the digital collectibles buying and selling app FIFA+ Accumulate has introduced a wave of soccer followers to Algorand because it launched on September 22. FIFA+ Accumulate lets customers assemble memorable moments from the highest matches in FIFA historical past and commerce them with different customers by the FIFA+ Accumulate market. Up to now, the platform has offered over 158,000 packs by its genesis drop. It’s doubtless curiosity in FIFA+ Accumulate 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 alternate 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+ Accumulate.

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

With so many optimistic catalysts spurring adoption, it’s not shocking that Algorand has continued to develop whereas exercise on different Layer 1 chains declines. For the reason that begin of the yr, the entire worth locked in protocols on Algorand has elevated by 269%. Compared, the entire worth locked on Avalanche has dropped by 86%, whereas Solana is down 85%. Nonetheless, with world macroeconomic turmoil exhibiting no indicators of letting up, it might be tough for Algorand to proceed rising at the same tempo going ahead.

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

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