 | It's September 2021: the Algorand price just hit $2.38, Algonauts are everywhere, and the CryptoCurrency sub is best described as a living shill for the Algorand blockchain. The Excitement is enticing and contagious as Algorand locks in one partnership after another, but behind the scenes... A Series of Unfortunate Events are Begining to Unwind, and what was once a promising blockchain to laugh and make jokes about - is quietly becoming a disaster for investors. This post is not a technical breakdown of Algorand nor is this post meant to fud the future of Algorand. This post is about the absolute disaster that continues to unravel for investors of the Algorand Blockchain. ------------------------------ I. A Brief Introduction to Algorand:If someone told you about Algorand they probably also told you it was founded by Silvio Micali "a cryptography pioneer, Turing award winner and MIT professor". Algorand launched in 2019 and hails itself as a Pure Proof of Stake (PPOS). The most notable difference from traditional Proof of Stake (POS), is that the creator of the next block is selected randomly irrespective of their total stake. As the name implies this approach is touted by Algorand supporters as a more fair and decentralized version of POS. ------------------------------ II. The Beginning of an Inflationary Nightmare for Investors:Like most crypto projects Algorand absolutely blew up in 2021, it started the year under $.40 and it ended the yearover 4x around ~$1.65. However unlike most crypto projects that peaked in early November Algorand peaked in September. What sounds like an interesting side note, holds a much darker truth for investors - Algorand inflated by 533% in 2021, as the circulating supply jumped from 1.19B to 6.37B - and 12% in 2022 from 6.37B to 7.14B. If you line up the graph for the increase in circulating supply to price, you can see the September 2021 peak lined up with a large surge in the circulating supply and a steady drop in price since. ------------------------------ III. A Controversial Change in LeadershipIn January of 2022 the prior CEO of the Algorand Foundation was quietly ousted from the company, and replaced with the new CEO Staci Warden. The replacement has been incredibly controversial inside the Algorand Community as the new Foundation CEO thought one of the major priorities for the Algorand Foundation was to focus on PR. https://twitter.com/StaciW_DC/status/1499202881647489025 Additionally she's been largely criticized for acting childish and immature in her public statements - with statements that are meant to create "baseless hype" which leads to Algorand believers holding even larger underwater bags. If you have ever heard of Staci before it's probably for her, "Nike" tweet. This one word tweet, lead people to believe big things were imminent for Algorand Investors with a potential Nike Partnership. Instead it was later revealed that Staci had hired a former Nike Executive as the Chief Marketing Officer for Algorand. ------------------------------ IV. A Disaster in "Marketing" - Part 1: An IntroductionIf you are familiar with Algorand Tokenomics you probably know, Algorand has a max supply of 10B and the beginning Centralization of Tokens with the Algorand team was one of the worst things about Algorand. As you can see, Algorand itself was one of the initial largest holder of Algorand. When a Crypto organization needs to raise funds - they do that by selling their tokens, and that's exactly what the Algorand Foundation did. To the Foundations credit, they make bi-annual Transparency Reports that detail how much they sold and sometimes what those funds were used for. Below is a breakdown of the sales from October 2020 - September 2022 time period. Links to Transparency Reports information was gathered from: 1, 2, 3, 4 . In the Past two years the Algorand Foundation has sold 228M Algo and Paid their Board of Directors another 3.65M Algo. Important: these numbers do not include Algo given out for for ecosystem development - That includes another ~400M Algo over two years, some of which may have also been sold. A Disaster in "Marketing" - Part 2: PartnershipsThe past few years have been huge for Partnerships with Algorand, it seemed like every week the Algorand Foundation was announcing a new partnership. But most of these were just glorified real-world Sponsorships that Algorand paid for, that came with an Agreement to do do something on the Algorand blockchain, like FIFAs NFT flop. Announced in May 2022, Algorand became the official blockchain partner of FIFA. Immediately after the announcement the price of Algorand spiked 20%, but what investors had hoped would be game changing for the Algorand network - ended up as just another disappointment. In September 2022, FIFA launched an NFT project on the Algorand Blockchain - with over 205,000 mints, at a cost of $5 each and low resale interest: the project just ended up being a further $1M cash grab for FIFA. The Algorand Logo was not on display as a partner during the Fifa world cup. Additionally there was not an ad or Algorand TV Spot during the world cup, something Algorand supporters had hoped to see. A Disaster in "Marketing" - Part 3: AdvertisementsUnder the guidance of the new Foundation CEO Staci and a pivot to focus on PR - Algorand the "Greenest Blockchain", planned a huge marketing stunt for Earth Day 2022. They rented the time square billboards for one hour to black them out. Then they intermittently flashed them Green with the Algorand logo and text about how Algo energy consumption compares to BTC. Source: https://shortyawards.com/7th-impact/algorand-earth-day?trk=public_post_feed-article-content Of course the money for this publicity stunt, had to come from somewhere, and that money came from dumping Algo on Investors. From April - September 2022. The Algorand Foundation spent $22.2M on "Marketing and other forms of ecosystem promotion" which was raised by selling Algorand. In the prior six months, they only spent 9M in the same category. ------------------------------ V. MyAlgo Hack and TinyMan HackIn late February MyAlgo was hacked and some of the largest holders on Algorand saw over $9M in Crypto drained. A week later smaller holders on MyAlgo also started to see their crypto drained in what at the time seemed like Bots draining wallets. Image taken from a /u/Odlavso post MyAlgo will be releasing the Preliminary Findings on the Hack tomorrow, Mar. 20th 2023. In January 2022 TinyMan was hacked and $3M was drained from Algorand ASAs (tokens). Source ------------------------------ With all of these problems and the continuous sell pressure from the Algorand Foundation - Algo's price has continued to drop over the bear market. One Algorand was selling for nearly ~$2.40 in Sep. 2021, and is now selling for $.22. If Algorand tech can turn around the nightmare that is occurring for Algorand investors is another question.... but one thing is certain - A series of Unfortunate Events has made Investing in Algorand an absolute nightmare. TLDR: What was once a loved project shilled endlessly by this sub has quickly and quietly turned into a nightmare for anyone still left in the project. Edit: Since some people think analyzing the failures of Algorand over the past 18 month is "hating Algo and Fud", please read the post again. The inevitable comments about "This sub hates Algo now, I Guess that Means It's Time to Buy" misses the entire point of this post. [link] [comments] |
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