Taking place in Dubai, the industry’s newly-adopted “crypto-friendly” hub, we discussed Algorand’s technology and achievements, its plans in the middle east, the state of the market in the wake of recent events, and Algorand’s place in it all.
Pleasant-natured yet direct, Sean doesn’t mince his words. During his earlier keynote speech, he addressed the elephant in the room. Despite the evident excitement and numerous developments from the Algorand community, no blockchain ecosystem exists in a vacuum. After an annus horribilis for the crypto industry with the collapse of Terra/LUNA, Three Arrows Capital, FTX, and so many others, he recognized that everybody was “in need of a little therapy” — and spoke about how to move forward as an industry as a whole.
“Keeping our promises,” he said, was one of the major ways that web3 could regain credibility. He reinforced that Algorand, unlike many other projects, has always made this a priority — working hard to deliver the tech without unnecessary effort hype and speculation. Since its launch in 2019, Algorand has produced a scalable platform that provides security, fast finality, and (as Sean emphatically emphasizes), “zero downtime.”
Running on a variation of Proof of Stake (PoS), Algorand’s Pure Proof of Stake (PPoS) prioritizes fairness and decentralization, selecting validators anonymously at random. This ensures that all network participants receive equal opportunities regardless of their stake and that no group of validators becomes disproportionately powerful.
Transactions take less than four seconds to complete, and unlike other layer ones, Algorand emphasizes accessibility. As a result, developers can build on Algorand in many existing programming languages from Java and C++ to Go, Python, and Rust — without having to learn a separate codebase.
Why doesn’t the Algorand name come up more often in the circles of frenzied VCs or impassioned influencers? Because its team has always avoided overpromising and underdelivering. The time for vaporware projects and reckless behavior is (according to Sean) firmly behind us.
“Now is the time to move forward,” he states: “Our time is now.”
Algorand’s Notable Partnerships
The background music begins to play a little too loudly for meaningful conversation, but Sean remains unfazed; he moves closer to the recorder as I ask him to elaborate on some of the promises Algorand has kept. Self-described as the “world’s most powerful and sustainable blockchain,” Algorand has caught some big fish this year, including partnerships with the international footballing association FIFA and the well-known music-sharing platform Napster.
Sean explains that Algorand only pursues partnerships if a “technical component is tied to it” and that the FIFA agreement is about “helping innovate and develop new opportunities for its fans and followers of the sport.”
As its official blockchain partner, so far, Algorand has developed a marketplace for collectibles tied to FIFA’s digital archives, but Sean explains:
“There are many ways the partnership could evolve,” from issuing bonds to creating composable tickets that “take on a life of their own.”
As FIFA embarks on its journey to embrace more openness and transparency, Sean believes the partnership will be:
“The first step on its innovation journey to start embracing new technology and drive benefits to engage more closely with fans.”
When it comes to Napster, which Sean refers to as a “pioneer ahead of its time,” thanks to Algorand tech, the company can finally deliver on its mission to democratize music — while rewarding its creators. Napster is one of several projects in Algorand that is wrapping its arms around the creator economy, allowing artists to tokenize and fractionalize their music and trade on the value of music technology. Sean enthuses:
“Platforms like Napster are giving money back to big-name artists and independents struggling to make an income, not just in western countries but all around the world.”
Forging Ahead with Institutional Relationships
Beyond multiple initiatives for retail customers, Algorand has left a footprint in traditional institutional circles. Curiously (and in stark contrast to many web3 projects), Algorand differentiates between “blockchain” and “crypto.” “Those are two very different things,” Sean states. Speak to anyone in Algorand, and you’ll rarely hear talk about its native ALGO token or position in the cap table. Instead, the emphasis is on the underlying platform and building blockchain applications with the potential to impact society and transform the world at large.
Given the current market turmoil, we asked Sean whether Algorand has witnessed any pullback from institutional investors. He shakes his head and reflects:
“Traditional financial institutions have been more thoughtful and rigorous about understanding the technology and the benefits and pressure-testing the capabilities of technical partners. They are more rigorous because they have a fiduciary responsibility and there are things they can’t accept like downtime, lack of security, or lack of finality.”
While many of these institutions “don’t move as quickly as we would like,” Sean believes their presence in the industry is inevitable. He gives the example of behemoths like Fidelity recently announcing a move into digital asset custody:
“I haven’t seen a big pullback if you consider adopting new infrastructure — at least in our world. Our partners worldwide, like Koibanx in Latin America, are working with dozens of financial institutions and banks to adopt blockchain and Algorand and leverage it for their infrastructure. They’re very active even in this climate.”
Plans in the MENA Region
Algorand has established a notable presence in Latin America and Europe (Italy, where its Turing Award-winning founder, Silvio Micali, is from). Now, the team is setting its sights on the up-and-coming MENA region. Already active in Nigeria, where the government is building a country-wide intellectual property wallet with its tech, Algorand is looking to establish a foothold in the middle east, hence holding Decipher in the United Arab Emirates’ most bustling destination.
“We selected this region [for Decipher] because we saw a great opportunity, we know this region is disciplined and focused on the quality of the project and we felt a good overlap between what we brought to the table and the UAE’s ambition for Dubai to be the first global city powered by blockchain technology.”
Algorand saw the potential in this part of the world early on. So in 2019, the team worked with UAE authorities to receive Sharia compliance as a blockchain. He explains:
“We were one of the first chains to receive [Sharia compliance].”
He says that Decipher is “a good launchpad to build foundations in this region and reignite relationships and conversations more formally as we go into the new year.”
What’s Next for Algorand?
Sean had earlier described Algorand as “pragmatically optimistic.” However, when we ask if he is concerned about the regulatory repercussions of coming out of FTX/Alameda, he chooses his words carefully:
“Concern is not the word I would use. I hope there is an intelligent approach to providing surety and safety for people using blockchain.”
He says there is a tendency to “lump all things into one bucket” despite the seismic differences between the various industry players. “Above all,” he says:
“My hope is that innovation is still encouraged in the blockchain space and that the appropriate levels of assurance are put in place around the exchange of value.”
What else is coming up for Algorand as we move into the new year? Sean pauses, “There are a number of things I’m most excited about,” he says:
“First of all, I’m looking forward to an end to tribalism in the industry. I’ve never liked that. There needs to be a more collaborative, ‘wins are shared’ approach and a greater desire to create simple, interoperable tools so people aren’t forced to choose one tribe over another.”
In the Algorand ecosystem, these tools are known as “Algorand state proofs,” which Sean describes as” genuinely transformative tech” and “the first step into a truly decentralized trustless bridge that will allow assets on any chain to be exchanged and interoperable with assets on any other chain without having to use centralized points of failure. That is pretty revolutionary. I am excited about interoperability and state proofs in Algorand in particular.”
A gondola glides past in the meandering creek below, and the old-world-themed souk behind forms a stunning contrast against the backdrop of one of the world’s shiniest and most iconic buildings, the Burj Al Arab, rising from the sea like a giant sail. Sean shakes my hand and thanks us for our time, and we wish Algorand all the best for 2023 as interoperability solutions in the crypto — sorry, “blockchain” — space open up in earnest.