DeFi, Algorand and Enterprises

Decentralized finance (DeFi) refers to the economic exodus from centralized towards decentralized technologies such as blockchain. The market failure exhibited in 2008, leading to a depression, sowed the doubts in the heads of users about banks and financial institutions. Ever since then, there has been a constant effort to move away from centralized systems and blockchain has been at the forefront for movement towards decentralized systems not only in terms of technologies but also responsibility. From simple peer-to-peer and cross border payments to automated loans, DeFi has emerged as one of the most happening sectors in the blockchain space, with a range of use cases being explored by enterprises, institutions, individuals, etc. 


Algorand is an open source, secure, scalable, transparent, permissionless, blockchain platform which is the first blockchain using Pure Proof of Stake protocol. With features such as Atomic Transfers, Standard asset tokenization and Layer-1 (on-chain) and Layer-2 (off-chain) smart contract options, Algorand provides a great platform to design DeFi solutions.


DeFi solution Categories and Use Cases for Enterprises on Algorand

Multiple use cases have been developed and are under development with more and more individuals and enterprises exploring development on Algorand. Some of them have been categorized and listed below:


  • Expanding Methods for transaction and exchange of value: With use cases to enable transformation in the insurance industry as well as P2P and cross border payments, enterprises have the option to check out existing solutions (mentioned below) or customize a new solution for themselves. Algorand blockchain is being used by Attestiv, a tamper-proof media validation platform, to enable digital transformation across the insurance industry to reduce insurance fraud. Financial transaction use cases including cross border transactions are being  explored by Monerium, world's first authorized provider of licensed e-money for blockchains, on the Algorand platform. 


  • Building new financial tools, processes and services: With use cases in accounting, incentivization and rewards, content monetization, fundraising and other financial tools, Algorand has slowly and steadily become a preferred choice of enterprises to build blockchain solutions. Verady,  a leading cryptocurrency tax and accounting software company, announced that its platform Ledgible will integrate ALGO into its software, to provide integrated accounting and to expand the growing suite of digital financial products and services that are available to Algorand users. Props, a network built to reward application users with a financial stake in the network they contribute to, is moving to Algorand to support the scaling activities on its PropsChain. PlanetWatch, the world's first immutable air quality ledger, will store data gathered from air quality sensors onto the Algorand blockchain, and subsequently reward contributions to the ecosystem by distributing the PLANET token, a utility token, to sensor owners. RHOVIT, a gamified content platform, is instituting a better monetization method for content creators by building on Algorand, to provide enterprise grade scalability, tools and creative methods for users to mine and earn. Stonize will be using Algorand new features, Atomic transfer and Layer-1 Smart contracts to provide its customers with faster and more secure clearing and settlement processes. World Chess will raise funds by issuing a digital token on Algorand’s Blockchain. IDEX will work closely with Algorand to develop advancements for financial tools and services to support.


  • Bringing new financial assets on chain: With features such as Algorand Standard Asset (ASA), Layer-1 (on-chain) and Layer-2 (off-chain) smart contracts; use cases catering to tokenizing assets, issuance of Central Bank Digital Currency (CBDC) and stablecoins on the Algorand blockchain have increased. Asset tokenization on Algorand for different classes of assets has been explored by companies such as Republic, Realio, Meld Gold, Securitize, IBMR.io, AssetBlock. While some are exploring building accurate, transparent, secure solutions to compliantly issue and trade asset backed tokens for real estate, gold, etc. and interconnecting decentralized ecosystems across global jurisdictions, others are developing a Microfinance Platform to enable financial inclusion of the urban working poor. SFB Technologies issued a CBDC using the Algorand blockchain for the Marshallese Islands - the Marshallese sovereign (SOV) to be used along with USD in the islands to bring about financial stability and curb the inflation paving the way for central banks of other countries to explore the same. Tether (USDT), the first stablecoin to be issued on the Algorand blockchain and  leverage high speed, scalability and transaction finality features of Algorand, has opened the doors for stablecoins to be issued on the Algorand platform.

  • Innovating on the intersection of public and private solutions: Applications of Algorand have been explored as well as are being explored in digital Identity management, voting, telecom and other sectors. Fondazione Ugo Bordoni will be experimenting using the Algorand blockchain to develop innovative applications and services for citizens, businesses and public administrations. 


Insights

For a frictionless finance system, Algorand has an apt set of features with continuous improvements being introduced and ready to be tested as well as implemented, more enterprises will be exploring using the Algorand blockchain - something which is inevitable. Moreover Bleumi, Syncsort, Algorand Foundation and others are not only helping enterprises to build solutions on the Algorand platform but are also making their entire journey of blockchain implementation much smoother and seamless.