Stablecoin Use Accelerates on Algorand with Exchange Support that Provides Mainstream Community Access
This blog post was written by Stephen Duignan, Head of Marketing, Algorand Foundation.
As the leading scalable, secure, and fully decentralized blockchain network, Algorand has emerged as a go-to chain for the world’s leading stablecoins. Marking a major milestone for stablecoin accessibility, we are excited to see several leading exchanges announce their support for USDT and USDC, the two most widely used stablecoins, on Algorand, so that our community can start to realize the simplicity and benefits of these stablecoin offerings on Algorand. Up to now, USDT & USDC on Algorand has only been available to institutional and large business users. This week’s announcement brings the Algorand versions of these powerful stablecoins into broad community use.
Algorand’s ability to rapidly process the high-volume, high-speed demands of modern finance while offering reduced transaction costs, transaction finality, and robust security has led to an increase of stablecoins on the Algorand platform - including market leaders USDT and USDC.
Stablecoins operating on Algorand benefit from:
- Low transaction costs (0.001 Algo)
- Near-instant settlement ( <4.5s )
- Transaction finality
- Robust core security
- Simplified user protocols
- Easy token issuance or swapping for developers or enterprises
- Universal interoperability of all assets issued on Algorand
The potential of stablecoins for businesses and institutions is increasing, especially when leveraged on high performing networks. Many individual crypto users today are already aware of the power of stablecoins but have been frustrated by the limitations of the platforms that these amazing tools were originally built on. A commonly noted challenge has been the transaction fees associated with using stablecoins on Proof of Work blockchains (such as Ethereum). Significant gas fees have made using stablecoins for smaller, everyday transactions very difficult. In addition, the time to complete a finalised transaction on PoW networks can be up to 20 minutes. This period of uncertainty, not knowing if a transaction will complete, has been a further barrier to mainstream adoption of stablecoins. With USDT and USDC on Algorand, those frustrations are a thing of the past - now, your stablecoin transaction is guaranteed final after less than 4.5s, and, no matter what the size of your transaction, the transaction fee will be only 0.001 algo (or approx. $0.001c). Fast, almost free, global transactions are here - it's time for crypto payments to go mainstream.
A critically important aspect in evaluating a blockchain’s suitability for being a platform on which to build a stablecoin, and which is not listed above, has recently come into focus. And that is network stability and uptime. Having speed and scale is, to put it bluntly, useless without an absolute commitment to the robustness and stability of a blockchain. Some networks have recently experienced congestion or downtime that have made them unusable. Multi-hour downtime failures which impact millions of users is unacceptable to a project looking to build a global scale stablecoin. The Algorand mainnet went live in June 2019. Since then, the Algorand network has had zero downtime - or to put it another way, it has delivered 100% uptime from the moment of genesis to today (February 2021). And this is on a network with average daily transactions now running at 750,000 transactions per day and which has comfortably handled spike days with over 2.5 million transactions during 2020. The Algorand network is currently spec-ed to handle over 80 million transactions per day. With this scale and 100% uptime robustness, the Algorand platform can be chosen with confidence.
We’re excited to share some of the first exchanges bringing USDT and USDC on Algorand to users:
KuCoin have also launched a Chinese New Year / Spring Festival staking rewards competition in support of the launch of USDT and USDC on KuCoin.
Huobi: Huobi has shared that they will be supporting USDC and USDT on Algorand in the near future.
In addition to USDT and USDC on Algorand, several other stablecoins are also live on Algorand. While some are linked to major fiat (paper) currencies such as the Euro (Monerium), Candian dollar ( QCAD ), and the Brazilian Real ( BRZ ), there are also many innovative alternative stablecoins built on Algorand. Brixton Pound is a stablecoin, backed by UK Sterling specifically supporting the economy of the Brixton area of London. This is known as a Complimentary Community Currency and the digital version of this currency is being built on Algorand. Stablecoins can also be built on other asset classes rather than just linked to fiat. A great example of this is MELD, a token that is backed by Gold and Silver reserves. There are many more stablecoin projects testing on the Algorand testnet today ( you can see these test tokens using a block explorer such as https://www.algoexplorer.io ). All these projects have recognized the power of Algorand to be the blockchain platform upon which they can build payment, transactions, and financial applications at a truly global scale.