Algorand; Committed to Innovation on DeFi
It will not be uncanny to say that decentralized finance came to be as a result of innovation. These innovations have since driven financing from the old centralized way to the new and improving decentralized way.
One way by which this has been possible is through the establishment of different decentralized finance (DeFi) platforms, blockchains and applications to meet the need for a variety of users.
However, among all, Algorand — a DeFi Platform — had consistently stood out. This is not unconnected to their commitment to developing a secure, fast and scalable network that attempts to satisfy the needs of users, enhance DeFi efficiency while maintaining its core simplicity.
Algorand first earned its reputation by building the world’s first open-source and permissionless blockchain that worked with a pure proof-of-stake protocol.
Since then, they have consistently upgraded and improved their blockchain through the incorporations of several features like the Byzantine Agreement, the cryptographic sortition model, the pixel signature scheme, the leader selection protocol and the gossip protocol to mention a few.
Only recently, Algorand once again pledged its full support towards innovation through the development of three key features on the system; the fast catch-up, stateful smart contracts and Rekeying, a part that has increased Algorand’s appraisal in recent weeks.
In today’s article, we will be taking a quick look at the functional overview of these critical elements in Algorand’s blockchain.
On Algorand, nodes are not static as new nodes can join the block at any given point in time. When a new node joins a block, it has to first download its whole transaction history right from the genesis block.
While this procedure can take up to days, it is necessary as it allows the new node to be at sync with other nodes of the blockchain in other ensure the smooth running of transactions.
Nevertheless, because of the time, it takes to download all the transaction history that had taken place on a block, Algorand introduced the Fast Catch-up feature.
This feature makes it possible for the new node to be fully updated with the block history by making use of catch-point snapshots. The new node creates these catch-point snapshots and can download block ledger information in batches rather than syncing every block individually.
This ultimately reduces the sync time to minutes instead of hours or days, and it is just as secure as when the syncing is done individually.
Developers and others who donate nodes to the blockchain could see their waiting time cut significantly. It is also an ideal feature because of its simplicity to initiate, as the fast catch-up procedure could be started with a single command at start-up.
The introduction of this fast catch-up feature will further increase the scalability of the system; thus, reinforcing Algorand’s commitment to speed, security and scalability.
Stateful Smart Contracts
There are two types of smart contracts on the Algorand network: the stateless smart contracts and the more recent stateful smart contracts.
While the stateless smart contracts work to either approve or reject a spending transaction, the stateful transactions serve as the logic of the system, allowing for the manipulation of the state of the contract.
This stateful smart contract runs on Layer-1, and it was developed to prevent a reduction in speed and increase in costs of smart contracts in the future. It was built to maintain speed (> 1000TPS), scalability, finality and security of the system.
Lending, borrowing, gaming, insurance, investments, customized assets and other DeFi scenarios are tipped to benefit more from this Layer-1 Stateful smart contracts.
This is another exciting feature of Algorand’s latest additions to their systems. It has since attracted appraisals from all and sundry and many DeFi users have begun to suggest Algorand as one of the best DeFi platforms available.
The Rekeying system makes it possible for holders of crypto wallets to be able to make changes to their private spending keys without altering their public address with which they use to receive crypto assets.
Recently in the past, this was not the case. Users who make changes in their private spending keys over fears of possible compromise or compromise in itself go through the hassle of generating a new public address with which they would be identified.
These users would then have to send their new public addresses to other individuals, vendors and institutions, notifying them of a new public address and before they can continue transacting on the network.
Innovation has and will always continue to be a mainstay in Algorand. Ceaselessly, engineers and developers of the network continue to do researches to improve upon what DeFi should be.
The recent developments of these three key features are not the lasts we shall see from the platform. The concepts of security, scalability and speed still need to be improved upon, and one way to do that is through groundbreaking innovations. On this subject matter, Algorand is no stranger. Let me know what you think about this in the comment box.
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