Algorand & Frictionless Finance

Algorand has once again proposed a major protocol upgrade that significantly expands the range of decentralized applications (DApps), decentralized finance (DeFi) solutions, and processes that can be built on the Algorand platform. With this new suite of features all built directly into Layer-1, enterprise-scale distributed apps can be created without sacrificing performance or security.

Scroll down for existing details on Algorand Standard Assets, Atomic Transfers, and read about the latest updates to our Algorand Smart Contracts in Layer-1 functionality.

ASA

Algorand Standard Asset in Layer-1

In today’s economy, there remain many issues when it comes to the digitization of assets. These challenges include:

  • Access to global, digital markets
  • 24x7 transferability
  • Instantaneous settlement
  • Ease and enforceability of asset controls
  • Efficiency of administration, such as compliance and reporting
  • Ease and enforceability of asset controls

Asset tokenization on Algorand will solve these challenges and benefit from increased core security, simplified usage, and transaction finality on a high performance blockchain.

ASAs provide a standardized, Layer-1 mechanism to represent any type of asset on the Algorand blockchain. These can include fungible, non fungible, restricted fungible and restricted non fungible assets.

UNIQUE FUNCTIONALITY

Role Based Asset Control (RBAC): Optional and flexible asset controls for issuers and managers for business, compliance, and regulatory requirements. This includes:

  • Quarantine asset accounts for investigative purposes
  • Force transfer an asset where legal or other regulations require it
  • Whitelist model for privileged asset transacting, which allows only specific addresses that have been approved to transact within a specific asset (all others will be restricted)
  • Flexible asset reserve models for custom business requirements
  • Off chain asset documentation included in on chain asset definition

User Protections: Asset spam protection that prevents unknown assets that may have tax, legal, or reputational risk from being sent to users without their explicit approval (users must opt-in to accept new assets).

DIFFERENTIATORS

  • ASAs are incredibly fast and secure, as they are built directly into Algorand’s Layer-1
  • ASAs are low cost to execute, due to Algorand’s miniscule transaction fees
  • Easy and simple asset issuance for developers and enterprises
  • Universal interoperability of all assets issued on Algorand

MOST EXCITING USE CASES

  • Asset tokenization
  • 3rd party asset issuance on Algorand
  • Democratize access to investments
  • Disintermediate cross border transactions

EXAMPLE ASSET TYPES

FUNGIBLE TOKENS

  • In Game Points
  • Stable Coins
  • Loyalty Points
  • System Credits
  • Cryptocurrencies

NON FUNGIBLE TOKENS

  • In Game Items
  • Supply Chain
  • Real Estate
  • Identity
  • Certifications
  • Collectables

RESTRICTED FUNGIBLE TOKENS

  • Securities
  • Gov't Issued Flat
  • Certifications

RESTRICTED NON FUNGIBLE TOKENS

  • Real Estate
  • Ownership Registries
  • Regulatory Certifications

ATOMIC TRANSFERS

In a traditional economy, there exists a trusted or legal framework. On the blockchain, Atomic Transfers provide a trustless solution in Layer-1.

Atomic Transfers offer a secure way to simultaneously transfer a number of assets among a number of parties. Specifically, many transactions are grouped together and either all transactions are executed or none of them are executed.

UNIQUE FUNCTIONALITY

Truly atomic, there is no need for escrow or reliance on hash time-locked contracts. This is a new way of technical execution of complex transfers that is smooth and fast.

With Algorand’s miniscule transaction fees, Atomic Transfers are incredibly low cost to execute.

Supports all Algorand assets (Algos and any Algorand Standard Asset) and allows for multi party transfers.

MOST EXCITING USE CASES

  • Simplified and expedited debt settlement
  • Efficient matched funding
  • Decentralized exchanges, when combined with Algorand Standard Assets (ASA) and Algorand Smart Contracts (ASC1)
  • Instantaneous settlement of complex multi party / multi asset transactions
  • Any instance of a multilateral trade

ASC1

Algorand Smart Contracts at Layer-1

ASC1s are Layer-1 smart contracts that automatically enforce custom rules and logic, typically around how assets (Algorand Standard Assets or Algos) can be transferred. They are complex economic relationships made up of basic transaction primitives written in a new language called Transaction Execution Approval Language (TEAL) as well as PyTeal, a python language binding. Algorand has now updated the ASC1 functionality to include both stateless and stateful smart contracts.

This functionality enables exciting and innovative new ways to address existing inefficient and complex financial transactions. The addition of stateful smart contracts now delivers a full comprehensive set of layer-1 smart contract functionality.

In today’s economy, there are a range of existing transactions that rely on intermediaries to provide trust and execution. This leads to unnecessary delays and costs in the delivery to the consumer. Examples of these include:

  • Escrow accounts
  • Loan payments
  • Limit orders
  • Subscriptions
  • Collateralized obligations
  • & more

With trustless execution on the Algorand blockchain, cost and risk are lowered while allowing for instant settlement of these contracts. Removing existing development barriers, Algorand’s Layer-1 solution solves a majority of use cases with unprecedented speed, less complexity and significantly lower costs.

Algorand will continue to innovate on ACS1s to further advance the capabilities of smart contracts.

UNIQUE FUNCTIONALITY

  • Stateless & Stateful implementation, with stateless executing transactional approvals while stateful allows for the building of complex applications using TEAL. (For more details visit TEAL)
  • Scalable, Fast & Secure execution not currently possible on legacy platforms. ASC1s operate at over 1,000TPS and are final in under 5 seconds on a platform that is verified not to fork
  • Reduced risk with instant settlement through trustless execution
  • Low cost to execute with transactions that have the same fee as any other transaction on the Algorand blockchain at .001 Algos
  • Low barrier to entry and Increased speed to market with easier development and simplified templates for Stateless Smart Contracts and examples of different complex custom dApp for Stateful Smart Contracts (i.e. dApps for Voting, Stablecoins, Auctions, Crowdfunding)
  • Flexible Implementation where ASC1s can be applied to specific transactions, all transactions from an account, or fully powerful rich dApps

MOST EXCITING USE CASES

  • Escrow account creation
  • Loan payments & Fee Executions
  • Limit orders
  • Subscriptions
  • Collateralized obligations
  • Regulated & automated disbursements 
  • Programmatic recurring fees / recurring debt
  • Delegated high-security account management 
  • Interface with off-chain data providers
  • Cross chain Atomic Transfers
  • HELOC (Home Equity Line of Credit)
  • Decentralized exchanges
  • Reimbursement validation
  • Cross chain Atomic Transfers