Algorand, The Foundation, and the complete lack of adoption

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With the 3AC, Hodlnaut fiascos, and Staci Warden’s absolutely unacceptable behavior on twitter, we’ve had many people say something to the effect of “Staci/The foundation is not the blockchain, the blockchain is decentralized.”

For the past few days, I’ve been thinking, “so what is the purpose of the foundation then?” The tech side of Algorand is done by the Inc… Why do we have a foundation?

The answer is actually fairly obvious when you start to think about the question: The only reason the Foundation exists is to bring adoption to the Algorand Blockchain.

Now, yes, it’s also there to distribute Algos to make the chain more decentralized, but that’s a fairly easy job, there’s no need to spend millions of dollars hiring dozens of expensive TradFi executives to do that.

So clearly, the main purpose, the mission statement, the goal of the Foundation is to bring adoption to the chain.

Staci Warden claims she has a great team, and that her team is working very hard… but where are the results?

Let’s face it.

The Foundation has failed to bring in ANY adoption to the chain whatsoever.

Before you try to argue with me and tell me that’s not true, think about it for a minute:

Virtually every single member of the Algorand Community is in it because of Silvio, MIT and the tech.

We don’t see this in ANY other chain; how many supporters of Solana even know of Raj or Anatoly? What about Avalanche’s community? Or Cosmos? Or NEAR? Or Fantom?

Silvio is literally single-handedly carrying the entire chain. Even the FIFA partnership was done through Silvio, not the foundation.

What has the foundation done to increase adoption in the chain? Lame 1800s style billboards? Fortune cookies? Some Times Square stunt that got ridiculed by the crypto community and criticized or ignored by the rest?

Okay, you can mention the ACE program and how they collaborate with certain Universities. But, what results have we seen from those? What tangible results have we seen in terms of adoption?

“Think long term” you say?

But why is it that other chains have seen immediate results and have gained developers and users?

All of these excuses, like “Algorand is a newer blockchain, we’re in a bear market, Algorand isn’t EVM so it’s harder to gain developers”…

They’re all just excuses. Solana, Avalanche, Fantom are all new. Cosmos is gaining great traction in the bear market. Solana and NEAR are both not EVM.

Not enough marketing?

In fact, outside of the algorand community, we’re starting to see people view algorand as the the chain that wastes huge amounts of money on marketing short term and doesn’t care about long term sustainability.

And I can understand that. I’ve never seen any other chain that has to resort to fortune cookies or that times square stunt. Or 100 million dollars in some drone racing league that no one watches.

So why is it that Algorand is not gaining any traction?

It’s not because of Silvio, and it’s not because of the tech, certainly.

But whatever it is, one wonders, when the only job of the foundation is to bring adoption to the chain, and they’re full of competent, hard working people… why have we not seen ANY results whatsoever, other than 3AC, Hodlnaut, and Staci Warden viciously attacking the community on twitter?

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I haven’t seen The Foundation doing much that is visible. They may be doing wonderful things but there is virtually no communication from them.

I also wonder what they are doing to fulfill their purpose. Hopefully we will see more communication from them and robust interaction with the community that has put their money where their beliefs are.

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Do you have any suggestions for what the Foundation could do that it isn’t? You’ve made a few comparisons to other chains, any things they’re doing well that the Foundation should try out?

The Foundation seems fairly active to me based on their News page and I’ve felt Staci Warden’s active presence on Twitter is pretty great for adoption and marketing. The market’s been pretty rough for the past few months but I’m still really happy with the amount of new DeFi and NFT communities that have appeared over the past two governance periods.

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I realized that my initial post seems to be overly critical of the foundation/Staci, like someone who’s angry because he’s holding bags.

That wasn’t my intent at all. Actually, the origin of this post was me wondering “is the foundation doing a good job?” I wasn’t sure. On one hand, it’s clear adoption isn’t happening; we went from 50k+ governors in the first round, to 32k this round, of which only 27k actually voted.

But is that just because of the bear market? There are also good things to look forward to; many protocols coming out with V2s, bringing more features and security… State proofs and 6k tps is finally here (soon)… TVL has gone way up (despite the fact that it’s not because of adoption and only because Borderless put their governance algos into folks/algofi instead… so other than artificially increasing a number, it did nothing) the foundation seems to always be super positive and optimistic in every one of their public appearances.

So I thought, how do we measure how well the foundation is doing? and I realized that the only reason they’re here is adoption. So that’s the only yard stick we should hold them up to.

I don’t doubt that Staci and the foundation has been working hard, but I think they may have lost direction somewhere along the way, and by pointing out the only metric that matters, hopefully we can help them steer the ship back in the right direction.

And we can have a clear and objective metric to hold the foundation accountable, so they can’t just pat themselves on the back and say they’ve done good and hard work without anything to show for it.

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Several points here:

  1. The Algorand Foundation (AF) is being radically transformed. The AF you know from pre-Staci was fairly weak, ineffective, and lacked the proper experience and leadership. Since Staci joined, the AF has grown in size, hired fantastic people, started doing more, genuinely making much better progress.

  2. It’s a bear market. In general, people are not getting into crypto when its 80% down, while they are also seeing their 401ks, stock market portfolios, and other assets all sharply declining with warnings of a recession. There’s not a lot of net-new crypto folks coming into the space. The idea is to be built out and ready for the next bull run and influx of users, while connecting with enterprises and governments to build out REAL use cases.

  3. The Hodlnaut Fiasco was an investment originally made by Sean Lee, previous CEO of the AF. Did Staci leave the money in there when she got there, yes. But imagine you’re hired into a new position to lead an entire foundation with a million moving parts…that had so many things wrong with it. It was understaffed, lacked talent in certain areas, wasn’t connected to the community…you’re going to come in and fix all of the highest priority items that take a long time to self-correct…which is what you’re slowly seeing now. What you’re not going to do is go through every investment the AF made, re-evaluate it, and do extreme Due Diligence…enough to uncover the Hodlnaut issue…in the first 4-6 months of joining. Does that mean Staci doesn’t deserve any blame? Absolutely not. She is responsible for the AF and its investments, and she took the blame for it…not even mentioning it was the previous CEO who made this investment and she was just keeping what was a seemingly working investment, going.

Give it time, the ship is going in the right direction. The only thing that still needs a serious fix that hasn’t really begun, is Governance. Everything else is at least trending in the right direction with better and expanded hiring with people like John Woods coming into the org. Results take time, and no matter what the AF does, short of getting Elon Musk to say Algorand is the one chain to rule them all as if he were Sauron…nothing is pumping Algorand’s price or adoption in the near term until macro situation changes. Keep building.

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Staci has been here for 9 months.

The bear market is not an excuse. Cosmos is gaining great traction during the bear market. Sean Lee is not an excuse.

The number of governors went down from 50.1k in period one to 27.6k this period.

The past 9 months, we have seen 0 adoption whatsoever. How do you know they’re going in the right direction? What indicators, what metrics are you using to measure the foundation’s progress?

Clearly, adoption has been negative.

The foundation growing isn’t a good thing. It means they have to spend a lot more money on management, which means that they have to dump more algos to fund all of those expensive people, and their runway will be much shorter.

Jack Ma always tells the story of when his company first got a huge investment from Masayoshi Son, he hired some really, really expensive marketing executive. But then he realized that the expensive marketing executive only knew how to work with huge conglomerates and constantly throws tens of millions of dollars on marketing projects, when Alibaba only had 40million in total.

Are the people Staci hired even a good fit? From everything the foundation has been doing, it seems like they’re treating Algorand like a huge, established multi-national conglomerate. That’s not what algorand is. Algorand is a start-up that still has a high chance of failure.

They need to be lean, fast, efficient.

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Do you want to provide specific examples of what you would like to see them doing? Cosmos is good, its actually 1/5 cryptos I hold, but they’re still down 65% from ATH…

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While other chains were onboarding users en masse as DeFi was ramping up, what was Algorand doing? It was vesting tokens as a ghost chain because it had an Algorand Virtual Machine that wasn’t mature enough to build a complete ecosystem on. Now, those users are comfortable with the ecosystems that they’ve migrated to. Algorand doesn’t offer anything uniquely compelling enough to make them want to go through the hassle of buying a new coin, downloading a new wallet, and familiarizing themselves with a new ecosystem.

Many of the people who came to Algorand during that time did so because of the native, passive rewards. Those have been phased out in favor of Governance, which has been a complete mess. It operates on a fixed, quarterly schedule that doesn’t make it convenient for new users to join. And the psychology of being paid out quarterly doesn’t help either - it makes the A.P.R. “feel” much less than other chains which pay out more frequently, even if they have a smaller % than Algorand.

Now, you’re faced with a chain that missed a rare window of opportunity to onboard huge amounts of users because it simply wasn’t ready to develop complex dApps on, has a less-than-ideal mechanism for rewards, has the image of poor tokenomics and high inflation (sure, it may be behind us on paper, but the court of public opinion is outweighing that), has the image of centralization with permissioned relay nodes (again, semantics can be argued as much as you’d like, but the court of public opinion is thinking that), has had poor price action since inception (that deters people before they even take a second step), and offers nothing enticing enough in its ecosystem that’s still playing catch-up to copy what everyone is already doing elsewhere. I deflect the question back to you: why should Algorand be gaining traction right now?

Poor timing and poor public image are two devastatingly difficult obstacles to overcome.

100% agree. And it’s worsened by the fact that they’re hiring many TradFi people who don’t seem to know much about this space. It’s evident that having a huge resume filled with irrelevant qualifications doesn’t substitute for the experience of being a native in this space when it comes to management and decision making. In my opinion, the Foundation couldn’t be much worse than they currently are if they cut down drastically on employees and expenses.

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I think they should first acknowledge that they haven’t achieved much in terms of adoption the past year, make a report to summarize all of the reasons why that’s the case, study up on how Solana managed to gain so much traction despite being non-EVM, study on how cosmos grew in the bear market… hire actual web3.0 natives who understand the space, hire people who have experience with tech start-ups and scaling networks effects based businesses instead of tradFi people who don’t understand these things at all and costs millions and millions of dollars per year.

Keep up measurements of adoption, real adoption and measuring everything they do against that; what is helping gain real adoption? What isn’t? Stop wasting money on the things taht aren’t working and throw more money in the things that are working.

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I really don’t think things are as bad as you paint them out to be. I see new users join the #algofam on twitter daily. I, and many others, have joined the Algorand community to participate in governance and explore the ecosystem having started my blockchain journey on Eth. By that measure, I’d say the Foundation is doing their job. I’ll not say that every move has been flawless, however that is a tough standard.

As for “acknowledging their failure and studying up on Solana” to paraphrase. What point will that serve other than to drive people away? Things are getting better or they aren’t as to adoption. As for Solana’s “tactics” for mass adoption, wasn’t it two people working in coordination to artificially inflate Solana’s TVL that is credited for its fast adoption?

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Hi I have several suggestions:

  1. Open discussion with community on weekly basis…

  2. Supporting developers who have proofed that they built something useful

  3. Making sure that algorand is decentralized and not centralized with weak point of the algorand foundation or early backers

  4. Making the governance useful

AD1. Discussion is really everything. Even though i have already many contacts to the foundation or inc, i dont see them really doing anything usefull… The discussion must not be only one sided but if there is good ideay they should adopt it. First event that I liked and I felt i did get listened was when John came to the Knigts of algorand event and there was discussion on what to do… I have also good feeling with Johanna and she can point to right persons, however i still miss the end result

AD2. I have built first open source algorand wallet, won several hackathons such has Swiss blockchain hackathon, Encode hackathon, AlgoHackJam, DAO Hack, Bitcoin bankathon, … and created the products which are on mainnet such as Aramid ETH2Algo bridge, VoteCoin, AWallet, Algorand payment gateway, Algorand directory, Open algorand node directory, i provide the docker images for kubernetes to run the algod nodes, indexer nodes, and KMD nodes, working on diatomix, and my long term vision is the real estate market GlobDREM … I have suggested several standards which the foundation did not addopt yet for example ARC-0014 or ARC-0017 with demo and implementations … Even authentication with graphql database with websocket feeds…

However from my approx 10 tries to get the grant i was successfull only with one and the budget was also cut in half… One would say that you must have successfully delivered the product with grant to get another grant, but my recent request to create open source algorand explorer was denied as well. For the record my successfull grant was to make the encrypted voting possible in the vote coin specs and its fully operational in the open source app.

I believe there is corruption within the foundation on who gets the grants. I think the foundation should make all applications open so that they have public oversight. Also it might help with other people to get ideas on what should be built and if they can built it faster or better they might just get inspired thus the projects built on algorand would be better. Not communicating the reason why the grant was declined or what can be better to get the grant approved is terrible decision.

I do understand that the foundation got flooded by grant requests, but stopping completely this is not good decision in my opinion.

AD3. I do not trust any decision of the algorand governance because i believe that there is a person or small group of persons who hold more than 2 billion algos and they communicate with each other. They can affect any decision in the governance as it is now. I dont know what should happen so that someone persuades me otherwise, but clarity on who are the early backers is not strong side of the algorand. Also i do not think they should try to sell the tokens asap because i dont want the algo price to go below $0.1 …

The absolute centralization point of algorand is the DNS records on who is the relay node runner. The system of rewarding of node runners must be different in order to make it decentralized. For the record i am one of the node runners… not the one who receive $10000 per node but way less. Even with limited resources i am able to run the nodes in HA mode. If there would be a budget on whoever runs the node gets the share from this eg hourly rewards according to the performance of his node, we could consider this as a competition between node runners and the cost efficient solutions will have long term sustainable income. The same should apply for KMD nodes, and indexer nodes. I believe we really need to split the archival function of the node with the relay function of the node.

Another point of centralization is KMD nodes. Until now noone ever wondered why general person cannot make his account public. I have made kmd open spec, and implemented that anyone can make the account online within his selection of public KMD nodes (again without any incentives from the foundation). I believe that people should get rewarded if they protect the network as well as the public KMD nodes should get rewarded. Something like mining. Can be motivation of anyone to hold algo in his own account and easily marketized. Who was protecting the network until now? Is it really decenteralized?

AD 4. Governance right now is terrible. 1 or 2 decisions per quarter? You should really think on how to run a DAO when you have blockchain here. What about to hold the DAO decision on every git pull request to the algorand codebase? What about decision on which grants should get approved? What about combining 1 person = 1 vote with 1 token = 1 vote ? What about the security of the vote? For example if those early backers with billions of algos see the results in 14 day voting sesion window just a day and they do not agree to it, they might just overrule the vote… Why not to implement encryption with voting so that the results are visible only after the voting session ends? There is already standard for all of this and foundation has zero communication with zero support to improve this.

For the record the Algorand is my choice #1 mainly for the tech… However i still see there might be improvements done :slight_smile:

@Massimo @fabrice @ian … please bring the discussions about my proposals to the foundation

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If the foundation doesn’t act in the interest of higher ALGO prices, we can create dApps and/or DAOs on the blockchain to take advantage of lower ALGO prices. That seems like the obvious solution for developers, irrespective of what ALGO does.

That is the beauty of ASAs! If the price of ALGO is lower, they are relatively less expensive to exchange; there isn’t any need to list an ASA on any exchange when it operates only within the context of a dApp and/or a DAO.

For example, DAOs can create unlisted ASAs to attribute contributions as ownership portioning, issuing and exchanging internally, paying fractions of a cent in ALGO per transaction. I’m working to create DAOs in that way.

At the moment, trust is requisite; yet we can know who we’re trusting. This KYC means Know Your Co-owners. I will be launching one soon, so stay tuned!

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Can you please tell me what are you basing this opinion on? Are you a high level employee at the Foundation who has insight into what’s going on? Or maybe you built a business of that scale and you’re currently running it? I’m going to make and educated guess that the answer to both of these questions is no.

It’s getting tiring to constantly read these “Algorand Foundation is doing a good job” comments when so many things point otherwise. Let’s go over some of those:

  • OTC selling ALGO $76M ALGO to 3AC at discounted price without properly vesting them
  • Not a single thing about USDC holdings on transparency reports
  • Losing $34M in Hodlnaut fiasco
  • Hiring Ryan Terribilini, a guy with controversial history which could possibly include money laundering. After an expected backlash from the community related to this, Staci pretty much tweets: “If you don’t like who I hire sell your ALGO and f*ck off”
  • Pushing the “We are focused only on institutional adoption” narrative. It should be obvious by now that this kind of attitude ended up backfiring. Algorand failed to take an advantage of L1 hype which was a great opportunity to grab a decent market share of smart contract market. Not enough developers were onboarded and there was barely any retail “adoption”. Now, there’s barely any retail traders interested in trading ALGO which means lower trading volume and liquidity.
  • Keeping +98% of holders underwater
  • Staci admitting that there is nobody in charge of governance in recent Twitter spaces. This pretty much confirms the suspicions that governance voting is something completely trivial and insignificant, especially if you consider that big wallets hold the majority of the stake. This is pretty funny considering that the only incentive one might have to hold ALGO right now is actually governance.

I’m looking forward to seeing which one of these things inspires confidence in you that the sheep is being steered in the right direction.

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My comment was largely around the fact that the previous administration of the Foundation was terrible, and caused a lot of issues that Staci has started to correct. Staci has created some of her own issues, but the recent hirings I think point to better decision-making going forward. (John Woods, Deirdre Halligan, a new marketing exec from Silicon Valley is coming in January).

  • The hodlnaut fiasco was an investment made by Sean Lee, that crumbled after Staci took over. Not exactly Staci’s mistake, not saying she isn’t partially to blame for not re-evaluating every investment when she got there…but the blame falls more on Sean here.

  • Staci joined as the entire market was collapsing and then FTX went insolvent. She’s grown the AF and implemented heads of NFT, DeFi, Web3 etc, so progress is being made towards retail.

I personally think the AF is doing a below average job at this point, but I think the previous regime at the Foundation was absolutely god awful, and Staci needs more than 6 months to show that she can right the ship, especially when her first 6 months have been in a straight decline bear market.

That being said, Staci admitting nobody was in charge of Governance at the foundation is actually insane. It should never have taken her this long to appoint someone, it honestly is reflective of how much the Foundation cares about passing off power in my opinion. I don’t expect them to relinquish a lot of power, but there has to be a plan to slowly decentralize it. I too was IRKED that literally, no one was in charge of this for this long. I wrote the comment you quoted in early September, so 3 more months of developments have happened since then.

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Oh! I didn’t notice that the person that replied before me actually resurrected an old thread, wasn’t paying attention to the dates. A lot of the things are obvious now which weren’t that obvious 3 months ago.

My sincere apologies to you :slightly_smiling_face:

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I won’t speak to your other points, however there is someone in charge of Governance currently. Adrianna Belotti, a veteran member of the Algorand Foundation.

Also, I don’t really see what calling into question Conscious’ employment or entrepreneurial history does for your case.

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she already blamed Sean Lee for 3AC and owned up to Hodlnaut being her idea

the most disgraceful act is not losing $35M, she probably had good intentions to keep the runway longer, the thing that gets most people upset is the endless dumping of ALGO and spending spree on things like bike charity. $15M might not be much in JPM but its 1 Governance Reward. no accountability, no explanation, no KPI on how the charity would actually help adoption.

the community gave 3 years to Kokinos and Callaghan. there is simply not enough funds to give Warden another 3 years to rekt Algorand. losing $35M even at JPM would most probably get you fired - but Staci being one of the board members probably won’t fire herself.

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@scholtz you have been contributing here for a long time, has there ever been a time when management contacted you or decided to discuss with the community openly about non-technical issues raised?

the Foundation / Inc is centralized and they obviously have no performance review or incentives to explain or refute open criticism. this is almost like asking Trump to evalute his own performance and we all know he will say its perfect 100 points.

there is simply nothing the community can do, even this “forum” is basically a one way streak where Warden probably don’t care to read because she is getting so much heat (and rightly so). Algorand will go nowhere because management believes they are doing the perfect job and there is no way they can improve.

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I have been invited to Eth Denver 2022, and i met few members from algorand team… It was very good experience.

I think this migth not be correct… The management tracks the forum from time to time, and tries to go with discussion with developers… I think they like little events with more attendees… for example when there was Knights of algorand event John has come and there was quite open discussion… Also for example at the Fam sunday twitter space events there seems to be always some people from the foundation. We had last sunday the open discussion about the xGov… There was also discussion on how they feel is the best way to get in touch, and in this specific case they suggested to create comments at arc33 github page and comment specific line.

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thanks for the update Scholtz, good to know they still have a shred of decency to address some dev related issues and conveniently ignore questions on budget, runway, marketing, KPI, sponsorships etc.

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