Aligning Algo Circulating Supply Metrics for Algorand Ecosystem

In preparation for Community Governance, the Algorand Foundation has worked with its partners within the Crypto Research ecosystem to ensure that a consistent view of circulating supply is applied across the key resources for blockchain information.

Most notably, this means that the Algorand Foundation expects to see a new value for circulating supply being shown by our Crypto Research partners this week. This more accurate metric should display a circulating supply of approx. 5.3Bn Algo.

While this is a change from the previously reported metric definition, it does not reflect any change in actual supply.

See for details

Great news… this means that algorand will finaly hop to top30 crypto at ? :slight_smile:

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I think it worked… #21 now…

#20 now on Coincodex. But not because they “found” some billions, but for the unexplicable price rise. Anybody has any theory for this 50% price rise? Then the 20 % price fall?

Update: 09-Sep, # 17 on Coincodex

#17 now… passed the XML, ETC… reaching to pass the LTC soon

Wishful thinking. I was at the Governance webinar.
Q5: How can ensure that the richest don’t control the network?
A5: “the richest put more skin into the game”. And my questions were essentially simply omited. :frowning:

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I wasn’t on the webinar… but my view of your question “How can ensure that the richest don’t control the network?” is that it’s not an issue; let me explain why:

  • When we’re saying “the richest”, we’ll both agree that we’re talking about someone with massive amount of algos ( i.e. in the millions, if not more ).
  • Such a person would have many millions of reasons to protect his investment.
  • You could argue that this person would try to steer the network into a less-democratic direction. That is true, but it would also make Algorand less of an attractive network to use. At that point, the value of the Algo would go down, and the person investment would be negatively affected.
  • There is the risk of someone steering the network onto a “bad” direction and then “abandoning the ship” right away. I believe that there are two “instruments” that would protect against that :
    • One is the fact the the Algorand Foundation monitor and organize all the proposals. I would hope that they would filter out proposals that are obviously not beneficial or malicious.
    • Another one is the fact that governors are required to stake their Algos. This, in theory, should provide some degree of protection for the network, since a malicious goverenor would get negatively impacted by a malicious governing move.

Last, keep in mind that Algorand has always been a PPoS network. A person with sufficient amount of stake would always be able to control the network. You might not like that - but that’s part of the network design. There are ways to limit the control of a single individual, but those seems to go to realms that are beyond technology. ( i.e. identifying the person behind the account(s) )

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Lets have a good day, and not argue on how algorand can be more decentralized… Just one improvement of your statement, what if there would be independent oversights over the proposals, and algo foundation would be one of them?

Algo is #13 right now… Above LTC and BCH… Lets make the DOGE next target :slight_smile:

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Dear @tsachi
It wasn’t my question. Alas, none of my questions were on the agenda.
@scholtz Dear Ludo, Let it be!

@tsachi Thank you for a very thoughtful answer, which is a much appreciated addition to “the richest put more skin into the game” that @Maugli quoted from the webinar (I wasn’t there either, so just going off of Maugli’s quote as is).

Given that I too have been a critic of the governance plan, I just wanted to add a clarification that I have never had any issue with the PPoS design to validate transactions in a way that the rich can control the network. I think that is a perfectly valid design for that purpose and works beautifully in practice too.

In my opinion however, the same “1 algo = 1 vote” design does not work well for governance in an environment where a small number of people already own most of the Algos that will ever be in circulation.

It just hands the power of future governance to those few lucky individuals who happened to be in the right place at the right time when the billions of Algos were distributed, even though good governance should also be about all the future Algorand users who may not even own any Algo yet.

And that is where I see a major conflict of interest, as Governors with massive Algo-wealth are incentivized to make decisions that will increase their own wealth, which is not the same as doing what is best for Algorand in the long term, or best for all Algorand users (including the future users who don’t own it yet). At times these goals do align too of course, but that just means we are lucky when that happens, and not that they are actually one and the same.

A quick (and simplified) example using tokenomics to emphasize the point that whales maximizing their profits is generally not the same as what’s best for all Algorand users (in terms of utility, adoption, etc):

If we think of Algorand purely as a currency (ignoring smart contracts etc for now), a stable price of Algo is desirable, or otherwise it would have a negative impact on it’s intended utility (of being a currency), which would then slow down it’s adoption by the general public.

A more democratic governance that benefits from a wider adoption and increased utility, would therefore want the supply of the tokens to increase with the demand, in order to keep the price more stable.

Whales on the other hand would maximize their profits by doing the exact opposite - trying to limit the supply of the tokens, in order to create a deflationary currency that increases the value only for the existing Algo holders - even if it slows down the adoption and reduces Algo’s utility for everyone else. (While it’s true that in the long run these actions could also be harmful to the whales’ own holdings due to lack of adoption by others, as long as the prices go up in the short term, they can keep cashing out along the way and make a nice profit even if in the end it drives the whole thing to the ground.)

One question that I haven’t thought before though, is whether it makes a difference if we think of Algorand as a currency or as a smart contract platform (or a hybrid of both)? For example, if we completely ignored Algorand’s utility as a currency and only valued it for it’s smart contracts, would we still care about stable Algo prices, or does that make it ok for Algo to be deflationary without impacting it’s utility as a smart contract platform?

Let’s start with a counterquestion: what makes you think a minority increasing their wealth is a worse outcome for me than a case when the majority increases their wealth at the expense of the minority?

Are you trying to suggest that you as a dictator will be the best outcome for all of us? :laughing:

Absolutely not - me in that sentence represents the average Algorand blockchain user.

I think we should agree that the increase of wealth of poor is better for the economy. The main argument is that the spending power is distributed among many people and when you have eshop, you have more potential customers and the economy is circulating faster thus it is much better…
I hope we can agree that the centralization of power of distribution of money between the rich is not good because the monopolism is the basic behavior of the economy. If there are no tools to prevent it, it will lead just for higher concentration of money in the rich wallets. The rich does not have intention to give their money to poor.
I suggest reading following:

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Dude, that’s a bunch of empty phrases and completely irrelevant bullshit talks.

What makes you think that people holding a small amount of Algos are poor? Give me even a silly and/or dumb proof for that.

What makes you think those are rich people behind those accounts? What ensures you that they are not forces capable of stopping the hunger in the world (although that’s not my concern here in this thread, just kind of following your ideas)?

And the crucial question rephrased and repeated: what makes you think that a minority increasing their wealth is a worse outcome for bringing more potential customers than a case when the majority increases their wealth at the expense of the minority?

Excellent comment @SGen and 100% agreed.

I too have thought that this is all common knowledge, and that most “rich getting richer” problems in the world are not caused by lack of understanding, but are simply a result of the incentive structures (e.g. a rich minority having too much influence in deciding the rules for everyone else).

To you first formulation of the question I would have answered that the “minority increasing their wealth” is not worse for you or for me personally, as I too am an Algo-holder and certainly benefit from Algo’s increasing market price. But we can do better than to think only of what’s best for “me”.

Your second formulation of the question is harder, because the way I read it the answer is already in the question. You are asking for a proof that helping the majority would “bring more potential customers” than only helping a small minority? Is that not a tautology?

Is that not a tautology?

It’s not.

He has brought a new factor into the discussion where me would profit if there would be more people in the process.

So I’ve asked what proofs he has for that claim that increasing the wealth of the “rich” would be less beneficial for the goal of increasing the number of users/people than increasing the wealth of the “poor”?

And again, I don’t want to comment your silly theories that the closed environment principles are valid here.

P.S. Please stop talking about “Algo holders”, I’m not here to talk about that social construct the way you comprehend it, I’m here as the Algorand blockchain user and the only price I’d talk about is the minimum transaction fee.

Given that we are writing on a public forum, my responses were not written just for you, but for all other readers of the forum too. Therefore we should continue talking about all of the issues that are relevant to Algorand, with “Algo holders” being as relevant as any.

We are all free to choose which sub-discussions we participate in and which we do not.

Well, you entered this sub-discussion after my call for answering my question, and of course that my remark is related to that sub-discussion only - there should be no “Algo holders” in a meaningful answer to my question.