Participate with confidence based on Bison Trails’ expertise and experience on the Algorand protocol. Our engineers have supported the protocol since the testnet and worked with the Algorand development team on load testing, protocol upgrades, and protocol documentation.
Launched in June 2019, Algorand is a pure proof of stake (PPoS) protocol with open participation and transaction finality. It’s focus is on financial applications and enterprise use cases.
PPos is similar to PoS as it uses stake-weight to determine which node will be selected to produce a block. The key difference is how the consensus mechanism performs their calculations to select a validator. On most PoS protocols, nodes are randomly selected based on their proportion of staked tokens. On Algorand, the selection is per token. If an Algorand validator node has 1m algos on it, every one of the one million tokens has an equal chance of being selected, which results in the participation node to which it is staked proposing the block. The selected token, and not the node, receives the rewards for the block.
There are two types of nodes: relay nodes and participation nodes. Relay nodes are network hubs that communicate with many other nodes. By accumulating messages from participation nodes and the relay nodes connected to them, relay nodes can be more efficient re-propagating valid messages, allowing the system to maintain a higher throughput. Participation nodes run the consensus protocol, and communicate with each other through relay nodes. They ensure the security of the blockchain; as long as enough participation nodes run consensus honestly, the chain will not fork, even if all the relay nodes are compromised.
There is no set group of block proposers or committees on Algorand. Instead the unpredictable selection of those parties, performed every round, help ensure consensus-level security. Malicious actors can not know which accounts will be selected and therefore which users they should corrupt. By the time a malicious actor could know this information, it is too late to use the knowledge for nefarious purposes. Once the new round begins, and new users are selected for block certification, the information gained is no longer accurate.
With Algorand, users do not need to stake or delegate their tokens. Every token holder that has their tokens in an address online can participate in consensus. The user generates and registers a participation key (seperate from their spending keys) to be able to propose and vote on blocks. Each participation key must be linked to a participating node.
Every token holder with a minimum 1 ALGO is eligible to earn rewards. Tokens held in a non-custodial wallet automatically participate while those held with custodians or centralized wallet and exchanges depend on the policies of the custodian, wallet, or exchange.
Rewards are distributed approximately every 9 minutes, based on the circulating supply of algos and the current reward rate.
As of March 2021, the rate of inflation is 6.5%. The most up to date rate can be found on the Algorand block explorer.
All rewards accrue to selected token holder’s accounts. No additional rewards are provided to relay or participation node operators.
There is no slashing in Algorand.
Algorand recently put forward a proposal to decentralize governance of the protocol to Algorand participants. All Algo holders can volunteer to become Governors who will serve a quarter at a time and vote on matters of ecosystem development. Governors must lock up Algos to participate and will receive rewards for their time and commitment. Voting will be weighted by the stake committed to governance.
Algorand is a pure proof-of-stake protocol with open participation and transaction finality. Learn more