Algorand now Supports Smart Contract for DeFi Applications

Atomic Transfers, stateless smart contracts and Algorand Standard Assets (ASA1s) now possible on the blockchain

By · Aug 20, 2020 . 6min read

Algorand blockchain joins the league of blockchains with smart contract capabilities as it rolls out the latest update to woo DeFi application builders and users.

In a blog post, dated August 19th, Algorand Foundation explains the core reason for the timely releases of this update. The key element of the launch it says is stateful smart contract functionality integrated into layer-1. This will enable the Algorand blockchain to perform a slew of new functions. This ranges from Atomic Transfers, stateless smart contracts and Algorand Standard Assets (ASA1s). It claims the Algorand blockchain now imbued with smart contract function will enable anyone to create DeFi solution and dapps

that can scale to billions of users, tens of millions of daily transactions, with negligible transaction fees, all while taking advantage of the layer-1 benefits of the Algorand protocol

Accordingly, speaking on this update, Silvio Micali, founder of Algorand, said:

“DeFi gives the world access to an essentially unlimited number of financial products and services. It’s important for the new generation of dApps not to be stalled by the shortcomings of the first-generation blockchains,”

With the present happenings in the blockchain sphere especially concerning the mass appeal threshold most Layer 1 platforms are pursuing, Silvio brags about Algorand:

“Algorand’s protocol serves as a solid foundation to power truly frictionless applications, and our approach to smart contracts makes them high-performing and functionally advanced enough to rival today’s existing financial services.”

Will Alogarand with its Smart Contract update be able to sway DeFi users who are paying high transaction fees away from Ethereum?

With DeFi Summer blazing in and fuelling the bull run we see in crypto sphere today, the major issue remains rising gas costs on DeFi’s go-to platform – Ethereum. Specifically, the average transaction fee on Ethereum network hovers around $7. Therefore, this is about the highest transaction Ethereum network users have ever had to pay.

Ethereum usage transaction fee, perhaps Algorand new smart contract functionality may attract DeFi users away from the latter

Again, this is obviously too high for the average Joe who might want to send $10. Consequently, many Layer 1 protocols keep pitching Ethereum fans and devs to migrate. Algorand now being the latest.

However, some think otherwise, especially Ethereum has attained critical mass. A good example of this is below:

To conclude, let’s see if Algorand can pull a fast one against Ethereum with this latest milestone achieved.

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