Editor's Note: This article comes fromBlock beats BlockbeatsEditor's Note: This article comes from
Block beats Blockbeats
Block beats Blockbeats
(ID: BlockBeats), author: 0x29, the original title "The second round of auction must go up? What do the industry think of the Algorand Dutch auction", published with authorization.
At 6:00 pm on June 19th, Algorand, the blockchain star project second only to Polkadot, started its first Dutch auction of ALGO tokens. In just 4 hours, 25 million ALGO tokens were invested The buyers snapped it up, and the final transaction price was $2.4. The project party has completed a financing of US$60 million, while Algorand has completed an equity financing of US$62 million before that.
After the auction, many people began to calculate the market value of Algorand. According to the total amount of 10 billion, Algorand's market value is 24 billion US dollars, directly squeezed into the top ten of the cryptocurrency market value. It has also been suggested that Algorand's market capitalization should be $6 billion, but these valuations are not accurate.
"The market value is calculated according to the circulation, and the circulation of Algorand is 37.5 million pieces." Discus fish from Shenyu mining pool told BlockBeats. The 25 million auctioned on the evening of the 19th, plus the 12.5 million previously unlocked by private placement, the current circulation is 37.5 million. According to the circulation, the most accurate market value of Algorand is 90 million US dollars, or about 630 million yuan. If all the tokens that have been and will be used for auction are counted, Algorand's market value is 50.4 billion yuan, and it can directly enter the top 5 according to the current ranking.
The Dutch auction is different from the common price-increasing auction, where the highest bidder wins. The price of the Dutch auction is from high to low. The initial price of US$10 is the highest price in the whole market, and then the price will drop gradually over time until all ALGOs in this auction are sold out, or the price reaches the bidding reserve price, the auction will end, and all bidders will Final liquidation price settlement.
Not only that, but the Algorand Foundation has also set refund rules. If investors are not satisfied after bidding, they can apply for a refund. If the settlement price is above $1, investors who have successfully auctioned but want a refund can apply within 7 days after one year, and 90% of the investor's funds can be returned. If the settlement price is below $1, the percentage of investors' money returned will decrease as the price falls.
The private placement price of Algorand's token ALGO is US$0.05, with a total amount of 10 billion. The total amount of tokens used for auction is 3 billion. The auction lasts for 5 years, and there are about 2 auctions per month. The first auction on June 19th will have a total of 25 million ALGOs, with a starting price of $10 and a reserve price of $0.10. According to the price of this round of auction, the income of private equity investors has been as high as 48 times.
This is not the first time Dutch auctions have appeared in the currency circle. The last project was the once famous EOS, which was auctioned continuously for a year in Dutch style. Algorand has changed its style, with an auction lasting 5 hours, and a total of 120 auctions are expected.
During the auction process, investors are actually playing games. Block Rhythm BlockBeats understands that most institutional investors, in order to ensure that they must buy ALGO, place orders at $10. This also led to 10 minutes before the auction, when the price was still at 10 US dollars, the financing amount was already 19 million US dollars, which was close to 1/3 of the total amount.
This auction method also made Algorand a lot of attention. Not only did the media report the live broadcast, but also many exchanges acted as auction agents for investors without Algorand KYC, which also earned user traffic. Bitpie and other digital asset wallets also completed software updates before the auction, supporting Algorand.
As of press time, a number of exchanges have begun to support Algorand's market transactions, including BitMax, Huobi, OKEx, KuCoin and other mainstream exchanges have announced support for ALGO transactions.
With the 5-year token auction method and the settlement price of 2.4 US dollars, what do the bigwigs in the currency circle think of this main network that has not yet been released, and it is possible to book the top 5 star projects by market value?
secondary title
Some people think it is overvalued, some people think it is bullish
"We see this auction as a first, but important, step toward a fairer world where everyone has the ability to participate in economic prosperity." This is Algorand's own evaluation, but obviously Not everyone thinks so.
“$2.4 is simply too high,” said a veteran investor in the industry who did not want to be named. In his view, the Dutch auction takes advantage of investor FOMO psychology. And from a technical and conceptual perspective, he is more optimistic about another star project, Polkadot.
Mable, a partner at Nirvana Capital, doesn't see it that way. "The price is reasonable." Mable told BlockBeats. She believes that the price of $2.4 should be divided into two parts, one part is the market value of Algorand, and the other part is the money to be refunded to investors after one year, which is equivalent to an insurance premium, and this part of the cost can be transferred at a premium of. And in Mable's view, the settlement price of the second round of auctions is likely to be higher than $2.4. "There are already funds in line."
And after seeing so many star projects in the industry, Mable believes that the Algorand team has considered all aspects very well. "Whether the private equity team chooses to unlock the coins every day, every week, or every month, it will take two years to fully unlock them. Algorand has carefully thought about these issues." Mable said.
Dovey Wan, founding partner of Primitive Ventures, also expressed her views on Algorand in her own article. She used "financial engineering" to describe Algorand. "As long as the price in the secondary market falls by 10%, no one will sell it. If the price falls by more than 10%, people who participate in the auction will buy it because they can arbitrage at a higher price," she wrote. In her view, this is a very clever game.
In addition to their views on market value, many bigwigs believe that Dutch auctions are a good marketing method.
"(Algorand Dutch Auction) can be refunded. This model is very good." After talking about the circulation, the founder of F2Pool Discus told BlockBeats.
"Before the blockchain actually landed, everyone was "air coins" to some extent. Some exchange investors knew that they were air coins, and they still flocked to them; Tron is so good at marketing, and its market value can rank among the top 15. If a team with such strong Algorand technology does some marketing, it is not unreasonable to have a higher market value than TRON.” Wang Mengdie, founder and CEO of Odaily, believes that the market Performance can reflect the value and popularity of the project, and it is a "fair yardstick".
She also believes that the success of Algorand's Dutch auction model has also opened up opportunities for many project parties, "I have heard that many project teams are studying this model and plan to use Dutch auctions to issue coins, but imitators can Whether it is successful or not depends on the background and strength of the blockchain project team.”
Connie from the first-class warehouse thinks that she should focus more on the consensus algorithm of the project than discussing Algorand's Dutch auction. The consensus algorithm proposed by Micali is based on the basis of cryptography to solve the impossible triangle problem. This new algorithm is based on the improvement of the Practical Byzantine Protocol PBFT, with special emphasis on the random generation of block packers, and the introduction of "Verifiable Random Function VRF" , this is different from the existing POW and POS mechanism, and it is very worth looking forward to. But she also expressed some concerns, "After all, there are too many variables in the 5-year auction, and the blockchain market is developing too fast. However, the update of technology and algorithms is often linked, which will lead many other projects to follow suit. Dive into it and explore."
secondary title
not blindly optimistic
text
As a star project second only to Polkadot in attention, Algorand's team, marketing model, technology, etc. are all worth discussing, but this project is not perfect.
The issue of centralization has always been a hot topic of discussion in the industry. EOS has been criticized for its excessive power because of the 100 million tokens held by Block.one behind it. But the power of the Algorand Foundation is not small.
