What is Algorand - ALGO guide

Algorand: built for scalability 

Algorand is a core blockchain like Ethereum and Solana- known as a Layer 1 in the crypto community- which uses a variation of the proof of stake (PoS) consensus mechanism called ‘pure’ PoS to process transactions and secure the network. The protocol is built for scalability, capable of handling up to 10K transactions per second (TPS) while charging low fees. 

Key figures

• Launch date: 2019

• Total value locked (TVL): $31,0M (as of 30 June 2026)

• Daily active users: 12,760 (as of 30 June 2026)

• Market capitalisation: $740,1M (as of 30 June 2026)

• Network fees: $153,380 across the whole of 2025

Algorand at a glance

Consensus mechanism: Algorand’s pure PoS encourages participation by allowing holders with as little as one ALGO (the protocol’s native token) to earn block rewards. What’s more, it doesn’t require you to lock up your stake.     

Scalability: Algorand claims it can process up to 10K TPS, although its highest recorded volume according to Chainspect is 5,716 (as of December 2025). The network’s finality, the time it takes for a transaction to be recorded on the blockchain and become irreversible, is nearly instant.  

Low cost: Algorand’s transaction fee is 0.001 ALGO, which at $0,0828 per ALGO on 30 June 2026 is under one hundredth of a cent, ranking it among the most cost-efficient blockchains. That said, fees may rise during periods of network congestion.

Worth being straight about what that cheapness reflects. Algorand collected $153,380 in total network fees across 2025 and $23,153 over the first half of 2026. Fees this low are partly a design choice and partly a demand problem: there is very little competition for Algorand's blockspace.

Sustainable: Algorand claims to be more environmentally friendly than other PoS networks thanks to the lottery system it uses to select validators and the fact that they don’t have to compete to process transactions.

Protocol mechanism

PoS requires participants known as validators to deposit or ‘stake’ a certain amount of the blockchain’s native token for the right to process transactions. In return for this service, they receive block rewards in the form of freshly minted tokens.  

The minimum stake to become a validator in Algorand’s pure PoS is 30K ALGO, worth roughly $2,480 as of 30 June 2026. For context, Ethereum’s validators must stake 32 ETH, roughly $50,200 on the same date. However, even if you just hold one ALGO, you can participate by joining a staking pool. Staking pools combine your funds with others who can’t afford the minimum stake and run a validator on your behalf, sharing a portion of the block rewards.

You remain in control of your stake at all times, so you can use your tokens elsewhere, for instance to earn a return on a decentralised finance (DeFi) application. Another unique feature of pure PoS is it doesn’t penalise validators who underperform or behave dishonestly. Instead, they’re simply removed from the network and forgo rewards.

Market performance

ALGO traded at $0,0828 on 30 June 2026, for a circulating market capitalisation of $740,1M across 8,93 billion tokens in circulation. The token fell 67,0% across 2025 and a further 31,2% over the first half of 2026. Against the all-time high market capitalisation of $13,40B set on 12 November 2021, ALGO has lost roughly 94% of its market value. Past performance is not a guide to future returns.

The chart is worth reading carefully, because the story it tells is not simply a bear market. Algorand's market value peaked in late 2021 and has fallen in every subsequent year, including years when the broader crypto market rose. That is the signature of an asset losing relative ground rather than one moving with the cycle.

History

Algorand was launched by Massachusetts Institute of Technology professor Silvio Micali in 2019. Micali has extensive experience in the world of cryptography, having invented several ground-breaking tools including zero-knowledge proofs (ZKP), which allow someone to verify something without revealing sensitive information (like proving you’re old enough to enter a club without having to show ID).

Key milestones

• February 2018: Algorand’s first investment round raised $4M.

• October 2018: It raised a further $62M.

• June 2019: The Algorand Foundation launched the Global University Program to advance blockchain research.

• December 2021: Algorand Community Governance launched, allowing ALGO holders to vote on network upgrades.

• March 2022: Algorand’s smart contracts (programmes that automatically execute when preconditions are met, a bit like a vending machine) became composable, meaning they can interact with each other, enabling more complex use cases. 

• June 2023: A network upgrade increased Algorand’s maximum TPS to 10K and decreased the block time (the average time it takes to produce a new block of transactions) to 3.3 seconds.

• January 2024: The block time dropped below three seconds.

• February 2024: TVL peaked at $319,1M, its highest level on record, driven largely by activity on DeFi platform Folks Finance.

• January 2025: After the latest upgrade, block rewards went live on the network to boost security and decentralisation (replacing governance rewards).  

• July 2025: The xGov Council launched, an elected group of Algorand experts responsible for evaluating and funding projects proposed by the community.

Algorand was also the first non-EVM blockchain to be chosen by Midas to issue its tokenised US Treasury certificate, mTBILL.

CoinShares’ analysis

Algorand’s scalability is its greatest strength, and the roadmap outlined above is designed to address its biggest challenge- real-world adoption. Tokenised RWAs could prove to be a particularly lucrative use case.

Strengths

• The number of transactions Algorand can handle, its quick finality and low fees make it a highly scalable network.

• Silvio Micali, Algorand’s founder, has strong credentials in the crypto sphere and a reputation for innovation, which should bode well for the network’s evolution.

• The network has operated without significant disruption since 2019, and the January 2025 move from governance rewards to block rewards aligned incentives with securing the chain rather than with voting participation.

Weaknesses

• Algorand has experienced relatively low adoption in terms of TVL ($31,0M as of 30 June 2026, down from $47,2M at the end of 2025 and $137,3M at the end of 2024). 

• Daily active users averaged 67,868 across 2025 but only 15,562 over the first half of 2026, and stood at 12,760 on 30 June 2026.1 The 2025 average was inflated by one-off activity, notably TravelX issuing plane tickets as NFTs. Once that stopped, usage settled into the low tens of thousands.

Opportunities

• The focus on tokenisation of RWAs, primarily investments like shares and bonds to date, should drive adoption by financial institutions such as asset managers. The mTBILL listing and $147,1M of stablecoin supply on the chain are the early evidence that this channel exists.

Threats

• Algorand faces competition from rival blockchains offering high scalability and low fees like Solana, and it may struggle to stand out from the crowd.

• Lack of network effects due to slow adoption could impede Algorand’s growth.