Algorand Makes Major Protocol Upgrade
Algorand, the Layer 1 blockchain created by MIT professor Silvio Micali released a major protocol upgrade today, hoping to capitalize on the growing adoption of smart contract chains not named Ethereum. The Boston-based blockchain has released its virtual machine, the Algorand Virtual Machine (AVM) and it is live on mainnet, fully shipped. For the uninitiated, a virtual machine is necessary to unleash the development of dApps powered by smart contracts.
Major Protocol Update! Algorand Virtual Machine upgrade catalyzes wave of #DeFi applications building on #algorand #avm #GreenBlockchain https://t.co/Q4YV1VX2Pa pic.twitter.com/XBlSUcYshO
— Algorand (@Algorand) September 29, 2021
Take Ethereum’s virtual machine, (EVM). “The EVM is essential to the Ethereum Protocol and is instrumental to the consensus engine of the Ethereum system. It allows anyone to execute code in a trustless ecosystem in which the outcome of an execution can be guaranteed and is fully deterministic (i.e.) executing smart contracts.”
Many blockchains seek to be ‘EVM compatible’: With EVM compatibility, developers “can build the same way that they would do on Ethereum, and benefit from the same tools and applications”. This means that dApps can be ported over to another chain seamlessly, and this is what Avalanche is trying to do, getting Aave and Curve to come over.
However, Algorand is building its own virtual machine that is wholly separate and not EVM compatible. This is because they use their own smart contract language called Clarity, rather than Ethereum’s solidity. They are building from the ground up, rather than hoping to ride on Ethereum’s coattails, which is what many chains seek to do.
Suggested Read: WHAT ARE SMART CONTRACTS?
According to the announcement, the AVM will “provide robust tools for developers and organizations looking to build applications of the future on fast, scalable, low cost and stable infrastructure.”
George Cotsikis, founder of VenueOne, a decentralized prediction market building on Algorand said this of the upgrade: “The new features allow liquidity providers to algorithmically manage their risks in a highly granular way. People who are new to Algorand are going to find a lot of very powerful features that they wouldn’t expect.”
This is a significant step enabling even more powerful and efficient applications to be built using the power of the @algorand blockchain. And if you build on Algorand, you are building with scale and sustainability at the core of your development. #GreenCrypto https://t.co/H5F8gdwB4H
— Stephen Duignan (@stephenduignan) September 29, 2021
This upgrade, as mentioned above, increases the in-depth functionality of smart contracts, and enables scale on Algorand at “an entirely new level”. AVM will allow developers to write their smart contracts in a simple programming language “similar to javascript.” It also “includes new features that developers can tap for a variety of use cases beyond DeFi.”
Chief Product Officer of Algorand, Paul Riegel said that the upgrade will improve on the “complex mathematical nature of DeFi”, including the “authentication procedures protecting cross-chain mechanisms, or bridges.” Bridges have become highly used in the last few months, with again, Avalanche taking advantage of their bridging tech. This of course means bridging assets from other chains.
The computing power will also increase, in terms of how much computing power Algorand smart contracts can call. With the AVM, the computing power for these smart contracts will increase by a factor of 16. the AVM will spur the development of dApps on Algorand massively as the AVM basically is the final piece of the puzzle to create a cohesive development ecosystem.
Algorand is still far behind other chains in terms of TVL like Solana, Ethereum, and even Tron, however, Alogrand has been developing quietly behind the scenes, and rather than the “move fast and break things” approach, they have clearly taken a far more long-term, sustainable approach.
Investors agree: Algorand has the largest war chest in the entire crypto space, with over $1 billion at their disposal as big names like Anthony Scaramucci and Michael Arrington have dumped in nearly half a billion dollars to build out the network. The new AVM makes that goal more plausible than ever.
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