The price of Algorand (ALGO) has rocketed after it announced a $330 million decentralised finance (DeFi) fund.
According to data, since bottoming out at $0.67 on July 20, the price of ALGO has jumped 268% to a daily high at $2.47 on September 9 as its 24-hour trading volume hit a record-high of $4.83 billion.
This immediate rise in price and volume for Algorand came after El Salvador announced that Bitcoin was now recognised as legal tender. El Salvador selected Algorand’s blockchain to help develop its own blockchain infrastructure.
The network has also been chosen to host stablecoins like USD Coin (USDC) and Tether (USDT).
Algorand’s selection by El Salvador is probably the most important sign of belief the project has received to date. This could lead to further adoption by more conservative financial institutions as governments and banks from other countries are scrutinising the whole project and monitoring its development.
NFTs, DeFi and governance to lure new users
Another booster to ALGO’s value is the recent move made by the Algorand Foundation to get the community more involved with the project and active on the network.
According to an official announcement, the Algorand Foundation revealed it partnered with the Viridis DeFi Program – a 150 million Algo (worth approximately $330 million at the time of writing) fund – to support DeFi innovation on the Algorand network.
The fund will fuel the growth of decentralised exchanges, money markets, options markets, synthetic asset applications, and NFT platforms.
“The Algorand Foundation is excited to launch this funding program to help accelerate the adoption of DeFi across the Algorand Ecosystem,” said Sean Lee, CEO of the Algorand Foundation.
“Creating the right infrastructure, application ecosystem and liquidity will be key to ensuring that DeFi on Algorand is regarded as the world’s most energy-efficient, scalable and low cost DeFi ecosystem.”
Fifty million ALGO, which has been re-allocated from the AlgoGrant fund, will exclusively support the development of DeFi infrastructure and applications ( dApps ).
Within this, DeFi ‘SupaGrants’ have been designed to support the creation of critical DeFi infrastructure such as cross-chain bridges and price oracles.
The first $5 million SupaGrant will be a call for proposals to build bi-directional bridges from Ethereum and other chains. Once ported to Algorand, dApps need access to market data to manage a variety of smart contract functions.
The second $5 million SupaGrant will seek proposals for the integration of oracle networks with associated price feeds. The balance of this fund will support further application development across this burgeoning DeFi ecosystem.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.