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Algorand’s Layer 1 Protocol Needs Improvement: A Look at 16.4 Million Addresses in Loss State

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Algorand’s Layer 1 Protocol Needs Improvement: A Look at 16.4 Million Addresses in Loss State

According to reports, according to data from the encryption analysis platform IntoTheBlock, the Layer 1 Proof of Rights Protocol Algorand (ALGO) currently has more than 16.4 million addresses in a loss state, accounting for more than 98% of the total registered addresses on the Algorand chain, and its performance also lags behind peers such as Ethereum, Cardano, Solana, and Avalanche. （u.today）

Data: More than 98% of Algorand’s addresses are in a loss state

Analysis based on this information:


According to reports, Algorand’s Layer 1 Proof of Rights (PoR) protocol is currently experiencing significant issues, serving as a major obstacle to the blockchain’s growth and adoption. Data from the encryption analysis platform IntoTheBlock shows that Algorand has more than 16.4 million addresses in a loss state, accounting for more than 98% of the total registered addresses on the Algorand chain. This alarming figure is almost twice that of Ethereum’s, a cryptocurrency that currently accounts for 60.7 million addresses.

The layer 1 protocol is a fundamental element of blockchain technology and is often referred to as the base layer or the underlying infrastructure of blockchain. It plays an integral role in facilitating transactions, validating blocks, and maintaining the system’s overall security. Therefore, a blockchain’s layer 1 protocol requires high speed, scalability, and security.

Algorand’s PoR protocol is lagging behind its peers, including Ethereum, Cardano, Solana, and Avalanche. These competitors have built the next generation blockchain technology protocols with significant improvements over their layer 1 protocols. Ethereum, for example, its layer 1 protocol, Ethereum 2.0, has more than 200,000 active validators who earn Ethereum by participating in the network. Cardano’s layer 1, Ouroboros, has been hailed as a quantum-resistant protocol, making it more secure than others. Solana’s layer 1 protocol can process up to 100k transactions per second, making it an attractive option for dApps and other blockchain-based services.

Algorand must improve its layer 1 protocol to ensure that it meets its performance goals and ultimately attracts users and developers. Currently, its excessively low transaction speeds and high fees have pushed users away from using the platform. The high number of addresses in the loss state means that users aren’t willing to use this blockchain. The platform must address this issue and scale the network to meet market demand.

To start, Algorand must prioritize speed and scalability, which can be achieved by optimizing the Layer 1 protocol. The company must balance security with speed and reliability to deliver a blockchain that can handle thousands of transactions in real-time. By doing so, Algorand will be well-positioned to compete with rivals and attract more users and developers to the platform.

In conclusion, Algorand’s layer 1 protocol is the backbone of the blockchain, and it must be improved to attract more users and compete with its rivals. The platform must prioritize scalability, security, and performance to optimize the protocol and create a network that can handle market demand. Failure to address these issues will lead to a halt in the growth of the Algorand blockchain.

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