New Staking Reward Program Introduced by Algorand for Validators
Following the upgrade of its consensus mechanism, the Algorand Foundation has revealed a fresh reward initiative. This program ensures that validators receive block rewards instantaneously after successfully suggesting blocks for the Layer 1 blockchain. In this framework, rewards will commence at 10 ALGO per block and gradually reduce by 1% for every millionth block.
Moreover, validators will be entitled to 50% of the transactions fees from the blocks they effectively put forward.
Previously, Algorand’s reward system operated on a passive rewards allocation model linked to its pure proof of stake consensus mechanism.
This system did not issue real-time rewards but instead distributed them progressively in alignment with a diminishing inflation timetable.
Significance of the Staking Reward Initiative
What sets this new staking program apart in the industry is that, unlike staking on Solana, Ethereum, and similar networks, participants are shielded from slashing while not being subject to restrictive token lockups.
As a result, Node Runners can access their funds unrestrictedly. Most notably, it is non-inflationary, implying that rewards will not influence the total supply of ALGO or negatively impact the altcoin’s value.
Implications for ALGO
This development has notably bolstered the price performance of ALGO.
Currently, ALGO is trading at $0.42, reflecting a 6.02% surge in the past 24 hours alone. These gains have been incited by an overall bullish sentiment prevailing among market participants.
Evidently, the shift in market sentiment is apparent from Algorand’s consistently positive weighted sentiment for the prior 3 days.
This data indicates that a greater number of investors view the altcoin favorably compared to those with negative opinions.
Furthermore, the surge in bullish sentiments is more pronounced among whales, with whale activity having escalated by 60% in the last 24 hours.
This upward trend has been persistent, as evidenced by large transactions rising from 85 to 168.
Algorand is currently witnessing robust demand for long positions. According to Coinalyze, long positions dominate the market at 72%, with shorts accounting for 27%. With a ratio of 2.66, it indicates that the majority of investors are optimistic and anticipate price appreciation.
To sum up, with Algorand rolling out a new reward system for validators, the blockchain is primed for further expansion and progress. Typically, enhanced favorability towards the blockchain translates to improved performance for the altcoin.
Consequently, the existing positive sentiment surrounding ALGO positions it for further growth. Maintaining this positive sentiment could drive ALGO to reclaim $0.47. However, a retracement might see the altcoin settling around $0.38.