Exchange Ranking
Top Exchanges
24h Volume Ranking
Popularity Ranking
Exchange BTC Balance
Proof of Reserves
Decentralized Exchanges
Funding Rate
Funding Heatmap
Liquidation Data
Max Pain
Long/Short Ratio
Whale L/S Ratio
Binance/Okex/Huobi L/S
Bitfinex Margin L/S
ETF Tracker
Solana ETF
XRP ETF
Hong Kong ETF
Bitcoin Treasuries
Crypto Reversal
Ethereum Reserves
HyperLiquid Wallet Analysis
Hyperliquid Whale Watch
Large Transactions
On-chain Movement
Bitcoin ROI
Stablecoin Market Cap
Options Analysis
News
Articles
Economic Calendar
Features
Wallet
Contract Calculator
Security
Collections
Watchlist
Following
ALGO Most proof-of-stake blockchains require verifiers to lock in their tokens as collateral.
Algorand takes a different approach, with its native tokens never leaving the holder's wallet.
How the election process works
Unlike other methods of proof of interest, users do not need to pledge (i.e., lock) their tokens. On Algorand, users always control their Algo because the tokens remain in their wallets while ensuring network security as part of consensus.
The mechanism behind this is a cryptographic lottery run for each round of blocks. Each block elects a new block proposer and a new verification committee, both of which are randomly selected from all online users in a private and non-interactive manner, with probability based on user rights. Because member elections are non-interactive, attackers have no way of knowing which user to target until the user has completed their work. This privacy is a deliberately designed security feature: the use of verifiable random functions (VRF) prevents attackers from predicting the set of members selected for the next round of commit blocks.
As long as more than two-thirds of the absolute majority is held by honest participants, the network can tolerate malicious behavior and avoid fork and double flower attacks. Algorand does not rely on financial penalties to enforce good behavior, but uses advanced cryptography to ensure security and does not rely on economic disincentives to protect the network. Pledged ALGO will not be subject to forfeiture. Conversely, inefficient nodes are removed from the consensus by the algorithm and only rewards are lost.
Rewards, thresholds and options for small holders
The minimum threshold for receiving pledge rewards for participating accounts is 30,000 ALGO. This amount is determined through community governance voting for Governance Cycle 10 (GP10). This threshold encourages potential node operators to invest enough interests to propose blocks regularly, while avoiding the emergence of large numbers of small-interest nodes that could affect performance.
The reward for each block starts at 10 ALGO and decreases by 1% per million blocks. Verifiers also receive a 50% transaction fee for their successfully proposed blocks. For users with fewer tokens, there are several other ways to participate in consensus and receive rewards. Liquidity pledge services can be used through platforms such as Tinyman, Folks Finance and CompX, which provides a flexible alternative to traditional pledges. Liquidity pledge applications allow users to pledge Algo while maintaining liquidity. A typical process is for users to deposit Algo and mince new tokens representing the ownership and value of the pledged Algo, which can then be used in the DeFi ecosystem.
