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For the past several days, Algorand, an apparently lesser-known cryptocurrency, has been raging as the blockchain seeks to fight with the monarch of DeFi blockchain, Ethereum. Its token ALGO has made significant gains in the midst of a smart contract war with Ethereum and Cardano.
However, it appears that this new invention may propel it to the top.
Algorand and the gains this week
This altcoin has increased by 101 percent in the last week. It increased by roughly 50% in a single day on September 8. This increased the coin’s value from $1.1 to $2.1 in just 7 days.
A huge reason behind this jump was the partnership of El Salvador’s government with Koibanx. This partnership will enable Koibanx to build the government’s blockchain infrastructure on the Algorand network.
This news came even before Bitcoin became a legal tender in the country. Thus, it fueled the coin and investors as well. Signs of the same were visible on the volumes which went from an average of $180 million to a high of $2.79 billion.
At the same time, investors embarked on a buying spree, purchasing approximately 1.2 billion ALGO valued $2.58 billion within the same time period.
The coin has also done well in the derivatives market. Volumes have peaked at $3.28 billion, with open interest at an all-time high. In less than two days, the volume increased by 671 percent.
But how does it compete with Ethereum?
The blockchain is already a better network in terms of performance, thus it has the ability to compete.
Although the network’s AVM does not allow Ethereum dapps to run on the network, AVM in and of itself is faster and cheaper when it comes to developing smart contracts. And its newfound collaboration with El Salvador may bring it to the attention of developers.
On top of that Algorand foundation just announced a $300 million fund for supporting DeFi innovation. This fund will be used for the development of DEXs, NFT platforms, and much more.
However, investors looking to jump in, must remember that the coin has high volatility and can possibly fall as quickly as it rose.