Is Algorand inflation its biggest enemy?

Oct 17, 2023

This is an interesting discussion. Algorand, unlike most PoS blockchains, has a max supply limit of 10 B, whereas many others have an infinite one. In order to have a functional and secure blockchain, validators must be rewarded and this can be achieved through a transaction fee or the issuance of tokens.

I personally do not consider information reliable if it is not supported by facts and evidence. If you think my statements or those of Kraken are wrong, you need to provide evidence, not words.

Please read carefully. I wrote that your reasoning is generic and that it is valid for every blockchain, not that every blockchain works like Algorand. According to the official documentation of Algorand, according to my calculations and those of Kraken, it works as explained above. Furthermore, @Fabrice

Your points are basically correct, but they are general in nature and valid for any blockchain. According to the documents I have read, although about 380-400 validators participate on Algorand on average in a week, those who hold 33% of the stake and thus get on average 33% of the committee seats are crucial for its functionality.

Okay, you were referring to the three stages. According to what is written here, the committee members for each phase are always drawn from the same set of validators with the same stake.

According to what is written in the articles I have read, including those linked by you, and according to what is written in this thread, the sortition algorithm and the choice of validators works as reported above. What are these sets? I don’t remember finding them anywhere.

According to @Fabrice: Yes, the distribution of seats on committee is, on average, the same as the distribution of online stake. So the validators are on average the same.

Well, this means that the average validators participating in the consensus are only 25-16, so Nakamoto’s coefficient is not around 400, but close to 20-30, comparable to other blockchains, but not as good as I thought.

If the number of validators who participated is around 400 and the number of seats per round is 1400, this means that on average some validators have more than 3.5 seats. What is the distribution of seats among the validators?

How many maximum? So a few nodes could get the majority of the committee stake? Could you bring me back an article with updated parameters?

Thanks for the link. I have now resolved some doubts. According to the paper linked by sortition algorithm page, the committee size is between 2000 and 10000 (final). This number should be the one shown in the dashboard, about 1400 participation nodes of which about 400 actually voted in the last week.

Where does the 80% stake come from? The handling of the relay list should not be manual, but managed by an algorithm based on the reputation of the relays (e.g. past behaviour, SLA, operational efficiency, etc.).

Thank you for the links. However, the second one is broken. The first video describes how the algorithm works and it is a good explanation, but it leaves two open questions: how X is calculated for the inequality vrf_output<X? And how is p selected in the Bernoulli distribution?

Thank you for your answers. So the consensus of the Algorand validators (participation nodes) is decentralized and 1/3 of the participants (currently about 136 nodes) are required to block the production of blocks.

Hi, I appreciate your attempts to answer, but if you are not an expert in the subject, it is better not to answer at all.

I found this unofficial explorer where you can see the top accounts and select which of them participate in the consensus. Taking the top 1000: if we consider both online and offline we have a total stake of about 6.614 G algo and 33% of the stake is owned by the top 26 top accounts.

Hi, according to the official FAQ and according to this comprehensive analysis A Survey of Distributed Consensus Protocols for Blockchain Networks, the consensus algorithm of Algorand tolerate up to 1/3 of malicious validators. If the number increases, the network’s consensus is blocked.

Hello, I’m continuing up here as my question fits into the discussion. I’m pondering on Algorand’s pure PoS consensus algorithm which requires 2/3 of the validator nodes in the network to be honest in order to validate transactions.

What do you mean by synchronous or asynchronous in this context? Layer 1 smart contracts are executed with the transaction the same way it is done on Ethereum. I guess you can call them synchronous.

Thank you for your reply. So this data is still not true? If not, is there any ETA?

Hi, I am studying Algorand and I have a few questions: What is the current and maximum throughput? Does it have a synchronous or asynchronous smart contracts model? Is there any support of cross-chain interactions (not bridge, something like IBC or XCM).

Hi, I read that in Algorand everyone can be a node/validator and there are no staking pools. According to the official metric there are 2251 nodes and 370 unique accounts participating in the consensus protocol. What is the maximum number of nodes? Is 370 the actual number of nodes validating the consensus?