The Algorand Foundation, the primary group behind Layer-1 blockchain Algorand, announced the launch of Viridis, a $300 Million DeFi fund that will focus on accelerating, funding, and supporting DeFi innovation on Algorand.
The Algorand Foundation will use the fund to help accelerate the growth of money markets, decentralized exchanges, options markets, NFT platforms, and synthetic asset applications, all of which run on the Algorand blockchain.
Sean Lee, the CEO of the Algorand Foundation, commented,
“The Algorand Foundation is excited to launch this funding program to help accelerate the adoption of DeFi across the Algorand Ecosystem. Creating the right infrastructure, application ecosystem, and liquidity will be key to ensuring that DeFi on Algorand is regarded as the world’s most energy-efficient, scalable, and low-cost DeFi ecosystem.”
The Viridis Fund
Under the Viridis fund, Algorand has allocated 150 Million ALGO tokens, which are valued at $300 Million, which will help to finance the creation and development of a DeFi ecosystem such as infrastructure and decentralized applications (dApps) on the Algorand network.
The Algorand Foundation has also announced two SupaGrants, with each SupaGrant receiving $5 million. The first grant will be utilized in building bi-directional bridges from Ethereum and other chains. In contrast, the second grant will look at proposals for integrating oracle networks with their associated price feeds.
Breaking Up The Fund Allocation
Out of the total 150 Million ALGO, 50 Million ALGO reallocated from the AlgoGrant fund will be used to support the creation and development of DeFi infrastructure and DeFi applications. It is within this grant that Algorand has announced the two SupaGrants. The balance from this fund will be utilized towards further application development in the DeFi ecosystem.
100 Million ALGO will be utilized towards providing liquidity incentives towards the Algorand DeFi ecosystem. This will ensure that DeFi projects on Algorand will be able to access liquidity while also providing liquidity providers on Algorand incentive to fuel DeFi on Algorand. Several projects have already engaged with the Algorand Foundation, ensuring that they will have the required liquidity at launch.
Algorand is engaged in an ongoing race with other Layer-1 blockchains that are looking to acquire new DeFi users. Competitors such as Harmony and Fantom have also created ecosystem funds to attract developers to their network.
Laying The Foundations For A DeFi Ecosystem
Algorand currently hosts DeFi projects such as Hummingbot, IDEX, Opulous, Yieldly, and Securitize. However, liquidity and activity in Algorand’s ecosystem are low compared to other Layer-1 competitors. Algorand hopes that the addition of bridges and oracles can lay the foundation of a flourishing DeFi ecosystem.
Algorand hopes that the $300 Million grant can appeal to developers and development teams to build dApps and help the DeFi ecosystem on Algorand grow. Algorand has also seen a significant rise in recent weeks, with the value of the ALGO token having risen by more than 120% during the previous month.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.