November 4, 2020
Who is in, who is out?
Members of the FCAS 25 are reevaluated each month and must be ranked within the top 25 for at least 40 days to qualify. Today, a new set of members was released with Algorand (ALGO) and Compound (COMP) joining the top echelon.
Overall industry health can be assessed by taking the average FCAS of the 25 top projects. This Overall Industry Health metric works as a good proxy for how the industry is doing as a whole. The score is the same as it was in October.
How Compound Climbed the Ranks
Compound is a DeFi protocol that lets users borrow certain ERC-20 tokens by depositing another token as collateral. At the same time they earn interest for supplying liquidity.
Compound was the one to start the whole “yield farming” craze back in June 2020. It presented a new mechanism for luring assets into liquidity pools by giving out governance tokens that offer greater returns on investments. Within a few days of launching $COMP as a new reward (6 days to be exact), the governance token reached its zenith at $372.
The fact that $COMP has now gone down in price ($86 at the time of writing) is a misleading indicator because it is tied to governance, not utility. Compound itself is still a key underpinning and entry point for yield farming strategies. The ability for users to stake and borrow and leverage up their liquidity is not going away anytime soon.
Algorand Standard Assets are Key
Algorand Standard Assets (ASAs) are Algorand’s form of ERC-20 tokens – i.e. anyone can create any type of asset – currencies, stablecoins, tickets, securities, etc. – to be represented on the Algorand blockchain. Although the feature itself launched back in November 2019, recent use cases have really started gaining traction.
Noteworthy was Props Project moving over from a Hyperledger private sidechain to Algorand’s public blockchain. Props’s network of independent apps uses Props Token as a reward mechanism, thereby giving users a stake in the system. Users who hold these Props Token then get in-app benefits. This allowed for projects like PlanetWatch to use the Algorand blockchain to collect data on air pollution through sensors they set up in various cities.
Algorand’s ASA capability also means major stablecoins such as Tether and USDC can both be transacted on the Algorand blockchain. Stablecoins want to be available on major blockchains people use, so the fact that they both jumped on the opportunity is a testament to Algorand’s rising prominence in the space.