Today, Algorand unlocked 50 million of its ALGO tokens to distribute them to its staking rewards program participants. This 50 million ALGO, which is part of the 200 million ALGO reward program, however, won’t increase the total ALGO supply because “it comes from the pool that had been assigned to auctions, which are suspended for this quarter,” said Algorand Foundation.
Currently, ALGO is trading at $0.317, down 9.35% in the past 24 hours while managing the daily trading volume of nearly $10 million on top ten exchanges with real volume. The 36th largest cryptocurrency with a market cap of $186 million has almost $983 million liquid market cap.
The Sell-off is in “anticipation” of the 50 Million Token Release
The ongoing drop in ALGO price according to trader Nik Patel is in “anticipation” of the 50 million ALGO release today which he said is a “non-event.”
Being 9% of ALGOs circulating supply, it makes sense that people anticipated a selling pressure, however, if someone moves out even a single ALGO token out of their rewards or the previously staked ALGO, they would be disqualified from the super staking program.
This means the staking participants won’t get any more ALGOs from the remaining 150 million tokens that will be distributed over the course of the next three such releases.
“TLDR: Due to Disqualification clause, I highly doubt people would unlock their tokens for selling. So nothing changes much and those 50 MIL remain locked more or less,” Thomas commented on the sell-off concern in the Algorand Community Telegram.
As such the trader says “We probably print a swing-low this coming week and continue up through March.”
What’s up with the 200 Million ALGO Staking Reward Program?
The 200 million ALGO staking reward program by Algorand started last year and was a success. Algorand Foundation actually received an “overwhelming” response and was fully subscribed by its deadline last August.
As per its website, Algorand and the Algorand Foundation are not participating because they do not qualify for this program.
Under this program, participants need to complete their KYC to receive at least 1 ALGO in reward for every ALGO they stake. The staking reward is calculated by dividing the staking reward 50 million by the total number of ALGOS across all the qualifying wallets.
Those participants residing in the US, Canada, the People’s Republic of China, Democratic People’s Republic of Korea, Cuba, Iran, Syria, Sudan, and Republic of Crimea are unqualified for the staking rewards.