Disclaimer: Algorand Cayman SEZC , a Cayman Islands subsidiary of Algorand, Inc., is the sole owner of all tokens held by any of Algorand,  Inc. or its subsidiaries. References to “Algorand” in this transparency report refer to Algorand Cayman SEZC, and all transactions described in this report that use the Algo are made by Algorand SEZC with non-US counter parties.

Algorand is committed to providing full transparency into our actions and token holdings. As previously outlined, we will be providing transparency reports on a quarterly basis. This report covers the period from November 7th, 2019 through January 9, 2020. Previous reports and our wallet addresses with our token holdings can be found here.

As of January 9th, Algorand beneficially owns 2.016B Algos (up from 2B at launch). Of those, 1.792B are held in the wallets we have publicly shared, and for the remaining 224M Algorand maintains legal ownership but not physical custody (as described below).

As of the publishing of this report, Algorand has not sold any Algos on the secondary market. The company plans to sell a limited amount of tokens in 2020 with the goal of funding development initiatives; sales will be conducted via a structured program as outlined below. For calendar year 2020, Algorand commits to selling only rewards earned for supporting the network, and may sell fewer or no Algos at all.

Use of tokens 

To date, there have been two primary uses of tokens held by Algorand: 1) incentives to build and contribute to the growth of the Algorand platform, and 2) development and growth of the financial ecosystem.

Incentives to contributors and application developers through token grants, competitions, and investments.  

Total Algos: 155M (up from 111.2M at last report)

1. Initial Investment in Algo Capital: 100M tokens were contributed to Algo Capital at launch. Algo Capital is a fund that is unrelated organizationally to Algorand Inc. or its subsidiaries. These tokens are permanently held and remain locked by the fund while the value accrues to all fund participants. Confirmation of their holdings and their corresponding transparency statement can be found here.
2. Equity Investments: Approximately 52M Algos have been used to date to invest in ecosystem partners.
3. Market Development: Approximately 2.2M Algos have been used to date to build global awareness and promote Algorand through both technical and marketing partnerships.
4. Application Development: Approximately 570K Algos have been used to date to pay developers, vendors, and contractors for applications and services benefiting all members of the Algorand ecosystem including wallets, custody solutions, etc.

Development of the financial ecosystem by encouraging growth and liquidity through support of partner solutions including lending, staking, and market making.  

Total Algos: 135M (up from 71M at last report)

1. Lending: To date, approximately 116M Algos have been loaned and are held as collateral with 3rd parties to assist in the creation of lending markets. These tokens will be returned to Algorand.
2. Market Making: To date, approximately 18.7M tokens have been loaned to various market makers to support exchange liquidity and create orderly markets. The Algo is currently traded on 29 exchanges across over 63 trading pairs at those exchanges. These tokens will be returned to Algorand at the completion of their respective engagements.
3. Miscellaneous: Approximately 80K Algos have been used to date for other purposes including product testing, payment of transaction fees, etc.

All other token movements represent internal transfers between wallets for rebalancing to ensure that participation remains below a 49% threshold at all times. Our commitment to this threshold and our focus on responsible decentralization is described in more detail here.

2020 Token Sales

Algorand is planning to sell tokens periodically in 2020 to fund development initiatives. Any sales will follow the guidelines below which have been designed to limit market impact. 

For any Algos sold by Algorand:

• Any tokens scheduled to be sold will be sold via one or more approved 3rd parties, who will execute trades at their sole discretion within the guidelines specified here.
• Algorand will be a Market Maker (never a taker of bids) and will offer its tokens only in the ask of the order book.
• Algorand will not represent more than 5% of the total market volume in any given period.
• The 3rd party structured seller has imposed an automatic rule that if the secondary market pricing (as reported on Messari.io) declines by more than 10% in any 24-hour period, selling will automatically stop and resume after 24 hours has passed where the observed price has been stable or increased.

For calendar year 2020, Algorand commits to sell no more than the rewards earned for supporting the network on the secondary market, and may sell fewer or no Algo. Details on any tokens sold will be included in future transparency statements. As of the publishing of this report, Algorand has not sold any Algos.