Short $ALGO

According to CryptoPotato, proof-of-stake blockchain network Algorand is facing difficulties as on-chain metrics reveal that more than 80% of users holding its native token, ALGO, are in losses. Data from blockchain intelligence firm IntoTheBlock shows that Algorand is experiencing stress in its profitability, growth, and token metrics. A significant drop in developer activity has been observed in the past two weeks, and approximately 88% of ALGO holders are battling losses as the token records minimal gains. Out of 19.88 million addresses on the network, only 1.91 million, representing 9.62%, are in profit, while a staggering 17.58 million, accounting for 88.38%, are in loss. These figures contrast sharply with Bitcoin, which has over 90% of BTC holders in profit, and ether (ETH), which has more than 70% of its holding addresses in the green.

Last year, Algorand's largest decentralized finance (DeFi) protocol, Algofi, shut down its operations, citing a "confluence of events." The DeFi platform said it could no longer continue building and maintaining its business to the highest standards and decided to transition into withdrawal-only mode, closing its social media accounts except Discord. Algofi's dissolution affected Algorand's total value locked (TVL), which fell by more than 73% from its November 2022 peak of roughly $300 million to $58 million. At the time of writing, the network's TVL had recovered slightly and was sitting at $71.5 million, per data from DefiLlama. Despite these challenges, Algorand's usage and transaction volume continue to rise. The IntoTheBlock content creator stated that monitoring is needed to determine if longer-term prospects will dim, and fundamentals may outweigh recent gloom, but near-term hurdles appear for the ambitious blockchain. Time will tell if the solid technology and platform outweigh fickle indicator moves.