Kingsley Alo
According to market data, institutional investment products based in Algorand had record-breaking $20 million inflows last week. This surge in funds into the DeFi-focused protocol likely came about due to a slew of new products launched and new partnerships, including one with the Nigerian Government to create a state wallet and an IP marketplace powered by the blockchain.
Crypto Inflows Surpasses Half a Billion Dollars
Interestingly, despite dwindling prices, the record-breaking inflow into the Algorand blockchain coincides with a good week for crypto. About $86 million flowed into various digital investment products, pushing the year-to-date value of investments to $0.52 billion. However, the recorded value is less compared to last year’s data.
Although not significant, last week’s inflow is on-brand with what has happened in 2021. As seen in the chart, 2021 has had wild swings in inflows within the ecosystem, moving from positive one week to massive outflows the next. This oscillation is unlike the later part of 2021, which saw net positive inflows.
The weekly crypto-asset flows data has somewhat mirrored the general market condition giving investors a general idea of prevailing sentiments. The $1.4 billion recorded in 2021 coincides with the Bitcoin surging to its all-time high price of $69,000. Since then, the general market downturn has been represented by low inflows and a significant sell-off of crypto assets.
Consequently, Bitcoin saw inflows of $69 million last week, raising the year-to-date total to $369 million. Nonetheless, its total asset under management is still lower than in July 2021 due to the market’s weakness.
On the other hand, Ethereum continued its downward trend, with outflows totaling $11.6 million. This brings the year-to-date net outflows to US$250 million, in sharp contrast to most other cryptocurrencies like Algorand. Other altcoins like Solana and Tron saw positive inflows with $1.8 billion and $0.4 billion, respectively.
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Nigerian Government to Launch National Wallet and IP Marketplace On Algorand
Algorand’s recent launches and partnerships have been the bedrock for the record-breaking inflow it saw last week. One of its current partnerships will see the Nigerian government develop a nationwide wallet and IP marketplace.
Reports suggest that the Nigerian government has signed a three-year exclusive IPR (intellectual property rights) agreement with Developing Africa Group. The deal allows the regional software development company to develop and launch a national wallet. This will allow for the international commercialization of all IP forms created and registered in the country, both locally and internationally.
Contextually, the Developing Africa group would be solely responsible for building the country’s official platform. This will allow citizens to upload any form of IP rights and trade or exchange them while collecting royalties and proceeds in their wallets. The agreement covers IP rights like trademarks, patents, and copyrights for content like songs, lyrics, videos, shows, lectures, podcasts, and streamable content.
Consequently, Koibanx, a smart contract, and blockchain technology company, has been chosen as the tokenization and payments engine for the project. Koibanx will develop the wallet, the token for the on-sale IP, and a stable token with the same value as the Naira. Additionally, it will be in charge of integrating the system with various vendors to be announced before the product launch.
The entire platform would be developed and run on the Algorand blockchain, employing an eco-friendly proof-of-stake consensus mechanism. Recently the ecosystem also signed an agreement with FIFA to provide blockchain wallet solutions for football’s governing body. Ben Oguntala, the CEO of Developing Africa Group, lauded the ecosystem. He said,
“Algorand’s protocol not only provides the performance, scalability, security and functionality required to implement such a large scale project but is also environment-friendly, which is important for the Government and has a huge philosophical match with the `creators economy industry´ we’re targeting here.”
Algorand’s public open-source blockchain architecture was founded by Turing Award-winning cryptographer Silvio Micali. It enables interoperability and can manage the volume of transactions required for DeFi, financial institutions, and governments to move towards FutureFi successfully. Algorand is the platform of choice for over 700 global enterprises, making it simple to create next-generation financial products, protocols, and value exchanges.
Meanwhile, the new initiative, which is set to launch before January 2023, proves Nigeria to be a leading force within crypto globally. Last year, it became the first African country and third globally to establish a Central Bank Digital Currency(CBDC). Despite this, the government has still restricted local banks from carrying out crypto transactions amidst suggestions of agents planted on several platforms to trick citizens.
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