Algomint - Algorands Crypto Bridge
Last Reviewed: March 2022
In this Algorand article I'll educate you on Algomint - Algorands first interoperability platform. An absolutely critical part of the Algorand DeFi ecosystem.
Algomint is one of the three DeFi "pillars" defined by the the Algorand Foundations Aeneas Program, which goal is to bootstrap Algorand DeFi:
- Robust Bridges for Newcomers - Algomint
- Automated Market Maker DEXs for Traders & Merchants - Tinyman
- Borrowing & Lending Platform for Capital & Commerce - AlgoFi
I have already covered
Tinyman and
AlgoFi in previous posts. In this Algorand article you'll learn everything about the last piece of the puzzle for next generation blockchain DeFi - Algomint.
This AlgoDaddy Guide Covers The Following Topics:
- What is Algomint
- Algomint Token
- Algomint Incentive Program
- Why is Algomint Important
- Carbon Negative BTC
- How Does Algomint Work
What is Algomint?
Algomint was co-founded by Michael Cotton and AJ Milne, and was launched on the Algorand mainnet in November 2021. Algomint aims to bridge Algorand with other popular cryptocurrencies and crypto tokens.
At the moment the Algomint dApp allows for minting of BTC and ETH on Algorands protocol, with more assets planned for the future. BTC will be minted into goBTC, and ETH will be minted into goETH.
Additionally the founders have mentioned goUSD as a possible way of allowing different USD to be bridged together. Imagine how useful it would be if you could swap USDC to BUSD at a 1:1 rate across different blockchains. That's Algomints plan!
Algomint Token
Currently there is no Algomint token available. However, Algomint has reported to be planning tokenization in Q1 2022. Allegedly the Algomint native token will be known as goMINT, and it will be used for staking and in order to form insurance contracts for the underlying stored assets.
Algomint Incentive Program
As a part of the Aeneas Liquidity Program Algomint have released an incentive program to increase liquidity for the platform. A total of 1,000,000 ALGO is to be distributed between users who add BTC and ETH to the Algomint platform without burning their goBTC and goETH counterparts until the end of February 2022.
Why is Algomint Important?
You've probably already hear about Algorands protocol offering swift transactions, high security, and low cost of transactions. Well, it turns out Algorand can offer other cryptocurrencies these same benefits. With the help of Algomint other crypto assets can now be minted to Algorands blockchain. This means that your favorite cryptocurrencies suddenly can enjoy the same benefits as the Algorand and it's ASAs!
Picture yourself green BTC. Now imagine BTC also having a transaction cost of mere $0.001 ALGO, a transaction speed of 4.5. seconds, and instant transaction finality. Well, this is goBTC for you. As you can see the potential is immense.
In addition,
Algomint bolsters greater inflow of capital and equity into the Algorand network, which boosts the growth of the ecosystem.
Carbon Negative BTC
Algomint have committed to making the minting of BTC to goBTC on their platform carbon negative. Algomint will use
Nettle Zero in order to achieve this, which involves CO2 removal activities in Europe. At the point where Bitcoin then exists on the Algorand blockchain as goBTC it will be carbon neutral as a result of the Algorand protocol operability itself (Algorand is carbon negative).
How Does Algomint Work?
When you mint goBTC and goETH from their counterparts on Algomint you end up locking up the original BTC and ETH on a 1:1 basis at an Algomint selected custody partner. The goBTC or goETH will be burnt once you unlock the respective original asset.
Until March 2022 minting is free on Algomint. After that Algomint will take a 0.2% fee when you mint or burn. Moreover there is a mining fee to cover sweeping costs, which is 0.0025 ETH and 0.0001 BTC respectively. The maximum amount of tokens that can be minted to the Algorand blockchain per transaction is 1 BTC or 10 ETH.
If you want to try Algomint out, then head over to the Algomints Webpage and press "Launch App". From there you can now create an account, which you can then connect with your Algorand Wallet. Follow the instructions provided. Note that you can always try it out on the Testnet first.
Algomint requires KYC (Know Your Client), which means that users must identify themselves with ID-cards or such in order to use the platform. This is necessary in order to comply with money laundering laws.
Final Words
Being able to mint another cryptocurrency on Algorand is a fascinating and important concept. You can now hold other crypto and diversify your portfolio, but still enjoy the technical benefits of the Algorand protocol - avoiding high transaction fees and slow transfer times.
Furthermore Algomint helps pull capital into the Algorand ecosystem. This is one of the more important points in terms of further expansion of Algorand - Algomint really outdid themselves here.
At the horizon there's goUSD as well as goMINT, both which will unlock new possibilities for participants in the Algorand ecosystem.
If you enjoy learning more about Algorand and it's ecosystem, then why not check out my other
AlgoDaddy Guides I've written. It's a great way to learn more about the blockchain you're invested in. You can start from the basics and progress to more complex topics later on. I recently explained
How Algorand and Blockchains in General Work. I highly recommend that one if you want to get a good overview about cryptocurrency technology in general.
Anyways, that's all for this time. Algo and out!
AlgoDaddy
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