Proof-of-stake blockchain Algorand now supports smart contracts.
The Algorand Foundation released an update to the blockchain’s protocol on Thursday, adding decentralized finance (DeFi) features plus the long-awaited smart contracts. “Algorand 2.0” is the largest expansion of the network’s capabilities since the network’s launch in June 2019.
“With this release, new features and simple developer resources enable new use cases and broader adoption of blockchain overall,” Algorand CEO Steve Kokinos said in a statement.
For months Algorand employees have been hinting at the pending development. It’s the first time Algorand has supported smart contracts, the code-driven contracts that can track and execute the terms of formal agreements over time.
Algorand’s ASC smart contracts have back-end differences from the smart contracts pioneered by blockchains like ethereum. That’s because Algorand’s new in-house programming language Transaction Execution Approval Language (TEAL), is non-Turing-complete.
Technically unique
Turing completeness is a measure of a programming language's ability to simulate another programming language and possibly manipulate its own programming instructions.
Nearly all modern programming languages are Turing-complete, but Algorand touts TEAL’s difference as a feature, not a bug. TEAL smart contracts are safer to write and execute, despite having more limited potential functionality, Algorand argues.
For example, ASC cannot support recursive logic, according to the developer page.
“We don’t believe that turing-complete is necessary for the majority of the use cases,” said Paul Riegle, head of product at Algorand. “It adds immense attack surface and a potentially steep performance impact.”
Simpler functionality could mean better security – or, at least, a more straightforward path to ensuring ASC contract coders do not inadvertently lose assets. It is easier and faster to check a smart contract code for errors when its programming language excludes recursive logic, according to Hacker Noon.
Other upgrades
The standard asset issuance (ASA) function brings widespread tokenization features to Algorand, and is also a baseline DeFi tool.
The foundation’s developer page said any asset can be digitized and stored on-chain with ASA.
Algorand also introduced batch transaction functionality with the Atomic Transfers feature released Thursday.
With the new tool, users can perform complex token transfers – such as circular trades and internal account settlements – in one transaction, the developer page said.
The foundation said that Algorand 2.0 does not impact Algorand’s sharia compliance certification, with other key features remaining unchanged.
Algorand has a market capitalization of $108 million, according to Nomics, and ranks as the 48th-largest blockchain, according to CoinMarketCap.