Algorand (ALGO), a new permissionless, pure proof-of-stake blockchain project led by Turing Award winner Silvio Micali, has suffered from a significant sell-off since the cryptocurrency was listed on several major exchanges in June.
In an effort to boost price performance and stem the bleeding, the Algorand Foundation recently announced an optional opportunity for auction investors to sell back their ALGO above the current market price.
The Algorand Foundation launches buy back of up to 25 million Algos. Check out more details on the early redemption opportunity: https://t.co/WoeWsqnmOB
— Algorand Foundation (@AlgoFoundation) August 2, 2019
According to the announcement, the Algorand Foundation is looking to repurchase up to 25 million of the original auction (the full auction supply). Auction participants can resell their tokens for 85% of the original purchase price of $2.40 in USD, BTC or ETH.
“In response to feedback from the market, the foundation is seeking to strengthen the long-term viability and fairness within the Algo market for remaining participants who are taking a longer-term view and who wish to contribute to building out the Algorand platform,” states the Algorand team in the announcement.
The Foundation had previously guaranteed a 90% refund in 2020 for unsatisfied auction participants, segregating 90% of auction proceeds for the purpose. Accepting the latest refund offer precludes early investors from accepting the 90% refund in future.
It’s clear that Algorand underestimated the momentum of the secondary market sell-off, as investors looked to unload their cryptocurrencies amid weakening altcoin prices. However, the result of this announcement has sent ALGO’s price up over 50% in the last few days as early investors likely realize the best course of action is to take the refund and use the proceeds to repurchase ALGO on the open market at a lower price.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.