Algorand Foundation Declares $35M Exposure in Hodlnaut, ALGO Token Up Slightly
- Earlier this year, Algorand became the official blockchain platform of FIFA.
- Algorand has announced that it does not expect to have liquidity issues arising due to the case.
- Hodlnaut ceased operations to its customers earlier in August and is currently under Singapore’s Judiciary management.
Algorand Foundation, a nonprofit body that supports the Algorand blockchain, has announced that it has $35 million in USDC exposure to the troubled Singapore-based Hodlnaut. Reportedly, the $35 million held by Hodlnaut represents less than 3 percent of the Foundation’s assets. Thereby making it less impactful on the overall Algorand ecosystem.
According to our data, the Algorand ecosystem has a market capitalization of approximately $2.2 billion. With its native token ALGO trading at $0.32, up approximately 1 percent on Monday. Notably, the token is down approximately 83 percent from its peak value recorded last year.
Algorand and Hodlnaut at a Close Range
The Algorand Foundation has been developed to host decentralized financial applications at scale and affordable prices. Earlier this year, Algorand became the official blockchain platform of FIFA. Thereby attracting football fanatics to the blockchain network through global exposure.
Furthermore, the Algorand network announced that it will be a FIFA World Cup Qatar 2022 regional supporter in North America and Europe, and a FIFA Women’s World Cup Australia and New Zealand 2023 Official Sponsor.
The Algorand Foundation is highly diversified in cryptocurrency and blockchain investment. As a result, the company has been able to withstand the cryptocurrency market shrinking for the past year. Having secured its day-to-day funds, Algorand has invested the extra money to earn interest from other crypto projects.
As for the case with Hodlnaut, Algorand has announced that it does not expect to have liquidity issues arising due to the case. Hodlnaut ceased operations to its customers earlier in August and is currently under Singapore’s Judiciary management.
Algorand had deposited its $35 million in USDC with Hodlnaut’s locked services. All the funds became unavailable for withdrawal after Singapore’s lending protocol announced liquidity issues caused by Terra Luna’s collapse.
Currently, Hodlnaut is under Interim Judicial Management to avoid forced liquidation of assets. Meanwhile, Algorand previously announced that it is represented by Ms. Angela Ee and Mr. Aaron Loh of EY Corporate Advisors in the Interim Judicial Management.
According to Hodlnaut’s official website, the company has around $250 million in held assets from the seven supported digital assets. The company reports over 10k users.
Notably, Hodlnaut gave users an APR of up to 7.25 percent on the supported digital assets. Among the supported digital assets on Hodlnaut include Bitcoin, Ethereum, USDT, DAI, USDC, WBTC, and PAXG.
The collapse of Terra Luna and its stablecoin UST caused a domino effect on several crypto projects around the world. A lot of scrutiny from global regulators including the United States has been looking into the Terra Luna case.
From regulators’ standpoint, stablecoins should be pegged by fiat currencies at 1:1 and regularly audited. Ever since the Terra Luna saga, the cryptocurrency market has had reduced confidence in decentralized stablecoins.