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Algorand Smart Contract & AVM – Introduces

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Currently, money and assets exchanged worldwide are moved using complex, outdated systems with many additional fees with each intermediary. As first-generation ledgers are costly and slow, they are unscalable for applications that have to solve real-world use cases. Moreover, with more demands for overseas purchasing and cross-border payments, individuals and institutions competing in the global economy need easier, faster, scalable, and safer ways to transact. 

Therefore, existing financial institutions must update outmoded technologies for better customer experiences. Algorand is a prominent smart-contract platform where intricate dApps are built. Read on to learn about Algorand and AVM-related details.

The Algorand Smart Contract Model

Algorand blockchain-driven platform has recently released its Algorand Virtual Machine (AVM), a layer-1 protocol upgrade designed to intensify decentralized app scalability for organizations and developers, maintain a negative carbon output, and facilitate instant transaction completion. On top of these advancements, the AVM will also provide program tools to developers for writing digital contracts in Reach or Python.

The smart contracts model of Algorand is powerful. Algorand Smart Contracts (ASC1) are minor programs that serve multiple functions on the ledger and run on Layer-1. Its contracts are divided into two types, smart contracts, and digital signatures. They are also referred to as stateless and stateful contracts.

Both are written in the TEAL — assembly-like language — Transaction Execution Approval Language interpreted by the AVM. Furthermore, TEAL programs can be written using Python.

TEAL developers have provided feedback via early use of the AVM, allowing creators to improve the AVM rapidly. As the AVM v1.0 release time approaches, the AVM will let contracts be written in Turing-complete languages and send asset transactions. It will execute complex agreements that can power the most demanded NFT, DeFi, and Web3 dApps.

 AVM Smart Contracts Features

AVM ecosystem allows the excellent Smart Contract platform to offer multiple possibilities for next-gen apps at scale, unlocking efficient use cases. Also, it has many supplementary opcodes and will enable programmers to use recursion, functions, and loops. 

  • AVM operates on every node in the Algorand chain and has a stack engine executing digital contracts and smart signatures, letting specialists compose contracts in Python, a simple JavaScript-like language.
  • Scalable, Secure, and Fast are hard to achieve on legacy platforms. For example, ASC1s run at over 1,000TPS and are finalized in under 5 seconds.
  • Smart Contracts comprise logic that, once utilized, can be remotely called from any Algorand ledger node by conducting an “application call” transaction.
  • Increased marked-based speed and various complex custom applications (like dApps for Stablecoins) feature in contracts.
  • Smart Signatures have the logic used to sign transactions, mainly for signature delegation. The signature’s logic is submitted with the transaction.
  • TEAL can be compared to syntactic sugar for AVM bytecode, and complete TEAL language specification is accessible in the developer documentation.
  • Low cost to execute as users send transactions having the same fee as any other operation on the Algorand ledger at .001 Algos.
  • Reduced risk with instantaneous settlement via trustful execution is a characteristic feature.

The Algorand blockchain is a fast one, immediately final (no forking, one confirmation), low-cost (.001 Algos per transaction), and green (carbon negative). These features, combined with Layer-1 primitives like ASAs — Algorand Standard Assets, have made this blockchain of choice for many digital asset issuers and asset management platforms.

Writing Smart Contracts

Smart contracts in the Algorand chain are agreements that, once implemented, are callable remotely from any node. Once deployed, the on-chain contract instantiation is named an Application and assigned an Application Id. These so-called on-chain apps handle the dApp’s decentralized logic.

To write smart contracts on Algorand,

  1. Create the TEAL file
  2. Look at the Transaction Fee
  3. Check the Length of the Passed in Passphrase
  4. See the SHA256 Passphrase Value
  5. See the CloseRemainderToValue
  6. Compile the TEAL
  7. Fund the Contract Account via Dispenser
  8. Verify the Account has been Funded
  9. Use a Non-Submitted Operation to Debug the TEAL
  10. Submit the Transaction to the Network

Smart Signatures

Smart signatures have the special logic used to sign transactions, predominantly for signature delegation. The digital signature logic is submitted with a transaction. While this logic is stored on the blockchain to resolve the funds’ transfer, it is not remotely callable. Any new operation relying on the same smart signature will resubmit the logic.

Once the signature logic is sent to a node, the AVM evaluates it. The related transaction will not be executed if a digital signature’s logic fails.

Smart signatures can be deployed in two different modes. First, when compiled, digital signatures generate an Algorand account that works similarly to any other blockchain account holding Algos or other assets. The funds will leave the Account only if a transaction is made from the Account, successfully executing the business logic within the smart signature. Here, like in smart contract escrow, the logic should be submitted for each transaction from the Account.

Why Are Smart Contracts at Layer-1 a Breakthrough?

The AVM environment enables the excellent Smart Contract platform to renowned specialist teams of researchers, cryptographers, mathematicians, economists, and proven business leaders from universal technology companies.

Algorand’s latest release continues to make it incredibly easy and fast for developers to build on its blockchain. Algorand MainNet has been active for over a year and has proven that it powers complex apps with high performance.

Other blockchain capabilities include:

  • Atomic Transfers instantaneously transfer several digital assets among many parties in a secure manner. Escrow or reliance on time-locked agreements is not required. Here, counterparty risks and payment latency are removed.
  • Asset Tokenization, ASAs, is a simple way to generate customizable assets that may be used for payments.
  • Rekeying lets users and custody providers alter Private Spending Keys anytime without the necessity to change Public Addresses, giving it more permanence and lessening operational overhead.

Algorand is a scalable, common, and interoperable platform that speeds up app development, resulting in swifter deployments with more affordable capabilities.


AVM is fueling the uncomplicated and more robust smart contracts by providing a finalized, top-notch feature set that allows seamless creation and transaction completion within one smart contract. Algorand’s digital contracts act as a seamless, trusted solution with proven adaptable, swift, and affordable performance. AVM promotes smart contract development and ensures programmers have the functionality to create secure dApps while making ledger app development more available to the wider expert community.


Can I create my smart contract on Algorand?

Algorand makes it easy and fast for new developers to create on the blockchain. With Go, Java, REST APIs, JavaScript, and Python SDKs, you can build in your preferred coding languages.

What is the ALGO token’s smart contract address?

ALGO Token in Ethereum Mainnet is implemented as ERC20 smart contract with address specified as 0x6ae5f164d006b2fcfae195436345f0aa833d4830 .

Is Algorand a DeFi?

Algorand is now the most robust, decentralized ledger platform for DeFi innovators. Its unique combination of global scalability, swiftness, and security.