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How to Develop Algorand’s dApps?

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The popularity of Algorand is directly related to the events of 2018 when the Federal Government of the Marshall Islands announced the adoption of a blockchain-based currency as a new legal tender.

At that time, SOV was chosen as the currency, with the help of which the authorities decided to solve the problem with various cross-border payment transaction types. Then it was Algorand that acted as a booster and creator of the blockchain and, further, smart contracts for this project.

As it turned out, Algorand’s functionality proved to be the most successful in issuing, managing, and distributing SOVs. Soon this led to the formation of a full-fledged decentralized ecosystem that is popular worldwide and has hundreds of use cases from various companies. The main features that contributed to this were sticking to the following requirements:

  • high speed of operations that allows you to perform thousands of transactions per second;
  • high scalability and adaptability of the ecosystem.

Also, with the help of 100% transparency and public availability, Algorand acts as an efficient platform for developing blockchain-based services, including creating smart contracts or dApps.

The Meaning of dApps

Decentralized applications (dApps) are special solutions and programs that operate in a peer-to-peer network and not on a single computer. An important feature of dApps s is that they are not under the control of a single authority. As a result, you can use them in different areas: social networks and the financial sector.

In addition to freedom from control, such applications are open source. For example, you can create an application similar to Twitter and put it on the blockchain for everyone to post messages. At the same time, after publication, neither you nor anyone else will have the opportunity to delete messages.

Among the main pros and cons of decentralized applications are the following:


  • provides maximum user privacy;
  • there are no problems with censoring content;
  • flexible and adaptive technology.


  • it is difficult to make changes to the code;
  • it isn’t easy to develop a user-friendly interface.

What is Algorand

Algorand is a user-friendly platform for creating smart contracts similar to those powered by Ethereum. It is a blockchain without permissions and has five technological elements in its son:

  • net proof of stake;
  • cross-border use;
  • decentralized approach;
  • high level of security;
  • guaranteed completion.

Algorand is the first blockchain that provides 100% and fast transaction completion without forking. Also, this blockchain has its native token called Algo.

The blockchain uses an approach called “Pure Proof-of-Stake” in its work. Typically, miners are in a competitive relationship in proof-of-work consensus mechanisms to solve complex mathematical problems. If you are the first one to solve the problem, then you are the one who gets the opportunity to add a block to the coin blockchain and get a reward.

In such conditions, the extraction of new blocks is associated with the cost of equipment and electricity, leading to the centralization of mining power. In the Proof-of-Stake protocol, token holders participate in the network consensus by staking assets.

At the same time, you can receive rewards without taking part in the consensus mechanisms. It is noteworthy that any holder of tokens who has at least one algorithm can take part in adding new blocks. In this case, priority is given to those who have more tokens.

Creation of dApp: Step-By-Step Guide

For convenience, let’s imagine that the task is to create an NFT auction dApp with the following characteristics.

  1. It should be possible to create an auction for each piece of art. At the same time, the contract must contain info about a piece of art from the moment the auction opens until it closes.
  2. It is possible to cancel the auction and return the bid to the owner.
  3. It is possible to reserve the price and return NFT to the seller if the contract terms are not met.
  4. With each new and higher bid, the previous bet amount is returned to the owner.
  5. If all contract and bidding conditions are met, at the end of the auction, the seller receives the highest bid amount, and the buyer receives the piece of art.

Remember that the credit dApp within the Algorand network requires installing Docker.

Working with a demo application

To make a dApp in the Algorand ecosystem, you need to clone the auction demo application you can find on GitHub.

Sandbox installation

For those who use Mac or Linux, it will not be difficult to download promo codes from their terminal. However, if you are using a Windows operating system, you must use a terminal that supports bash.

Also, you can clone different sandbox repositories in “./_sandbox” and activate docker containers with “./sandbox up” command. At this point, you need to set up your working environment and run some tests (if needed).

The Python virtual environment can help you with this. This can be done with the commands “python3 -m venv venv” or “.venv/bin/” if you have a “fish” type of shell. After that, you can install PyTeal and Algorand Python SDK. You can already activate the “” file that initiates the auction at this stage.

Test running

If necessary, you can launch testing by initiating the “pytest” command. This step will run through all test files in the “” document. As a rule, the task’s execution time is about six minutes. You can close the operating environment when testing is complete with the “./sandbox down” option.

App Review

With the help of a smart contract, you place a presentation application on the auction. To complete the operation, the smart contract uses the following four methods.

  1. This method creates a smart contract code directly and selects the state of the new auction in the blockchain network. The development process also includes managing the seller’s profile, setting the NFT ID, and keeping track of the start and end times of the auction, the auction’s reserve price, and the minimum bid increment. The consensus mechanism and assets security are also on this list.
  2. There are two reasons for using the second method: the smart contract ends the auction by making a funding transaction and placing the NFT in a smart contract. Within this operation, the system calculates the transaction assets commission, full bid amount, new bid value, and so on.
  3. With the help of this approach, various bidding scenario types are implemented: holding the bid, regulating the time available for bidding, returning the amount to the previous bidder if a larger one blocks his stake, and so on.
  4. The fourth method is used to close the auction. In this case, the piece of art is returned to the seller if the smart contract conditions are not met or if it is transferred to the buyer.


Does Algorand have dApps?

Yes, Algorand blockchain technology supports this option and mainly focuses on creating dApps with the Pure Proof option.

How many projects are building on Algorand?

At the time of writing, about 700 companies have hundreds of real-world use cases (for example, decentralized finance projects with various features, scripts for bidding, dApps solutions for sellers, etc.) based on the Algorand blockchain.

Can you build NFTs in Algorand?

Yes, you can use the Algorand standard assets for this purpose. These assets can be inbuilt into the protocols and activated via special smart contracts.