Algorand releases upgrade to add smart contract and token issuance functionality

The Algorand Foundation released its first upgrade to the Algorand protocol yesterday that, if accepted by network nodes, would expand the network’s functionality. Algorand 2.0 includes three key capabilities: smart contract execution alongside a new non-Turing complete scripting language called TEAL; a token standard (akin to the ERC-20 standard) to enable the creation and issuance of tokens; and atomicity for token transfers.

Why it matters:

• As a precaution, the team opted for a non-Turing complete smart contract language in TEAL. Turing-complete languages offer more functionality, but the added flexibility also increases the number of attack vectors, most notably exhibited in the combination of immutability and recursive logic (see: The DAO Hack). Despite the limited potential functionality, Algorand’s Head of Product, Paul Riegle, said the team doesn’t “believe that turing-complete is necessary for the majority of the use cases.”
• At the moment, it does not appear the upgrade is complete on mainnet. Algorand engineer Evan Richard relayed not “enough stake has signaled readiness for the upgrade…yet.” A quick check on the status of a mainnet node confirmed the new version is still awaiting acceptance.
• The release coincided with the announcement that World Chess plans to hold a “hybrid initial public offering” and launch their equity-backed security tokens on Algorand. The tokens would be the first one issued under the new ASA standard.