Overview
Pact Fi is a decentralized exchange built on the Algorand blockchain, offering both constant-product (Uniswap v2-style) and concentrated liquidity (Uniswap v3-style) automated market making. The protocol launched during Algorand's DeFi expansion in 2022 and has managed to survive the subsequent contraction that saw major Algorand DeFi protocols like AlgoFi shut down entirely.
Pact distinguishes itself through its concentrated liquidity implementation on Algorand — a technically non-trivial achievement given Algorand's TEAL smart contract language constraints. The protocol also provides a lending integration and stableswap pools. As of 2026, Pact remains one of the handful of operational DEXs on Algorand alongside Tinyman, serving the residual liquidity needs of the Algorand ecosystem.
Smart Contracts
Pact's smart contracts are written in TEAL (Transaction Execution Approval Language), Algorand's native smart contract language. The concentrated liquidity implementation is noteworthy — adapting Uniswap v3-style tick-based liquidity to Algorand's application model required significant engineering. The contracts support multiple pool types: constant-product for general trading, stableswap for correlated assets, and concentrated liquidity for capital-efficient market making. The contract architecture is clean and well-documented, with open-source code available for review.
Security
Pact's contracts have been audited by Runtime Verification, a reputable firm in the Algorand ecosystem. No exploits or fund losses have been reported. Algorand's base layer provides strong security guarantees — instant finality means no reorganization attacks, and the AVM (Algorand Virtual Machine) has a smaller attack surface than the EVM. The protocol benefits from Algorand's deterministic transaction model, which eliminates MEV and front-running risks that plague Ethereum-based DEXs. Security is one of Pact's strongest areas.
Liquidity
This is Pact's fundamental challenge. The Algorand DeFi ecosystem has contracted dramatically, and total liquidity across all Pact pools is modest. Major trading pairs (ALGO/USDC, ALGO/goBTC, etc.) have functional but thin liquidity. Large trades will experience significant slippage. The concentrated liquidity feature helps capital efficiency for active LPs, but the total capital deployed is small. Pact competes with Tinyman for a shrinking pie of Algorand DeFi liquidity.
Adoption
Pact's daily trading volume is a fraction of what major-chain DEXs process. The Algorand DeFi user base has contracted significantly following AlgoFi's shutdown, the broader crypto bear market, and reduced Algorand Foundation ecosystem incentives. Pact's users are primarily Algorand loyalists and yield seekers utilizing remaining farm incentives. The protocol has not achieved significant cross-chain awareness or adoption beyond the Algorand community.
Tokenomics
Pact does not have its own governance token as of the latest information. The protocol operates using ALGO and ecosystem tokens for liquidity provision and trading. This is actually a positive from a user perspective — no extractive governance token diluting LPs. Revenue comes from trading fees (typically 0.3% for standard pools, variable for concentrated liquidity). The lack of a token also means no speculative trading incentive to draw attention, which may limit growth but keeps the protocol honest.
Risk Factors
- Algorand ecosystem decline: The broader Algorand DeFi contraction limits growth potential
- Low liquidity: Thin pools mean significant slippage for larger trades
- Small user base: Limited to committed Algorand ecosystem participants
- Competition from Tinyman: Shares the small Algorand DEX market with another survivor
- Platform risk: Pact's future is tied to Algorand's blockchain relevance
- No token incentives: Lack of governance token limits ability to bootstrap liquidity
Conclusion
Pact Fi represents quality engineering in a challenging environment. The concentrated liquidity implementation on Algorand is technically impressive, the security track record is clean, and the protocol operates honestly without extractive tokenomics. However, Pact's fate is inextricably linked to Algorand's DeFi ecosystem, which has contracted severely. Being the best DEX on a chain with limited DeFi activity is a difficult position. The 3.4 score reflects strong technical execution offset by the fundamental challenge of operating on a chain with declining DeFi activity.