Folks Finance Algo Liquid Governance - gALGO to unlock Algorand DeFi TVL
Folks Finance reveals its delegated Algorand Liquid Governance; aiming to leverage the liquid Algo for unlocking the 3B worth, Algorand Foundation Governance.
We are excited to announce the Folks Finance’s Algo Liquid Governance. The first Algo liquid staking of the ecosystem leveraging the “lost” 3 billion Algo committed in the Algorand Foundation Governance. A game-changer for Algorand Defi! The final feature to test before the protocol’s launch on the Algorand Mainnet.
The Community Governance enables all Algo holders to participate in the decision-making process on the growth, and development, of the Algorand ecosystem.
Governors commit Algo in the Algorand Governance and are being rewarded at the end with Algo Governance Rewards. The rewards can range between 6% to 24% (APR), depending on the total Algo committed.
By committing to Governance, the Governors express their commitments and must maintain this minimum balance in their wallets, for the whole Governance period (3 months). Governors must also vote on all of the Algorand Foundation proposals to be eligible for the rewards distribution.
The Algorand Foundation created the most significant decentralized on-chain vote; however, Algo committed to Governance is not functional in other protocols, which is an implicit limitation to Algorand’s DeFi expansion.
The Folks Finance Algo Liquid Governance solution solves this problem and unlocks the Algorand Governance TVL.
How does it work?
Governors who commit their Algo via Folks Finance will receive an Algo twin called gAlgo, with a 1:1 rate; only Algos deposited during the Governance commitment period will be valid to earn its rewards.
The user can continually mint gALGO at a one-to-one rate after the commitment period has ended. Although the burning will be allowed only after the Algorand Governance rewards are being distributed.
The user is free to use the gAlgo as wished, such as depositing it in a Folks Finance related pool and locking them as collateral to borrow the supported assets.
After the Governance rewards distribution, the gAlgo can be used to redeem the Algo committed and claim the expected rewards.
Users will receive a reward equal to the number of gAlgo owned multiplied by the reward rate; the Folks Finance delegation will deduct a small fee.
- Users do not need to give up their Algo liquidity while committing.
- There is no risk of losing the rewards due to missing voting. Users delegate Folks Finance, who votes on their behalf.
- Earn liquid Algo and use it as you wish.
By delegating their vote to Folks Finance, the user accepts to delegate its Algo commitment following the protocol voting choice, which will be aligned with the Foundation’s suggestion to pursue the ecosystem’s interests.
In future development, we plan to have the voting system decentralized, and the user will be able to express their choice.