Governance Period 8 Updates

We’re approaching 2 years of Algorand Governance, which means it’s been almost 18 months of Liquid Governance being live. During that time, Folks has continued to upgrade the governance experience, and we’re proud to launch the biggest one yet — xALGO — which will connect Algorand and BNB Chain DeFi for the first time.

But beyond that, there’s a variety of ways to participate in governance and shape your strategy, whether it be to maximize yield, preserve liquidity, or get experimental. Let’s go over all the possibilities for governors, as well as the latest developments to governance based on previous voting periods.

xALGO: Algorand DeFi 🤜🤛 BNB Chain

For the first time, Algorand and BNB Chain have bridged! In collaboration with Wormhole, xALGO will create access to ALGO and governance for BNB Chain’s DeFi scene.

Why? xALGO bolsters the decentralization of governance voters and holders of Algorand. The large DeFi community on BNB Chain can now get exposure to the ALGO token and governance’s yield.

Okay, so what do I do? Minting xALGO is a simple process: commit ALGO on Algorand, get xALGO sent directly to your wallet on BNB.

Tell me the good part. xALGO can potentially grant you yield from multiple sources at once:

• Governance: xALGO can be traded on a DEX and can be redeemed for ALGO only during the commitment period. The price of xALGO will consistently trend upward as the token accrues more interest.
• Liquidity Provision: Providing liquidity to the xALGO/BNB pool on a BNB DEX will get you trading fees and additional rewards.

gALGO: Liquid Governance Flies Higher

You may be familiar with Liquid Governance: commit ALGO and mint gALGO to collect yield while keeping your liquidity. Vote, or don’t — you won’t lose your rewards. The flexibility of gALGO has made it one of the most-popular DeFi offerings on the entire chain.

There are a few ways to structure a Liquid Governance strategy, some of which will follow below:

1. Leveraged Commit: Multiply your commitment by up to 4x to increase your voting power and your APY.
2. Lending Pools: Use your gALGO to contribute to the gALGO/ALGO Lending Pool on Pact, currently offering significant incentives for participation alongside the standard trading fee and lending market fee accrual. More rewards will be distributed to Lending Pools next quarter!
3. Liquidity Provision: Provide Liquidity for a gALGO pairing in any pool. Then, you can commit the LP tokens into traditional governance to pad your voting power and APY.
4. Trading: With gALGO being one of the most liquid assets on Algorand, it’s easy to start trading ASAs after committing to Liquid Governance.
5. NFTs and Gaming: gALGO is accepted as a method of payment in many leading NFT marketplaces. It’s also accepted as payment in some games, or able to be won in friendly competition.

Find a complete list of gALGO use cases in our Ecosystem Directory.

DeFi Rewards Boost

We’re thrilled to announce that DeFi Rewards will be boosted again in G8! Thanks to the support of the Algorand Foundation, Folks will be distributing ALGO to liquidity providers participating in Lending Pools, Lending Markets, and Liquid Governance. Beyond DeFi, some rewards will be used in campaigns to onboard users to the Algorand ecosystem with the goal of boosting TVL, volume, and active wallets. Stay tuned for more announcements about allocation of rewards!

What happened in previous governance votes?

Let’s quickly recap the results of G7’s votes.

• Measure 1 — Should the Algorand Foundation continue to provide liquidity to DeFi protocols in order to support key activities in the DeFi ecosystem?
• The winning option was “yes”.
• Measure 2 — Should the DeFi rewards allocation remain the same as the previous period (20MM ALGO) or be a higher amount (25MM ALGO)?
• The winning option was “25MM ALGO”.
• Measure 3 — Should we run the Targeted DeFi Rewards program for the remainder of 2023?
• The winning option was “yes”.
• Measure 4 — What amount of ALGO DeFi rewards should be allocated for distribution through the Targeted DeFi Rewards program?
• The winning option was “7.5MM ALGO”.
• Measure 5 — Should the NFT Rewards program be created with its pilot allocation starting in the next governance period?
• The winning option was “yes”.
• Measure 6 — How much should be allocated to the NFT Rewards program pilot?
• The winning option was “500k ALGO”.

To find the full descriptions of each voting measure here, click here.

We hope you feel more comfortable and confident after learning about all the developments around governance. Find which strategy works best for you, and let us know on our social channels!

— The Folks Team