How to join Algorand Consensus to earn rewards from Folks Finance
In Q4 2023, 70,000 ALGO have been allocated from Folks Finance’s Targeted DeFi Rewards to incentivize participation in Algorand consensus. The mission of this initiative is to bolster the security and decentralization of a core aspect of Algorand’s infrastructure by encouraging healthy and constructive operation of Algorand nodes.
The 70,000 ALGO will be distributed proportionally based on how many blocks were produced by each individual participating in Algorand consensus through Folks.
At the time of writing, Folks Finance offers the only way to earn rewards for participating in Algorand consensus. This article will provide you with all the details and instructions you’ll need to join consensus and start earning rewards!
What is Algorand Consensus?
Algorand’s consensus mechanism is what keeps the chain reliably creating and approving blocks. It is a unique approach to achieving decentralization, security, and scalability for a blockchain network. Using a system called Pure Proof-of-Stake (PPoS), participants are selected to propose blocks and vote on block proposals based on the number of ALGO tokens they have committed to consensus. Unlike traditional Proof-of-Stake systems, Algorand’s protocol ensures that every individual token has an equal chance of being chosen to vote, irrespective of the total stake of the owner. This selection process is random and secret, making it resistant to adversarial attacks. Through this mechanism, Algorand achieves fast transaction finality without forking, ensuring an efficient decentralized network. Click here to read about consensus on the Algorand Developer Portal.
What does it mean to participate in Algorand consensus?
Participating in Algorand consensus means properly staking ALGO through a node. The ALGO will then be eligible to propose the creation of blocks or vote on the approval status of blocks.
How do I make sure I get the consensus rewards from Folks Finance?
To reduce complexity and operational expense, at this time, rewards will be distributed solely based on how many blocks you produced.
We will not monitor for good node behavior, but rather use the blocks produced as a proxy for good node behavior. An account which says it’s online, and is not actively participating will produce less blocks than it would have otherwise, leading it to receive less rewards.
Therefore to ensure you are not harming the network and that you’ll receive full rewards, it is strongly advised to monitor your participation and verify you are voting and producing blocks consistently.
How do I earn consensus rewards through Folks Finance?
- Mint gALGO.
You’ll have to be committed to Liquid Governance by minting gALGO.
The opportunity to mint gALGO is available during the first two weeks of each quarter, coinciding with the opening of a new Algorand governance period. If you do not have any minted gALGO currently, you will not be able to earn consensus rewards through Folks Finance until you get another chance to mint gALGO.
2. Click on “Consensus ◻”.
In the corner of the “Your Commitment” box, you should see the word “Consensus” next to an icon of a cube.
Click this to open the modal where you will enter the necessary information to join consensus. Make sure the wallet you used to mint gALGO is connected to the Folks app.
Options for how to join consensus
Folks Finance does not officially endorse these community-built solutions and recommends that individuals do their own research before initiating use.
1. Austs’ One-Click Node
High Forge Founder AustenProbst has created a simple application to start participating in Algorand consensus which is compatible with Folks Finance’s requirements. To get started:
- Navigate to https://github.com/AustP/austs-one-click-node.
- Read the README.md text.
- Navigate to the releases page and download the version compatible with your operating system.
.exe = Windows
.deb = Linux
.dmg = MacOS
6. Open and install the downloaded file.
7. Open the Austs’ One-Click Node application.
8. Allow node to sync.
This may take some time. Do not close the application or shut down your operating system while the node is syncing.
9. Open on the consensus modal on Folks Finance and copy the Escrow Address.
10. Click the blue wallet button on Austs’ One-Click Node.
- Click “Add” next to “Watch”.
- Paste the escrow wallet you copied from Folks Finance.
- Click “Add” again.
11. Click “Generate Keys” and wait a few minutes for the generation to complete.
12. Copy and paste the following from Austs’ One-Click Node into the modal on Folks Finance:
- Vote Key
- Selection Key
- State Proof Key
- Vote First Round (copy the number)
- Vote Last Round (copy the number)
- Vote Key Dilution (copy the number)
13. Click “Register” on Folks Finance’s Consensus Modal.
- Your node should show online status within 60 seconds. After about 300 rounds, which means 300 blocks, you will begin to see your “Blocks Proposed” and “Blocks Voted” metrics go up. With block times currently about 3.4 seconds, going online should take about 15–20 minutes.
“Blocks Proposed” and “Blocks Voted” will only go up if enough ALGO is staked.
- Low amounts of ALGO may only vote a handful of times and may not propose a block. Click here to check Metrika.co, which will show the minimum required stake to propose a block.
Following these steps should have successfully brought your ALGO stake online.
When using Austs’ One-Click Node, the app MUST STAY ON AT ALL TIMES to continue running the node. Quitting the app, closing, or turning off your computer will interrupt the node’s connection.
Keep track of the “Vote Last Round”, and regenerate your keys before that round comes to pass. It’s recommended to regenerate keys at the start of each governance period.
Built by Vote Coin Founder Ludo Scholtz, A-Wallet is an Algorand wallet which offers the ability to directly connect to consensus. It’s compatible with Folks Finance consensus as well. To get started:
Check out the video: https://youtu.be/WP34oa2tVHk
- Navigate to https://www.a-wallet.net/.
- Click “New Wallet”.
- Set a name and password for the wallet.
- Click “New Account” in the top menu bar.
- Click either “Create basic account”,“Import Account”, create multisignature account or import ledger account. The wallet you use will need to be the wallet through which you minted gALGO.
- If you choose “Create Basic Account”, record and store your 25-word seed phrase somewhere safe.
- Click “Start the Challenge” and complete it.
- If you choose “Import Account”, import a 25-word seed phrase from a previously created wallet.
- If you choose HW — Ledger account, you can use folks finance services with ledger or multisig account protected by ledgers
6. Create votekey, selection key and another key registration at one of the public Algorand nodes AlgorandPublicData/participation/mainnet-v1.0/public-participation-providers.json at main · scholtz/AlgorandPublicData (github.com)
For example https://kmd.h2.a-wallet.net/swagger/index.html
7. Go to https://app.folks.finance/, authenticate using Wallet Connect 2 , enter your key registration parameters, and make your account online.
Following these steps should have successfully brought your ALGO stake online.
Keep track of the “Vote Last Round”, and regenerate your keys before that round comes to pass. Make sure you watch and follow the video provided by Ludo Scholtz, linked above the instructions, to make sure you’re joining correctly.
We’d like to thank the community for providing us with interesting and helpful feedback regarding the best ways for Folks Finance to establish consensus rewards and distribute them. The feedback we receive is always taken seriously into consideration. We are grateful for you all!
About Folks Finance:
Folks Finance is a leading DeFi platform providing innovative tools for lending, borrowing, trading and managing digital assets, all in one place. Folks Finance streamlines the DeFi experience with a UI and UX competitive to centralized exchanges, all while running on permissionless smart contract technology.