The Perspective of Folks Finance on the Proposed Measures for Algorand Governance Period 4
As of August 23rd, 2022, the Algorand Foundation has published the voting measures for Algorand Governance Period 4. The Foundation appears to be focused on establishing greater synergies between Governance and DeFi.
Before we share our view, it’s important to clarify the proposals. Below are summaries of the proposals, found on the Foundation’s Governance portal.
The weight of the decision to implement one, both, or neither of these measures is colossal. Governors have the opportunity to significantly impact the dynamics of Algorand’s DeFi ecosystem. The vote must be considered well.
As a lending protocol offering Liquid Governance, Folks Finance would directly benefit from the first proposal, and we appreciate the Algorand Foundation’s support of Governance solutions. Being able to distribute increased yield is something we’d want to do for our community. In addition, it incentivizes Algorand DeFi adoption and would grow Algorand TVL.
There is one aspect of the 2nd measure which we would like to contribute an idea to: depositing LP tokens as collateral. Folks Finance’s lending markets support the use of ALGO/USDC LP tokens from Tinyman, as well as ALGO/USDC and ALGO/gALGO LP tokens from Pact. If the 2nd measure were to be implemented, qualifying deposited LP tokens as a governance commitment would be beneficial for individual providers by supporting advanced usage of Algorand DeFi. Users of the lending protocol would also experience increased trading volume and depth of the Folks lending market.
Folks Finance is looking forward to the vote, and thanks each individual for participating in governance alongside us. In parallel, there will be another vote for Liquid Governance users soon, and we look forward to your participation there as well. Look out for updates on our V2 in Q4.
The Folks Finance Team