In the next month a new period opens to enter the community governance of Algorand, empowering users in decision-making on the blockchain network. Folks Finance is a powerful DeFi platform, which allows you to enter the governance program with great advantages thanks to “Algorand Liquid Governance”. In this article we tell you all the details and news that are coming.
Community Governance in Algorand
Algorand Community Governance is one of the most innovative programs in the blockchain ecosystem in recent times. Moving towards full decentralization, community governance allows users to vote on decisions about the future of the network by committing $ALGO tokens, giving them the ability to participate in voting sessions and earn rewards in return. In this way, users are empowered to be participants in the destiny of the network.
Governance terms last 3 months, during which at least one voting session takes place. It is important to clarify that to continue being entitled to the rewards, users must participate in all of them and not withdraw their minimum committed balance. The drawback that this brought is that by having the total value locked (TVL), users cannot use their tokens for three months, limiting liquidity in the ecosystem. That is why, during periods 3 and 4 of governance, it has been voted to expand the program to DeFi protocols and thus generate greater uses.
Folks Finance was the first protocol to implement the new governance modality through «Algorand Liquid Governance», allowing users to generate liquidity so that they can continue operating, without losing the benefits of governance. This system works thanks to the gALGO token, which is awarded in a 1-to-1 for the amount of ALGOs committed in governance through the Folks Finance platform. In the following paragraphs we will delve into this and what advantages it provides.
Advantages of Folks Finance’s “Algorand Liquid Governance” program
Folks Finance’s Algorand Liquid Governance provides liquidity to users so they can continue to participate in the blockchain ecosystem, without losing the overall benefits of the governance program. As we mentioned before, through this modality of participation, users receive gALGO tokens in a 1-to-1 ratio with their committed ALGOs, which can be used in a vast ecosystem to obtain higher returns.
In turn, users who participate in governance through the Folks Finance platform get higher rewards than doing it directly through the Algorand Foundation. To understand how this works, let’s keep in mind that the APR varies depending on the number of participants in each period, but based on this data we can understand the benefits.
If we take current values into account, a user who enters Algorand community governance through the foundation gets an APR of 5.59%, upon which rewards will be calculated based on their ALGOs committed. On the contrary, when doing it from Folks Finance’s «Algorand Liquid Governance», users receive the base APR of 5.59% + an extra incentive of 9.77% for participating through DeFi, thus obtaining a total APR of 15.36%, on which the rewards will be calculate at the end of the period on your committed assets.
On the other hand, a higher APR is just one of the advantages that users get by participating from Folks Finance. Commitment through the DeFi platform provides liquidity through gALGO tokens that can be used in a wide range of projects for the duration of the governance period, without compromising future benefits, as the balance in ALGOs remains locked.
To connect your wallet and join the Folks Finance «Algorand liquid governance» program, enter here.
As an example, these are some of the projects that belong to the Folks Finance ecosystem, in which the gALGO tokens provided by committing your ALGOs can be used:
- Fracctal Monsters: use gALGO to buy NFTs.
- Algodex: exchange gALGO for ALGO.
- Algofi: provides gALGO to pools to earn interest.
- Exa Market: use gALGO to buy NFTs and participate in shuffles.
- Tinyman: provides gALGO to pools to earn interest.
- Pact: provides gALGO to pools to earn interest.
- Zone: play and win gALGO.
- Algogems: uses gALGO for various operations with NFTs.
- Aegir Tactics: uses gALGO in its card game platform.
To learn about all the projects in the ecosystem and the utility you can give to the gALGO, enter here.
Another option for more expert users is to leverage the position of their government commitment to increase benefits. Leveraged commitment allows users to repeat their commitment up to 4 times (4x) through a multiplier. To operate under this modality, it will be necessary for users to use a collateral guarantee to be able to carry out the operation and avoid the liquidation of their balance.
Although this modality can increase profits exponentially, it entails greater risks associated with position liquidations, for which we recommend that you investigate further into this type of commitments and leverage risks.
To learn more about leveraged commitment, go here.
News in Folks Finance for the next period of community governance: possibility to enter as “xGov”
The next period of community governance through Folks Finance, comes loaded with great news for all users. In this new cycle, the «xGov» will be incorporated through the DeFi platform, who will be governors in charge of proposing measures to be voted on in future sessions. This is a step forward that comes from the hand of Folks Finance to continue decentralizing and democratizing the Algorand ecosystem.
This type of actors on the scene proposes a game changer, empowering users even more in decision making. Currently, the proposals that are put to a vote are developed by the Algorand Foundation, taking into account the issues that are considered most urgent within the community. From the incorporation of the «xGov», any user of the ecosystem will be able to create proposals for the community to decide if they are appropriate to include in the voting sessions.
Folks Finance will give users of its platform the possibility to enter the community governance program as “xGov”. Under this modality, participants must make a commitment to their position for a term of 12 months, and in case of non-compliance they will be disqualified from the program.
In turn, the «xGov» will have an experience system, which will increase as the time of their commitment passes. This means that not only the number of ALGOs committed is taken into account, but also the seniority as xGov. Thus, for example, an «xGov» that has been committed $ALGOs for 24 months will have more voting power than another governor who has been committed for 12 months, even though both have the same amount of committed tokens. Thus, experience accumulates over time and further empowers that governor.
The community governance program at Algorand allows users to make decisions about the fate of the network. Folks Finance provides great advantages for those who enter through “Algorand Liquid Governance”, such as obtaining a higher APR and providing liquidity through the gALGO token. On the other hand, with the incorporation of the «xGov» as of the next period, the decentralization and democratization of the ecosystem is expanded.
More information about Folks Finance
To learn more about Folks Finance, we invite you to visit its website, as well as the social networks below.
Aviso de responsabilidad:
Este artículo no contiene consejos financieros, ni recomendaciones de inversión de ningún tipo. La información brindada se ofrece sólo con fines educativos y didácticos en cuanto a tecnología Web3 y análisis sobre sus casos de uso.
Las inversiones con criptomonedas, NFTs, tokens u otros activos digitales conllevan riesgos y no se encuentran regulados, por lo que los lectores deben realizar su propia investigación antes de tomar cualquier tipo de decisión bajo su entera responsabilidad, así como adaptarse y observar las diferentes regulaciones legales según su país de residencia.