So its almost like we need a way to go to a portal and connect wallet or account under each category of Defi, and then it can verify that wallet or account for the activity related to that category. Works for one wallet or account, works for multiple. Integrate with Governance, DEXs, Pera Wallet, My Algo, NFT marketplaces, .algo Domains, Github, discord, twitter, etc. We could even integrate with this forum(add connect wallet to track and reward participation like reddit karma points).
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hereās what Iām thinking ā¦ no need to draw it out in a long response.
Provide DeFi protocols with $10M+ in TVL with 50% of the governance rewards, split pro rata, to distribute as they see fit. No need to complicate this with seats and tiers etcā¦
More importantly, I would propose an allocation of the governance rewards be provided to DeFi protocols, that meet certain criteria, for the sake of paying for rolling audits. Perhaps the Algorand team could also be considered an auditor so that these protocols would just pay back the foundation (but not obligated to use the foundationās team).
Security should be focus #1 today!
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As regards to Governance a couple of ideas which come to mind could be :
(A) Reward based on Contribution
The best would be to have different reward tiers for governance, e.g.
Node Operators, dApps developers, DeFi = receive X Algo rewards
Ambassadors, Evangelists = receive Y algo rewards
Passive Stake Hodlers = receive Z Algo rewards
So like this it is an inclusive system, rewarding every participant. The reward will be based on the level of contribution.
(B) Governors vote on Projects
To include governance further and allowing governors to have a say in the Algorand ecosystem, the foundation can also publish a set of projects which requested funding and governors can vote on these.
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Sorry but i dont like this idea AT ALL. Who says that participating in Defi should be the āblessedā activity. This is GOVERNANCE we are promoting hereā¦THAT IS ALL. If an activity such as a certain Defi platform cant garner attention on its own then that is its problem. Bestowing some great benefit to a random utility breeds all sorts of corrupted systems and will only lead to another corrupted way of doing business where a few āchosenā businesses get an unfair advantageā¦and dont get it twistedā¦all these dapps are BUSINESSES. Their stock is simply in the form of their own tokens (cover your ears regulators). It is up to governance to guide the algo PIPES not pick winners and losers. Fellow algonaughts KEEP GOVERNANCE PURE.
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Or we just abandon this silly convoluted idea of āparticiptationā. You should only be rewarded for GOVERNANCE. If you govern properly people will find the infrastuture attractive to build on and winners win on their own merit.
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Keep ecosystem rewards out of governance. I dont even like this system of picking winners and losers and considering some āworthyā and others not.
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Blockchain philosophy is all about incentive alignment. So if we get it right for Algorand governance, i.e. all parties are fairly incentivised, that will be a big win for Algorand both as a technology platform but also as a powerful community model for incentive sharing.
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I partly agree regards the fact that dApps need to survive, thrive, evolve or die on their own use case, but if there are no dApps on the Algorand protocol then the protocol is useless. Also business people taking risks of building dApps on Algorand need to be helped, in a structured way. Then they need to stand on their own 2 feet or die. Other protocols offer grants and incentives to developers and entrepreneurs to take the risk and build on their protocol. If Algorand does not help these builders they would build on other protocols. Web3 is the future but it is risky, so any help dApps developers can get is important to kick-start and popularise the protocol. The protocol and dApps success cannot be seen in a decoupled way but the success of one feeds the other. So we must see how we can have the best incentive alignment strategy for all parties involved, whether they are node operators, passive stakers, dApp developers, ambassadors, etc, obviously with the proper checks and balances.
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Agreed. The incentives for participating in DeFi and participating in governance are dangerously misaligned. Participation in DeFi, as it is now, is mostly about yield-chasing, not about governing Algorand. On the other hand participating in governance is almost entirely about governing Algorand, and the governance reward system is supposed to incentivize for that purpose.
Also, who says that participating in DeFi is active participation? Much of DeFi participation is staking with some platform, just like so-called āpassiveā Algorand governance.
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While I think that rewarding DeFi participants is important, I also would say that one thing that makes governance great is the fact that it is absolutely risk free. I would never trust all my Algos to be committed in DeFi as every DeFi project is still in its infancy and exploits could happen. Nor should a blockchain that wants to be decentralized makes its user having to trust a third party in order to participate - a point that Silvio makes every time he speaks publicly. What I think is a better solution is NOT a reward for DeFi users, but making harder requirements to participate in Governance or decrease rewards - or both.
What Iāve been thinking lately is that with the addition of xGov it could be implemented a system with 2 separate reward pools. 1 lesser pool for Governors who only have to vote and who have the same requirements as of right now, and 1 pooll with xGov. For xGov the only requirements would be to run a node - either a participation, an archive or a relay node. This way nearly everyone who wants to commit to the protocol could set up a node, and node runners would be rewarded. I also would strongly advise the Foundation to develop installers to make it easier for everyone to get a node up and running. That way everyone gains - the users who are involved get better rewards, the network grows more decentralized, the individuals who like the low effort - high security rewards still get some.
I donāt think that rewarding DeFi users is the Foundation job - this has already be done with the Aeneas programm. At the end of the day DeFi projects must find a way to entice users, and the only thing that the Foundation can do to help is making it a little less enticing to simply commit to governance, while still rewarding users who actively help the network grow.
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I support the idea of rewarding the users of dApps. To be a good governor, one must also be familiar with the Algorand ecosystems such as dApps.
- Passive governor: 1 seat
- Governor that participates in one of the approved dApps: 2 seats
- Governor that participates through dApp, e.g. Algofi Vault, Gard: 3 seats.
3 seats for this option because there is more risk involved. Also this will increase the TVL dramatically.
We need to figure out a way to exclude the centralized exchange wallets from the governance. Only the exchange benefits, not the Algo holder.
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This is probably the best option.
I would propose to reward people staking assets on defi protocol instead of just rewarding liquidity for example
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Hello there. Thank you for the interesting feed. For background, I am a Algo user. I am mostly using Algofi and Lofty, also Folks Finance to a lesser extend. I am participating in the liquid governance of both Algofi and Folks. Developing DeFi and the ecosystem in general is a key step for Algorand development. Right now Algorand promote participation in three ways : participation rewards (to be discontinued very soon), governance rewards and Aenas rewards.
With the suppression of participation rewards, gov rewards are what is the closest to company dividends. In that regards, if we look at algo holders as shareholders, I believe that we should stick to the scheme 1 committed algo = 1 vote = 1 reward. To my knowledge, most of PoS blockchains work like that (via a delegation system, for intsance) and it is not preventing the development of the DeFi.
Allowing algos in DeFi to be committed is a great idea. Algofi (vAlgo) and Folks Finance (gAlgo) offer products that solve this issue. Imposing one standard directly at the level of the protocol seems to be going in the wrong direction to me.
That being said having some particular accounts play a particular role in the governance system seems also natural. Going back to the shareholder/company analogy, there are also corporate executives (in our case the Algo foundation) and non-executive directors. Those non-executive director are not directly link to the management but they are often consulted on some issues, have a voting power and receive a sitting fee.
From my understanding, this is what the xGov proposition is about even though the exact implementation is still unclear to me. Could it be possible to automatically allow to DeFi protocols a certain number of xGov seats (or another kind of special governor seat) ?
Determining which protocols have access to it is of course difficult. There should be of course some minimal requirements, for instance that the team has had some kind of doxxing, that it respects some good practice (open source), being on mainnet since n numbers of months and so on.
Then the seats could be attributed based on a percentage of the TVL rather than a hard cap but there should also be away to avoid very small protocol to get dust.
If this works correctly this could later be generalized to other ppl (developers, node runners, creators and so on).
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Thanks Michel! A few numbers: 10.5% was the APY in Q1, 7.5% is the APY now, 4.5% would be APY if all users not yet in DeFi were Govs. We can direct some governor incentives straight to DeFi without killing Governance, which is our path to Decentralization, and without squeezing Governor hodlers.
A very basic example: even just devoting 1/10 of 280M Gov rewards to DeFi Govs means approximately +30% APY to current Defi Govs, and +10% APY even if they triple. We can discuss here to come to a solution which is fair to everyone.
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+1 ser, what Iāve seen in the last year was foundation spending massively on worthless partnerships, grants, parties and so on. It was like these were promoted just so we can pomp a few pennies so the whales unload even more, and everyone can track easier this correlation by looking at the charts. Imo the foundation job should be to incentives the built and migration of dapps to Algorand, for this they need to engage with crypto communities more actively and stop the dumb promotions as carbon negative to attract devs and investors. A part of these 280m allocated yearly for gov can be sacrificed for defi dapps. Letās not forget that Algo is advertised as a Futurefi blockchain and not just as the greenest gov chain. I personally, I considered useless this passive income with the depreciation of Algo 70% over a year, and when youāre seeing even VCs as Scarammuci promoting Algo as a blue chip but on the other hand saying that his holding only 100m from 250m in couple a months, than we have a serious problem around.
Yes Fifa itās a corrupt system in some ways, but itās the biggest partnership Iāve seen in 2 years pulled by Algorand and I do hope itās not just another worthless sponsorship and some usecases will pop up from this one. The impact of this news and the hype itās in charts and mc, lame if youāre asking me, and it only shows u that what happened in 21 wen Algo pomped without no news, was VCs and early backers game to get their AV faster in a bull run, and it also shows the level of confidence in Algo from investors.
Decipher, Miami, 500m fund announced by Borderless Capital and Co, and still nothing pooped on chain from these, whatās telling u? So, maybe the Foundation should change their approached audience if they really want to achieve dapps and users adoption. Otherwise, we will keep empty the treasury bag by promoting green horses on the walls for whales exits.
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Like Silvio said, all you need is to be good at one thing so the team should focus on 1 fundamental issue to tackle. If it is DeFi then they need to know it requires retail, then focus on retail marketing and promotion but not with the current dinosaur marketing team.
Bottom line, stop spending on promotion from CBDC to Institutions to The World Economic Forum etc. It hasnāt worked and they need to draw the line, asking tokenholders to kiss their reward goodbye is just deflecting the underlying issue. Focus on a topic like DeFi and really work on it because every other L1 has and Algorand is already 12 months behind.
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I think Foundation and everyone else, should realize eventually that āthe tech doesnāt sells itselfā
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The āDefiā protocols shouldnāt get more support from the Foundation until they are actually decentralized.
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Hi all,
Iāve been an ALGO holder and DeFi user for a year. Iām a strong believer in the tech. I also strongly believe that the governance incentives in place completely miss the point.
From a general standpoint, what are we trying to achieve?
We want to create an incentive structure that incentivises ALGO holders to help the ecosystem flourish.
What can it mean? Voting on decisions, participating in DeFi, running a node, creating NFTsā¦
Where should the focus be?
The main objective is to grow the DeFi TVL since is an obvious correlation between TVL and token price.
The focus should not be on incentivising voting, running a node, or creating NFTs since there are no real problems there. At the moment, the only problem to solve is DeFi TVL.
Should governance be rewarded?
In my opinion, governance should not be rewarded. The reward is the possibility to give an opinion.
What should be the guiding principle for DeFi incentives?
As much as possible, we should rely on the main DeFi players to create the correct incentive structure to grow their TVL. As always, competition will make wonders!
My proposal
- We replace entirely the current governance incentives with DeFi incentives.
- All trusted and big enough (I like the 10mio threshold) DeFi platforms receive incentives correlated to their TVL. They choose entirely how they allocate them to their users.
- These platforms allow users to participate in governance (itās already the case).
- Since governance is not incentivised anymore, we can simplify the rules around voting. No need for a 3 months balance commitment, we can simply have a rule that prevents users from voting multiple times, such as: you must maintain you balance after the vote for it to be taken into account.
basically if the tech sells itself then why do you even need the marketing team in the first place. not that the current marketing team has done anything significant for the last 3 years until yesterday.
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