Governance 2024 Timeline

This Governance 2024 Timeline, published on 13 March, outlines the governance program plans for this year, in particular how governance rewards will be affected by consensus rewards.

Once we have a date for the consensus rewards update, we will be able to define whether or not we will have governance rewards in Q3, all else will cascade from there.

Feedback is welcomed <3


Dear Adri,

I would like to summarize the key points from the 2024 Roadmap, where you can find the section “The Réti: Consensus Incentivization.” There are two references provided: John Wood’s Algorand Concesus Incentivisation and a talk through the paper.

From what I recall, John Wood advocates for increasing Algorand staking from 15% to a minimum of 25%, similar to ETH, and suggests phasing out relay nodes due to their high operational costs.

During Governance period 10 it was decided that the minimum staking balance should be at least 30,000 Algos. The roadmap also emphasizes the expansion of fast participation nodes, as illustrated by Ludo @scholtz 's guide about setting up an Algorand participation node in cloud.

Since server costs represent actual expenses, compensating with a stablecoin rather than inflating Algos could prevent potential devaluation. This approach aims to avoid a scenario where participation node operators might sell off Algos, triggering inflation—a classic Catch-22 situation.

I recommend postponing Q2 governance rewards and reallocating them as additional Q3 consensus rewards. It would be prudent for the Foundation to conduct a cost analysis and ensure adequate provision of additional stablecoin for Q3 and Q4.

P.S.: Although Staci Warden mentioned ‘we don’t think about price’, it’s undeniable that price considerations become crucial when discussing staking and the expansion of participation nodes.

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That has not been advocated for by JAWs to my knowledge and I would invite you to demonstrate otherwise. Everything I’ve seen about the topic relates to relays being option and the likelihood of a bifurcated fee scheme.

From where would these stablecoins come if not by selling Algo to obtain them?

“phasing out relay nodes due to their high operational costs”.

You are right, he speaks about making them optional.

See for example
at 24:13. “…you can just you use the peer-to-peer Network completely with zero Reliance on the foundation or relays or anything else but if people want to run relays there’s still an option um for people who want very high frequency trading and other things like…”

A minute later he speaks about the millions of dollars spent for relays, and descreasing relay costs
by permitting non-archival relays. So I made a wrong conclusion.

“From where would these stablecoins come if not by selling Algo to obtain them?”
That would be the business of the Foundation. They could include their successful tradings in the TRs.

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After all the work that was done to create a governance portal with incentives, it does not make sense to kill all the rewards like that. Specially when you have all this momentum of governors voting. I’m all for maximizing decentralization via consensus rewards; but please leave at least 500k or 1 million ALGO per quarter for governance rewards. Power needs to be divided more evenly between validators and governors, so governance should continue to provide some rewards. Also people will be happy that they can “stake” multiple ways: staking via delegation to validators, plus staking for governance.

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