Hi everyone, I’m one of the official governance committee members and I’m on the committee to represent the community. As a voice for everyone and as an Algorand expert I’d like to introduce another one of the measures we have been discussing as well as voice a concern.
First, I’d like to agree with Oyster and a number of other community members who believe that governance rewards are too high. While they are indeed high, if we agree to reduce them I believe this needs to be voted on by the community. Also, if they are indeed cut, it’s vital that the community decides where the rewards go. During various twitter spaces since I learned about this proposal, there has been a lot of concern from the community on where these funds may end up.
Next, I think it’s important that we get WAY more done this governance period than we are currently aiming to do. Right now, we are not going to make much change with the measures that are being introduced. Personally, I believe this is the absolute most important governance period we have had thus far. It’s vitally important that we have more measures to vote on so that we can continue to make progress and hopefully bring more members into the Algorand community. We are at a massive crossroads for ALGO.
Currently, DeFi governance rewards are quite passive and this needs to change. We need DeFi protocols to have a way to actively incentivize the actions that are most important to their success so that in turn Algorand DeFi can be more successful. Given that the Aeneas program has been discontinued and there were never clear criteria for who would get rewards I believe we should replace these missing community funds with governance funds. The distribution should be on a merit basis that helps protocols creating the most value to expand their efforts. I propose the following:
-All DeFi protocols (Namely DEX, Lending, Derivatives, and Stablecoin) with at least 500k ALGOs in TVL should be eligible to receive “discretionary ALGO” to distribute to the community via high value actions to their protocols
-Protocols should receive 7500 ALGO per 500k ALGO they had in TVL the previous quarter
-TVL should be calculated based on the mean # of ALGO they had on DeFiLlama
-the most ALGO any protocol should be eligible for is 1.5M/quarter as to not give any one protocol too much of an advantage
This proposal not only should be brought to the community this governance period, but also would be a game-changer for Algorand. During the Aeneas distribution we had the most outside interest in Algorand that we have ever had. We also had the deepest liquidity to trade against. On other chains, the effect of distributing rewards like these can be easily seen. For example, on Osmosis they have 200M in liquidity thanks to their deep incentives to trade against and in Optimism after they introduced incentives their TVL skyrocketed. Given that strong DeFi is a requisite for any strong chain and we have to compete against both TradFi and DeFi returns everywhere, it’s both the responsibility of the foundation to bring this measure to the community.
In conclusion, there are MANY measures that we can and should bring to the community to vote on but discretionary ALGO to reward active DeFi users is vital for the survival of ALGO DeFi. We must act now to ensure that ALGO has a strong call to action to bring in new potential holders and to reward current users who are supporting DeFi so strongly.