Hi everyone, we would like to share the drafted governance period 13 measures with you for feedback.
The measures preamble summarizes our thinking about how to evolve post-rewards governance, and the three measures pose questions about creating a democratically chosen xGov council, as well as councilor and voter eligibility.
The governance portal will be updated about a week before the voting session opens.
The Future of Algorand Governance
As we prepare to introduce staking rewards and transition away from incentivized governance this quarter, it is time to consider the evolution of community decision-making.
Community governance is an important part of any decentralized blockchain ecosystem, and we see the sunset of governance rewards as an opportunity to improve governance as a whole.
Throughout the governance rewards program, governors voted to direct available funds to specifically targeted programs, such as DeFi rewards, Targeted DeFi rewards, and NFT rewards. This allowed our ecosystem to experiment with different reward mechanisms, encouraging collaboration and healthy competition. Governors also voted to direct rewards to the xGov pilot program, funding over 4M Algo of xGov approved community grants.
2025 and beyond
Node runners and xGovernors will become the core enfranchised groups within the Algorand community, responsible for determining the fate of potential protocol changes as well as increasingly broad operational and economic matters. This raises the question of what happens to âgeneral governance,â where any Algo holder can vote.
We posit that general governance should be retained but, in the future, would function as national referendums do: ad hoc and reserved for matters that (a) broadly impact all Algo holders and (b) are not better resolved by node runners or the xGov decision-making processes. Changing the minimum staking threshold from 30K Algo to some other value may be a good example of something the community should ratify via general governance.
Next year, we will also implement the ability for the community to make protocol improvement proposals via the xGov platform, where xGovs will evaluate these proposalsâ feasibility and upvote them for a general governance vote when appropriate. This mechanism will be introduced in a subsequent update after the new platformâs mainnet launch.
As voted in GP12, the new platform will launch with new eligibility criteria for the xGovs based on consensus participation. Every address that proposed a block during a predetermined monitoring period is eligible to be an xGov and will become an xGov, provided it signals its willingness to participate in the new xGov platform. The initial eligibility process is described here, and we will release further details of this methodology in the coming weeks.
Only addresses directly staking and participating in consensus are eligible. Therefore, addresses holding Algo deposited for Liquid Staking could become xGovs, andâsimilar to how liquid governance functions todayâit would be up to participants in such arrangements to determine how voting power is allocated.
The measures below address open issues within the xGov framework as development work continues.
Measure 1 - Establishing the xGov council
While the Beta Version of the xGov grants funding framework represents a substantial step forward along our responsible decentralization path, several process stages remain manual and reliant on the Algorand Foundationâs involvement.
We believe that an xGov council, elected by the community, could help decrease the Foundationâs influence over time. Moreover, its intrinsic agility will increase the subjective quality and effectiveness of xGov decision-making and operations, filtering out proposals that do not meet the programâs eligibility criteria at inception. The discussions will be public, and the council members will be publicly accountable for the decisions.
You can read more about the proposed council framework in this document, but hereâs a summary:
- Community members with technical backgrounds and strong reputations can run for the council;
- Council members are elected for a fixed term;
- Council members perform required tasks during their terms.
The Algorand Foundation believes that electing representatives will be the right step in forming this council. If this measure passes, an ARC [Algorand Request for Comments] will be created to drive the discussions around the council qualification criteria, selection process, task management, length of term, and accountability criteria.
Measure 1: Should the xGov council be established?
A. Yes
B. No
Measure 2 - xGov Council Member Eligibility
Measure 1 in GP12 voted overwhelmingly that the new xGovs cohort should be composed of block producers.
Looking at the whole ecosystem, we must consider whether any community member who meets the experience criteria should be eligible to run for council and whether or not they are directly participating in consensus(1). A broader candidate base could help maintain openness by introducing perspectives outside the xGov domain.
(1) that a person who holds Liquid Staking Tokens may participate in xGov democracy indirectly (depending on the structure of the LST) but would not themselves be eligible to become an xGov. Option A therefore allows the possibility of a person who is not an xGov being a member of the xGov council.
Measure 2: Who should be eligible to be a council election candidate?
A. Any Algo holder with the required experience
B. xGovs only
Measure 3 - xGov Council Member Eligibility
The xGov council, if approved by the Community in Measure 1, will play a crucial role in xGov functioning and an important role in the Algorand ecosystem overall. It is, therefore, reasonable to ask whether the pool of those who vote on the composition of the council should be broad-based or restricted to xGovs. In the latter case, the natural choice could be represented by the governors participating in the new, rewards-free version of the general governance.
Measure 3: Who should be eligible to vote in the election of xGov council members?
A. Any Algo holder
B. xGovs only