Lowering Goverance rewards to fund communtity voted projects

Hi,

Seeing as there was a quite a bit of debate for the last vote. Here’s an idea that I think would be better solution longer term then if option A was to pass and giving Defi users more rewards from governance.

How about we take a small portion of the total rewards from governance i.e. 1/4 or whatever figure ( can also be adjusted as we grow just a random thought) we can agree on and place that towards funding additional projects that community could get to vote on? I think this would be a great way to increase TVL because:

A. Rewards will be less and defi would have less competition.
B. This also would also bring more projects and usage for our chain. I think this also a great way to get more community activity.
C. From a greedy price point of view. More people using the chain = more demand for Algo.

I did mention this in the previous chat, however with how many comments that were made, it would be hard to read every idea. I was originally waiting for the xGov system to propose this but it seems this is hot a topic currently.

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I don’t believe a portion of rewards should be set aside for anything else other than the staking for governors. If it is important to the Algorand community to set aside money for DeFi then that should be a separate topic and should be funded separately.

Encouraging and supporting the DeFi community is important for the Algorand ecosystem, but I believe each part should be held separate. imo

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I also made this point in the main thread on the Defi proposals for period 3. I can be sympathetic to the economics where currently there isn’t a ton of incentive to use Defi when you have a stable 8% APR in governance. If governance rates were lower it would hopefully drive some better engagement in Defi.

I also made the point of stating why not drop standard rates low, but then allow people to lock up longer (say a year) and as a result then increase the APR.

I would even be ok revisiting the Option A we just shot down, as long as it was a 1-1 vote based on Algo’s held by the Defi institutions. As with most things in life there are likely several potential improvements, hopefully the community and the foundation can come together to find them.

I do think this is worth discussing and trying to refine an idea, so that when the xGov system is in place a lot of the issues/complications could already be worked out.

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