As long standing Algorand community supporter, we are getting concerned with the upcoming Governance Measures, particularly Measure 1 which is concerning for several reasons:
How could the Foundation arbitrarily decide to reduce Governance Rewards by 25M+/quarter, without explicitly explaining to the community where the funds are redirected to be used for? The increased incentive for other activities (DeFi, NFT etc) are tiny compared to the reduction of the standard governance rewards, we view this as a way for the Foundation to cut overall community incentive without good explanation.
Even if the Foundation wants to incentivise other activities like DeFi or running nodes, why would the funds have to come from the funds/ALGO already committed/allocated to Governance Rewards? As far as we can tell, Foundation still have 1B+ Algo in its treasury, and why wouldn’t you allocate additional resource from your treasury for other initiatives? How are you planning to use the 1B+ Algo for then? Please remember: Foundation’s goal is to fully decentralize and disappear after 2030, but not to run a for-profit organization like venture funds. The lack of budget planning and communication to the community is extremely concerning.
All this being said, if you really wanted to push this Measure out, you should at least include an option for the community to vote “status quo”. In our opinion, a “status quo” vote option should always be available, otherwise this gives the Foundation the super power to change any existing measurement as they see fit.
We are passionate about the Algorand technology and ecosystem, but we are extremely concerned about how some of these governance voting measurement are being proposed. The example of proposed Measure 1, if passes, will slash Algorand’s “staking yield” by almost half - making it the lowest yielding L1 token out there. Given the lack of liquidity and overall crypto market sentiment, we are extremely concerned this might trigger a sell-off on Algo.
We urge you to reconsider the proposal before it’s too late, and to provide further clarity on the Foundation’s plan for increasing (rather than decreasing) overall community incentives.