Algorand’s First Governance Period Sees Nearly 2 Billion ALGO Locked
Algorand, the smart contract layer 1 launched in 2019, marked a new era in their development today with the successful closing of their first governance period window. Potential ‘Governors’ had two weeks to secure their commitment in the form of Algo, to earn a yield and vote on protocol measures.
The results are now in. 1,886,461,707.272 Algo was locked into governance with an APY of 17.6%. The period will last until December 31st, and Governors will earn that juicy yield in Algo so long as they don’t remove their tokens and don’t miss a vote. Algorand allows Governors to remove their tokens at any time, but by doing so, they will forfeit the rewards.
The first vote will begin on Oct 31st, and will actually be centered around proposing harsher penalties for withdrawing your Algo from governance during the period, as currently, the only penalty is losing the 17.6% yield.
Algorand has a supply of 10 billion tokens with 6.14 distributed so far, or ~60%, meaning that in Q4 there will be, give or take, ~31% of the total supply locked in governance, which will be a welcomed signed for holders in terms of getting supply locked up and off exchanges.
Congratulations to @AlgoFoundation @Algorand @silviomicali @stevekokinos @wsford @KeliCallaghan @paulriegle and all the folks out of the public eye that make #Algorand #awesome Nearby 1/3 of all total supply is staked! That’s serious #belief $algo #AlgoAutumn
— Maldi Kellici (@maldikellici) October 14, 2021
Speaking of exchanges, Coinbase basically ran out of Algorand in their verified wallets which they hold Algo for the exchange as Algo holders ran for the exits to withdraw their coins to deposit into governance. At one point, just minutes before the window closed to commit to governance, they actually had a balance of only 112 Algo.
Users were reporting that withdraws were taking over 8 hours or longer. Algorand transactions usually clear in 4,5 seconds, so many were frightened they would not be able to join the governance period in time.
Less than 120 Algo on CoinBase wallet 1 balance – impact of governance?
Have not seen an exchange balance this low on CoinBase pic.twitter.com/XgBHW0heUG
— Daren (@Bmorecmore) October 14, 2021
Coinbase eventually solved the issue and provided liquidity just one hour before governance closed, and holders were able to make it just in time for governance. It is just a reminder that it is always wise to take your crypto off exchanges for unforeseen reasons like this.
The move to governance and decentralization is a big move for the growing layer 1, which has had smart contracts since 2019 but waited until now to roll out a governance model.
According to a press release regarding how the voting will be conducted to inform holders and create smart voting, the Algorand Foundation said: “in order to provide comprehensive context, the Algorand Foundation will provide information on the progress of Ecosystem development and further information on the measure to be voted on. This will enable governors to be as informed as possible in preparation for voting.”
The foundation also mentioned how important the governance model is: “The introduction of decentralized, community governance is a significant step in the maturation of the Algorand ecosystem.” A governance model with staking rewards is intrinsic to the nature of proof-of-stake.
It also displays that with proper economic incentives at play, meaning stake, it can be a double whammy in terms of being lucrative for holders as vast swaths of supply are stripped from the market, increasing demand. With Algorand’s AVM fully complete, billions of dollars in their war chest, and now a community governance model fully shipped, Algorand may have a Q4 with fireworks.
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Text source: CryptosRus
