Algorand Community Governance Scheduled for Oct. 1 2021.

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Algorand Community Governance Scheduled for Oct. 1 2021.

Community Governance:

Q1: What is Community Governance?

Community Governance represents the governance program that marks the shift from the early days of the Algorand network to a more mature phase in which the community takes charge of its own destiny and rewards are distributed in return for verifiable engagement in the program.

Q2: Why is the Community Governance Program important?

The Community Governance program is important since it gives decision power about the future of Algorand to the Algorand community. It introduces a form of governance that is simultaneously decentralized, secure and efficient, like our consensus protocol.

Q3: What is a Governor?

Governors are Algo holders who commit a stake for a 3 month governance period which will enable Governor voting on some of the most important decisions regarding ecosystem development.

Q4: What is the role of Governors?

Governors will be responsible for major economic and policy decisions. This will be done via periodic voting, whereby Algorand Foundation will then execute responsibly, for the benefits of the overall ecosystem, based on the Governor’s decisions.

Q5: Who can participate in Community Governance?

All Algo holders are invited to become Governors and vote on important decisions regarding ecosystem development. Their votes will depend on the amount of Algos they will commit to governance for a 3 month period.

Q6: Is there a minimum/maximum number of governors?

There is no minimum/maximum number of governors. This is an open program and anyone willing to commit their Algos and vote can become governors.

Q7: Will Algorand Foundation itself vote in Community Governance?

The Foundation will not vote or earn rewards in Community Governance. Its only role will be to set up the voting options and indicate its favorite option. Governors that want to do so will be allowed to opt to endorse automatically the Foundation’s preferred choice, but no Algo controlled by the foundation will be committed to governance.

Q8: When can I participate in Community Governance?

The program will commence in Q4 2021 (details on the exact date to come) and will feature quarterly entry points, allowing participants to join the program on a voluntary basis.

Q9: When do I have to sign up for the program?

The program will commence in Q4 2021. We expect you to be able to sign up in September just before the inception period. We will communicate any updates on when you can join the program in due course.

Q10: How can I participate in Community Governance?

The Governors will have to commit an amount of Algos for a minimum of 3 months (length of a governing period). Technical details on how to participate will be made available in advance.

Q11: Do I need to provide any identification (KYC) to participate in Community Governance?

No, there are no requirements to do so.

Q12: What wallet(s) do I need to use to participate in Community Governance?

During the inception period of the program, any wallet that can hold Algos can be used to participate in the governance program. As the program evolves Governors may need to use wallets with smart-contract support. Algorand Foundation will work with our partners to provide easy access to the governance program.

Q13: I have an account with an exchange. Can I participate in Community Governance and get Governance rewards?

This will depend on the exchange. Please contact your exchange directly.

Q14: How was the Community Governance proposal formulated?

The Community Governance proposal was inspired by Silvio Micali’s original governance proposal and then finalized by a number of governance discussions facilitated by the Foundation, such as the Algorand Governance Forum, the Algorand Governance Channel on Discord, and several other community engagements.

Q15: Will there be a platform where we can closely evaluate the list of tasks before we vote?

The Foundation will submit the list of tasks to the Governors every quarter, providing the Governors in advance with all the available background needed to allow informed decision-making by the Governors. We will provide further information in due course.

Q16: Has the Dutch auction format been dropped? It looks like the return will simply be determined by the number of participants in each cohort.

The Dutch auction idea has not been dropped but it is a more complex mechanism than the mechanism chosen for Governance. All Governors who commit will all receive the same rate of rewards which will be known after each governance period.

Q17: Will the identity of any governors be disclosed and if so will this depend on the number of Algos that they have staked?

We encourage large stakeholders to disclose and publicly announce what they will be committing but this is not a requirement.

Q18: Is it required or recommended that a person have any specific knowledge or skills to serve as a Governor? I would like to participate, but I'm concerned that issues I would be asked to vote upon will be way over my head.

The type of topics will be wide ranging and we are not looking for all Governors to be familiar with all topics. This is why the delegation of votes is beneficial especially on topics where you are not as familiar.

Q19: I have Exodus tokens, will I be able to vote or do I have to move my Algo?

If you have an Algorand wallet that you control exclusively (Algorand address) you will be able to participate in voting, at least in the inception period. Final plans are not finalised and will be shared in due course.

Q20: Can the terms of the governance (e.g. size of AERP) be altered, at a later date, through a vote of the governors?

Yes, this is a possibility. Any reforms will be the role of Governors to vote on.

Participation Rewards:

Q21: Is Community Governance rewards replacing Participation Rewards?

The Governance program will start in Q4 and will distribute rewards to Governors in addition to participation rewards. Participants to the Governance program will therefore see their total rewards grow significantly above the then fixed level of participation rewards. In 2022, participation rewards will be phased out, to be completely replaced by increasing Governance Rewards.

Q22: What is the exact date, current Participation rewards will finish in 2022?

The exact date has not been confirmed yet. We will share this information when available.

Governance Rewards:

Q23: What are the requirements to be eligible for Governance Rewards?

Governors MUST maintain their committed Algo balance throughout each full 3-month period. In other words, Governors cannot move the amount of Algo committed in the designated wallet for the entire period. In addition, they must participate in all the votes during that period.

Q24: In order to commit ALGOs as a Governor does one simply need to maintain a certain balance in the Algo Wallet? What is the minimum amount of ALGO to be delegated as a Governor?

In terms of a minimum commitment, 1 committed Algo equals 1 vote. Regarding the balance, you need to maintain the balance amount of Algo you committed to the governance period. For example, if you commit 100 Algo to Governance you must maintain at least 100 Algo throughout the Governance period.

Q25: How are Community Governance Rewards managed/distributed each governance period?

Governing wallets that participated in the vote and maintained their committed number of Algos for the full governance period will be able to claim their rewards at the end of the relevant governance period. Governors who miss a vote, or fail to maintain their committed number of Algos during any point of time in the relevant governance period, will not be entitled to their rewards for that governance period.

Q26: At the end of the Governance period can I spend/use the rewards earned?

Yes, earned rewards can be spent/used as you wish.

Q27: Are the rewards you receive at the end of each governance quarter based on the Algos you commit at the start of the quarter or is it subject to change if you add more to your commitment throughout the quarter? Which leads to the question, can you add to your commitment after your initial commitment?

Your rewards will be based on what you commit at the beginning of each Governance period. What you commit at the beginning is the measure of your commitment to Governance. There is no issue if you commit additional Algos to the same wallet to be used for future Governance.

Q28: Will rolling over be automatically done for Governors from the previous period?

No. Governors will have to explicitly commit to becoming Governors for each Governance period.

Q18: Do I need to recommit anew for every Governance period?


Q29: Will I require a new wallet address to participate in Governance?

Governors can use their existing wallet address to participate in governance, or they can establish a new wallet address specifically for this purpose. It may be the easiest option to create a wallet specifically to manage your commitment to Governance.

Q30: How can I declare my account to be the participating account?

Details on how to participate will be made available soon.

Q31: What is the commitment period which is required to earn Community Governance Rewards?

Governors serve for a 3-month governance period at a time, committing a fixed amount of Algos for this said period. Governors must ensure they participate in all votes and maintain their committed number of Algos for the entire governance period in order to claim their rewards at the end of the governance period.

Q32: Why do I need to commit Algos to participate?

Governors have to commit Algos to show they are willing to put skin in the game and align their incentives to those of the community. Additionally, Algorand is a proof-of-stake blockchain and the governance voting power will be proportional to the committed stake in governance. (1 Committed Algo = 1 Vote)

Q33: What is the Governance Rewards Rate for each governance period?

The rewards rate will vary per period. This will be determined by the number of committed Algos, and computed as the ratio of the total Algos being committed against the total reward pool for that period, which for now is the amount budgeted for Rewards in the Long Term Algo Dynamics page. An overview of examples on how reward rates would be calculated is available in the proposal document.

Q34: During the governance period, are the Algos committed by the Governors locked?

No. However, Governors who fail to maintain the required balance '"committed Algos" at any point of time during the governance period will not be entitled to claim their rewards.

Q35: When can I join the Community Governance rewards program?

You can join at the inception period which will begin in Q4 2021.

Q36: Will Algorand Foundation receive Governance Rewards?

As the Foundation will not participate as Governors therefore the foundation will not earn/claim governance rewards.

Q37: If you grant a proxy vote to the Foundation, does that count as a participatory vote for rewards? Can you grant a proxy to someone other than the Foundation?

The Foundation will not be participating as one of the Governors but will facilitate voting. You can delegate your vote to the Algorand Foundation which will count as a vote on your behalf. You will be able to grant a proxy vote to someone other than the Foundation once the program matures. The expectation at launch would be initially a Governor if they so choose could delegate their vote to the Foundation.

Q38: Where would governance rewards come from when the 10b Algos have been distributed? Fees?

We have planned rewards until 2029. It is too soon to share how rewards will be distributed once the minted supply of 10billion Algo have been distributed.

Q39: Are there any thoughts regarding one day giving rewards to the people/entities running the Algorand Mainnet nodes?

We are continuously evolving our plans on how to reward/incentivize running nodes but no decisions have been made as yet.

Q40: At the end of a quarter, can I choose to not receive the rewards yet? For tax purposes, the US considers staking rewards received as taxable income when they’re received, so if I wanted could I Ieave my rewards in a pool to accumulate until I chose to receive them at a later date?

Yes it is possible to delay. Rewards will sit in an escrow account following each governance period and rewards must be claimed by the Governors. Just don’t forget to claim your rewards!


Q41: Are there any penalties if I withdraw committed Algo from my governing account before the end of the governance period?

Governors who withdraw Algo causing the number of Algo to drop below the committed amount of Algo at any point of time of the relevant governance period will not be entitled to claim the rewards of that governance period.

Q42: Will the account be eligible for rewards if I deposit more Algos into the participating account during the governing period?

Yes, it will. Please see Question 23 in relation to participation requirements. Algos deposited after the beginning of a governing period, however, will not provide additional votes nor any additional rewards.


Q43: What is the Community Governance referendum?

The foundation will hold a formal referendum on the governance proposal, using the protocol upgrade voting mechanism on the Algorand network. Any consensus-participating Algorand address can vote in the referendum, simply by upgrading the Algorand software to a new version that we will provide, see our recent announcement here.

Q44: Will the upgrade software also include new functionality, in addition to serving as a referendum on the governance program?

Yes, we expect the upgrade software to also include some new functionality.

Q45: What will happen to this new functionality if the referendum is rejected?

If the referendum is rejected, we will supply a different upgraded software that will provide the new features but will not carry the semantics of a YES vote in the referendum. The Foundation will revisit the governance proposal with the community to understand concerns and re-work the proposal in light of that feedback.

Q46: What will happen to participation rewards if the referendum is rejected?

As stated in our announcement, participation rewards will remain at their current level through the end of 2021, and will be phased out in 2022. This will happen whether or not the governance referendum is passed.


Q47: Can the community suggest proposals that would be voted on by Governors?

Yes, the community will be able to bring proposals to a vote by the Governors. The details of the mechanism for doing so will be made available in the future.

If you have a question which we do not feature on our FAQs please submit through the form below.

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