Algorand Community Governance: Period 5 Review
Governance Period 5:
Period Start: Sep 30, 2022
End of Commitment: Oct 21, 2022
Period End: Dec 31, 2022
Committed Stake: 3.76 Billion Algo
Circulating Supply at Commitment: 7.057 Billion Algo (21/10/22)
Governors: 28,697 wallets
The voting results from the fifth period of AlgorandGovernance confirmed the trend that we have observed across a whole year of decentralized governance, participation grew as a percentage of circulating supply to 53.2%.
Governance Period 5 (GP5) was characterized by having the largest number of measures put to a vote so far in one voting session. The voting measures were also broader in scope, compared to the previous Governance periods.
Measure 1
The first voting measure was designed to confirm and strengthen the trend started with the previous voting measures proposed: moving resources from passive forms of participation (soft staking) to active ones (DeFi participation).
In the previous Governance Period (GP4), 7M ALGO were allocated to governance rewards via DeFi. Measure 1 proposed either a small increase (to 10M), or a more significant increase doubling the amount (to 15M).
Doubling DeFi governance rewards received strong support, with more than 75% of the total stake voting for it. By looking at the table below, we can confirm that the proportions are confirmed in all the categories of Governors (Fish, Dolphin, Whale), classified by their total commitment.
The second and third measures were the first executive allocation of funds to programs outside the scope of general governance rewards distribution.
Measures 2 and 3:
Measure 2 proposed the allocation of funds for a community funding pilot program via the xGov process (under development) and measure 3 proposed an initial allocation for this program, if measure 2 was approved.
The overwhelming majority of the Governors approved the xGov framework, with more than 90% of the stake in favor of it and, while there was a more mixed sentiment about the size of the funds to be devoted to such project, almost 70% voted for the allocation of 2M Algo, compared to 1M Algo.
Also in this case, as we can see from the two tables below, the sentiment on the approval of the xGov framework and its funding allocation was universal across the different categories of Governors.
Measures 4 and 5:
The last two measures proposed the allocation of funds to seed a community-curated NFT Collection to drive NFT ecosystem growth. The first measure asked the community to express their interest in opening a new direction in the fund allocation, with the second related to the fund size allocation.
It was clear by the high level of approval, (> 80%) that Governors recognized the need to grow our ecosystem beyond DeFi, but opinions were more diverse when governors were choosing how much should be allocated to the pilot program.
The result was more tempered when considering the NFT Collection: the measure to create the pilot program was approved, but with a lower amount of Algos, opposing the Foundation on the last measure, as we supported the higher allocation on both measures.
In this case, the winning margin was the narrowest. The community supported the creation of the program, but were still on the fence about the proper size of the funds.
This apparent contrast with the Foundation support should be seen as a genuine evidence of the active debate that led to the results and is the real value-add provided by our Governance framework. As we can see from the tables above, the narrow victory of the lowest option (300k) is confirmed across the different categories of the Governors, with a slighter polarization in the case of the smallest Governors (Fish wallets).
In conclusion, these measures represent a further step in the decentralization of Algorand Governance, in particular the allocation of funds to programs outside of the general governance program, building the path to responsible decentralization.