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Governance Rewards: It's a wrap! Reflecting, and what comes next.

March 31, 2025

Governance

Written by: Adriana Belotti

After three and a half years, Algorand’s Governance Rewards program is ending. As a part of this community, you know that this change coincides with the recent launch of Staking Rewards, a new opportunity to collect rewards that is rooted in the network’s technical resilience and designed for users to contribute to the strength and security of Algorand.

It’s an exciting time for the ecosystem and anyone who believes in the power of decentralization of all types. Not only does incentivizing consensus staking increase the technical decentralization of the network, but by shifting Governance to exist as a non-incentivized mechanism for community referendums and nearing the launch of a reimagined xGov program for ecosystem funding, the future of Algorand in all respects is consistently evolving to sit in the hands of the many. 

Before I get into the tactical next steps on Governance, xGovs, and staking, I want to reflect on the Governance Rewards program and the community that participated, helping shape our shared ecosystem over the years.

Reflecting on governance participation

Throughout this journey, governors committed an impressive 33.9 billion Algo, averaging around 2.4 billion per governance period. The strongest quarter saw 3.8 billion Algo committed, highlighting the community’s dedication. Even in the lowest participation quarter, a substantial 1.1 billion Algo was committed, demonstrating consistent support across the board.

The level of community engagement was high, with an average of 25,000 governors participating in each period. This number peaked at almost 50,000 governors, demonstrating the community’s active and expanding involvement.

Governance votes have covered a range of topics through 80 proposed measures, including guiding the development of the xGov framework, strategically reallocating governance rewards to support targeted DeFi and NFT rewards initiatives, and the xGov grants pilot. Additionally, governors have addressed the issue of establishing the staking reward minimum balance of 30,000 Algo, which is crucial for maintaining network integrity both now and in the future.

Since the inception of the governance rewards program, the Foundation distributed a total of 687,500,000 Algo, including 526,782,728 Algo in direct governance rewards, as well as the following allocations voted by governors:

      • DeFi Rewards: 110,904,577 Algo
      • Targeted DeFi Rewards: 43,595,423 Algo
      • xGov pilot grants: 4,267,272 Algo
      • NFT rewards: 1,650,000 Algo
      • NFT community collection: 300,000 Algo

Algorand rewards have evolved with the growth of our ecosystem. What began as straightforward incentives for Algo holders progressed into a system of rewarding governors for their active participation. Now, with staking rewards dedicated to securing the Algorand network, we are all focused on our community's shared priorities: security and sustainability.

What comes next for Governance

Looking forward, there is much to be excited about. The recent introduction of the new Staking Rewards program emphasizes Algorand’s commitment to decentralization — the cornerstone of a secure, open protocol. 

In terms of Governance, expect a dynamic landscape with non-incentivized ad hoc voting sessions akin to community-driven referendums. We’ll experiment with agile, four-week-long governance periods (two weeks for commitment and a two-week voting period). The first period will occur in Q2 with measures to elect the new xGov council. The governance portal will soon be updated with new governor guides and content.

The new xGov platform will fund open-source, retroactive grants to support the Algorand builder community. It should hit testnet in Q2, and we’re excited to share it with you and welcome your feedback.

I hope the new xGov approach will empower our community experts to engage more deeply by reviewing grant proposals and submitting measures for broader community votes later this year.

The first xGov council

Measures voted in governance periods 13 and 14 have defined the initial parameters for creating a new community governance body, the xGov council. Any experienced Algo holder can apply to the new council, which the community will elect. The council will have two main responsibilities:

      • Review xGov grant proposals against the grant program’s terms and conditions.
      • Guide the quality of the grant proposals submitted via the xGov tool. 

There is a lot of work to be done this year to elect the new council, and I invite you to join the conversation on the Algorand forum about the first election and how to apply for it.

Secure the network and collect rewards

Governors of GP14, your participation is more valuable than ever. Consider exploring the new Staking Rewards program and join us in actively securing and shaping the future of the Algorand network. 

Let's go, Algofam!

On April 14th, I’ll celebrate my third "Algoversary" as an Algorand Foundation team member. I am more hopeful than ever that we are on the right path to making Algorand governance a community-led program, and I count on all of you to help make it happen.

 

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