Decentralizing Algorand Governance

Monday 12th April, 2021

[Update: Friday, 21st May, 2021] - We have published additional detail about the governance program that was recently announced, and its implementation which is available here.

[Update: Thursday, 10th June, 2021] - The Algorand Foundation announced a network-wide referendum on the governance program. Full details are available here.

[Update: Wednesday, 1st September, 2021] - The Algorand Foundation has published a guide to Governance Rewards and the Reward Rates that can be claimed by Algorand's new Community Governors in the first Governance Period. Details available here.

The Algorand Foundation believes in a fully decentralized Algorand ecosystem. Such a decentralized ecosystem, in which everyone can impact monetary, technical, and other policy decisions, best enables the Algorand community to shape the shared future of the Algorand network. 

We have listened to the community and are committed to building a simple, inclusive, and transparent system for community Governance. Titled Decentralizing Algorand Governance, this proposal is based on a combination of Silvio Micali’s original proposal and the governance discussions on the Algorand Governance Forum, the Algorand Governance Channel on Discord, and several other community platforms. In the coming months the Foundation will provide further insight on Algorand’s journey towards Decentralization which will be accompanied by community engagement activities throughout this year. A published update on Decentralizing Algorand Governance with a more detailed exposition is available here.

The proposal outlines the plan to yield to the community the decision making power over the Algorand Ecosystem Resource Pool (AERP), currently entrusted to the Foundation. Decision making will reside with Governors. The Algorand Ecosystem Resource Pool (AERP) includes Participation Rewards, Research and Innovation funds, Algo Grant Program, Research and Social Good Program and Contingent Incentives: for a total of 3.2 Billion Algos. The new decentralized governors will decide on how the AERP resources will be utilised and distributed, to support the long term development of the Algorand network. This will be done via periodic voting, whereby the Foundation will then execute responsibly, for the benefits of the overall ecosystem, based on the Governor's decisions. Governors will be rewarded for their efforts, based on their participation stake in governance.

The Foundation believes that this proposal meets the goal of creating a unique, innovative, and inclusive approach to the governance of public blockchains. In this proposal, all stakeholders are empowered to control the direction of growth of the Algorand ecosystem and the community of Algo token holders. By making substantial commitments to the long term holding of Algo and voting, the Governor community will all benefit at the same rate from their participation in this governance mechanism. Since all accounts will be able to vote in this decision making process, we invite all ecosystem participants to read the proposal carefully, and to become Algorand Governors to participate in forthcoming decisions.

For more detailed information on this innovative program please read the detailed Decentralizing Algorand Governance proposal. The Governance Proposal is available in the following languages;

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Decentralizing Algorand Governance Community All-Hands

We held an updated Community All-Hands on Community Governance on Sept 9th, 2021 which featured our CEO, Sean Lee, Chief Economist, Massimo Morini and Research Fellow at the Foundation, Shai Halevi. The session covered how Governance works, how to become a Governor, the terms and conditions of Governance, what is required to claim Governance Rewards after each Governance period, with approx. 30 mins of Q&A. The session is available on-demand below.

We have complied a list of Governance FAQs which are available for you here.