Tinyman in Algorand Governance
The outcome of the Algorand Community Governance: Period 4 Voting Measure 2 is a historical milestone for the DeFi ecosystem of Algorand.
As a result of this vote, some Tinyman poolers are now able to start taking part in governance voting and earn governance rewards with their LP tokens. This marks the beginning of Tinyman users’ contribution to the core Algorand system, the Algorand Community Governance.
We will begin this blog by telling you about how Tinyman poolers can now be a part of the Algorand’s Governance voting mechanism and earn extra rewards in return for their participation. Later, we’ll be focusing on the significance of this change for Tinyman.
Participate in the Algorand Governance
It is absolutely vital to understand that our users have to take the outlined steps below, commit to governance, and carry out the terms of eligibility until the end of the voting cycle. That’s why we take it upon ourselves to relay the information as clearly as possible and lead our users through the process.
Here is the step-by-step guide on how to take part in Algorand Community Governance with Tinyman LP tokens.
Algorand Governance Guide for LP holders
1- Not all LP tokens are eligible for casting your governance vote. Tinyman will always make sure to share eligible LP tokens in its lists. Eligible LPs will also carry a governance eligibility badge -GOV badge- in the Tinyman’s interface.
Here are the LP tokens that are eligible for the next cycle: Algorand Community Governance Period 5.
As a first step, make sure you are holding an eligible LP token.
2- LP token holders have to GO TO the Algorand Governance portal website and participate in the governance period by COMMITTING their LP tokens. The portal will have the option to recognize your LP tokens next to the Algos for the next governance voting period.
The portal will tell you how much equivalent ALGO would your commitments be worth after you commit.
3- CAST your vote. Algorand Community Governance eligibility is fully gained once a vote is cast.
4- CARRYING OUT your eligibility to term is the last step. Algorand’s rules dictate that any LP Token that has gained eligibility has to maintain the committed amount all throughout the governance period.
If you followed the previous steps, now we’d like to draw your attention to some extra details that might help you further.
- Tinyman LP token involvement in the governance is still pretty new, so we’re also learning more things every day. Even Algorand Foundation has said that there might be further changes. We’re dedicated to keeping up and filling you in with the most recent information. That is why we have opened a new discussion category in Discord committed to the government where we’ll be tackling all related issues. Head over to our Discord to check that out.
- If you want to start adding liquidity to Tinyman to earn from governance, make sure you check the list on our “For Defi Governers” page. The list will be constantly updated for each governance period.
- We’ve noticed that there is a minimum amount of commitment, that is 1 LP token at the moment (which can be changed by the Foundation). 1 LP Token is worth different amounts of ALGO for every LP token, and changing constantly with the market, so remember to check the LP Token amounts in your wallets too.
- Committing the right amount of LP tokens is crucial. You can choose to commit all your LP tokens by pressing the MAX button in the governance interface. But beware that any transaction you do with those LP tokens (described in the 4th step above) can break your commitment, rendering you ineligible for Algorand Governance. Therefore, it is crucial to make an informed decision about how many Tinyman LP tokens you want to commit and enter the amount that you plan to hold until the end of the governance period.
- You can change your commitment amount/type. Your commitment is not final until the beginning of each governance cycle, so feel free to go back and re-configure.
- Your committed LPs will be worth a certain amount of ALGOs for governance. This amount is;
higher than the ALGO amount the LP tokens hold (ideally they hold 50% of value in ALGOs),
lower than the value LP tokens are worth.
The sweet spot is determined by a “ratio” the Foundation shares before each period. The best way to understand how much “ALGO worth of governance participation” your LP tokens would make, is to go to the interface and go through with the governance commitment. (Don’t worry, you can change the commitment amount/type afterward) We will also share these ratios in our socials, and help you with the calculation of your LP tokens’ Algo-equivalent commitment amounts.
- Once the governance period starts, NOT MOVING LP tokens is key. So, DO NOT:
— Remove your LP tokens
— Transfer your LP tokens to another wallet
— Stake your LP tokens to other programs that REMOVE your tokens from your wallet.
(Important Note: Tinyman farming is SAFE. You can stake and unstake from Tinyman without affecting your governance commitment. For other farming or yield earning programs, you should talk to those protocols to understand their effects on your governance commitment)
- Algorand Foundation communicated that all decisions, numbers, ratios etc. can be changed. So, any reward prospect or commitment should not be seen as final until the period ends and rewards are received. Tinyman team is in talks with the Foundation and we’ll do our best to communicate any change in a timely manner.
Tinyman in the Algorand Governance
It is very exciting to finally be a part of Algorand Community Governance. This measure not only ensures extra rewards for Tinyman users but also gives us the opportunity to be a part of Algorand’s decision-making structure, be involved, and do our part for Algorand’s future.
92% of Tinyman’s current TVL is included in the next Algorand Community Governance, which means that a significant majority of Tinyman liquidity providers will get the chance to participate. Tinyman is riveted to begin leading this new stage with so many of its friends. We feel that this is a very positive step forward that can boost Tinyman and Algorand DeFi ecosystem, grow us in user numbers and TVL, and better yet, spread the word about our ecosystem here in Algorand to other crypto lovers across the industry.
You can help spread the word too, join us on our socials and invite other blockchain enthusiasts around you!