Algorand Governance Periods

The Algorand governance system comprises quarterly governance periods, and governors need to sign up anew to each period. The sign-up window for each governance period opens two weeks before the period itself begins. For the inaugural period, the sign-up window opened on October 1st 2021, and the period itself began on October 15th, 2021.

To participate in this system, a would-be governor needed to:

• Sign-in and commit some of their Algos to the upcoming governance period;
• Participate in all the voting sessions in this period; and
• Claim their governance rewards once the period is over

A would-be governor needed to have an Algorand address that it controls, using some wallet or a custodian.

Governance Period 1 Stats

Here are the stats for the Governance Period 1:

• Number of Algorand Governors: 70,927
• Amount of Algo Committed: 1,886,463,826 ALGO (representing over 30% of all Algo in circulating supply)
• Total Value Locked (TVL) in Governance, using the token price at closure ($1.87): $3.53 Billion USD
• Governance Rewards for Period 1: 60,000,000 Algo
• Governance Rewards Rate for Period 1 (assuming no Governors become underfunded during the period): 3.2%
• Total, Annualized, Reward Rate (including annualized participation rewards rate of 4.85%): 17.6%

Governance Period 2 Insights

Now, let's see how the second period has gone.

• Right away we see that amount of ALGOs committed is up 68%!
• Nearly 50% of the circulating supply was committed into governance!
• The number of governors has actuall gone down from 70K to 68.6K.

Commitments over time

• Looking at the commitments over time, we see that commitments spiked by almost 2x near the end. On Jan 4th, we had about 14K governors commit.
• Even though the number of commitments on the last days were nearly the same, the commitments on the last days were the highest.
  • This could also be because a lot of Governors made adjustments and their final commitments around the end.

• This means that on average each Governor had about 1.5 commitments.

• Since Governors can commit multiple times but only the last commitment takes effect, we see there was a total of 89.4K commit transactions.

Top 10 Commitments

• The top commitment was around 139 Million ALGOs! This is likely an Central Exchange.
• All of the top 10 commitments were 50 Million+ ALGOs.

• If we look at the distribution of the number of commitments, we see that nearly 98% of the governors had < 3 commitments.
• There are a few governors who have committed more than 4 times and then are are some who made 31 and 32 commitments!!

Percentage Committed

As part of the commitment, the Governors need to keep the committed ALGOs in the wallet. If the wallet balance drops below the commitment, then the Governor gets disqualified.

Therefore, looking at the current wallet balances which are still greater than the commitments, we see that on average governors committed 75% of their ALGO balances.

• Looking at the percentage balance committed by wallet balance, we see that with balances less than 1 Million ALGO, the commitments are frequently less than 99%.

• When you look at the commitments for all balances, we see that for balances over 1 Million ALGO, there are very few commitments less than 99%.

Conclusion

1. 68% higher number of ALGOs have been committed for Governance Period 2
2. The number of governors participating are slightly lower than Period 1
3. On average, Governors committed 75% of their ALGO balance.
4. The highest commitment was for 139 Million ALGOs which is likely to be a central exchange.