Algorand Governance Vault Releases $2.7B In Liquidity To Boost Ecosystem

By Kevin • March 31, 2022 3:35 pm • Comments

Algorand has recently announced the launch of the Algofi Governance Vault which will unlock around $2.7 billion in liquidity into the Algorand blockchain ecosystem.

Users of this vault will be able to participate even more in the Algorand ecosystem by being able to get involved in the governance of the blockchain.

All ALGO holders have to do in order to participate is opt into the vault using their wallets via the process of staking.

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To show a scale of the success of the governance process, the last governance period showed over 37k wallets involved where around 2.8 billion ALGOs were staked.

This made Algorand one of the largest and most successful decentralized governance examples so far within the blockchain world.

Yahoo reports:

The Algofi vault will enable ALGOs committed to governance to be used as collateral for lending and borrowing, thereby unlocking $2.7B of liquidity for the Algorand DeFi ecosystem.

Users can borrow ALGO, STBL, USDC, goBTC, and goETH against this collateral. From there users can trade on the Algofi DEX, as well as Tinyman, Pact, and Humble.

The value proposition for using the Algofi vault is compelling. In the last governance period, Algorand governors earned 11% APY for their participation.

Moreover, the ongoing Aeneas Liquidity Program subsidizes the cost of borrowing assets on Algofi and further incentivizes participation across the Algorand ecosystem.

In recent months, the Aeneas program has contributed to over 250% growth in ecosystem TVL to roughly $185mm.

The foundation expects that the increased liquidity that is provided through the launch of this new vault in increased the total locked value of the Algorand ecosystem.

Algorand sees the participation of the users in deciding the fate of the blockchain and providing decentralized finance services as essential to enabling the future growth of the network and make it competitive against other networks.

As a result, AlgoFi is considered the critical component for that to be achieved as it is considered the DeFi hub of the Algorand network.

The services that AlgoFi provides will closely resemble many services that are provided by traditional banking services such as savings accounts and credit cards.

The decentralized aspect here is the revolutionary change that would disrupt the financial industry and Algorand is at the best position to do that now.

PRNewswire reports:

Algorand is building the technology to power the Future of Finance (FutureFi), the convergence of traditional and decentralized models into a unified system that is inclusive, frictionless, and secure.

Founded by Turing Award-winning cryptographer Silvio Micali, Algorand developed a blockchain infrastructure that offers the interoperability and capacity to handle the volume of transactions needed for defi, financial institutions and governments to smoothly transition into FutureFi.

The technology of choice for more than 500 global organizations, Algorand is enabling the simple creation of next generation financial products, protocols and exchange of value.

As the Algorand DeFi ecosystem continues to grow and accelerate with the launch of this new governance vault which is increased liquidity within the system, investors expect ALGO holders to benefit from the increased usage of the network.

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