Algorand governance upgrade, a new generation of financial compliance public chain is ready to go

Recently, the Algorand  Foundation plans to open a new round of community voting to modify the long-standing participation reward plan. The incentive model of the adjusted system will gradually transition from the original participation rewards to governance rewards. In order to encourage users to participate more in governance, decentralize the various functions originally controlled by the foundation. In order to achieve the purpose of establishing a simpler and more inclusive community governance system and prevent any group from exerting too much influence on the project.

 

According to the Algorand document, the increased governance rewards after the change require users to participate more actively in the regular voting of the ecology and take responsibility for More governance responsibilities. The period for users to participate in governance is three months, and rewards will be distributed to governance wallets that participate in voting and maintain the amount of Algo they vote at the end of each quarter. If the governor misses the vote, or fails to maintain the amount of Algo they voted, they will lose their rewards for this quarter.

 

Once the resolution is passed, the Algorand project will enter a transitional state beginning July 14th of this year. At present, the total Algorand Ecological Resource Pool (AERP) has reached 3.2 billion Algo, of which 2 billion will be locked immediately after the resolution is passed. After the lock, the foundation will not be able to continue to control this part of the funds. The remaining approximately 1.2 billion Algos will continue to support previously ongoing activities. The above functions will be implemented off-chain at the initial stage. After the complete system is ready next year, all funds will be transferred to the corresponding smart contract control.

 

During the transition period in the second half of this year, users can still enjoy the old participation rewards, and at the same time participate in the new Governance plan, enjoy the rewards provided by the governance plan. But by early next year, participation rewards will be abolished. The Algorand ecosystem will fully switch to an era dominated by governance rewards.

 

The new governance proposal can reflect Algorand’s long-term development strategy, and users are the most important thing on this network . While many public chains hope to gain attention in the bull market by relying on relatively centralized operations, Algorand is more committed to a decentralized development path.

 

AERP is controlled by smart contracts, and the governor votes to unlock it. This is also the development model of DAO, as the next step of DeFi development One step further, the development of DAO has also begun to attract attention, and Algorand has been able to realize DAO through smart contracts.

 

Compared to the homogeneous ecology of other public chains, Algorand will rely on smart contracts to achieve decentralized on-chain governance , to build a security infrastructure for the ecology and applications on the chain, reviewing the ecological advantages of Algorand, as a financial public chain, Algorand is becoming a new choice for C-end and B-end applications.

 

Representative of the new public chain

 

Although Ethereum increased the gas limit of a single block from 12 million to 15 million to ease transaction congestion. However, many analysts believe that such small improvements will not help the real needs. A large number of industry applications have specific requirements for transaction speed, transaction cost and compliance, and it is still difficult to find a feasible solution for real deployment on the chain.

 

The future of the blockchain must not be a single-chain world. This judgment has gradually become the consensus of the industry in recent years. And which public chains can undertake the overflow of the Ethereum ecology, and which ones can achieve their own breakthroughs in specific segments are questions that the industry needs to answer urgently.

 

Ethereum’s low performance and high fees have already raised its user threshold, and DeFi applications are bound to attract new flow. At present, new public chains such as BSC and Solana are gradually developing into shadow systems of the Ethereum ecosystem, providing users with high-speed and low-cost defi services, which is the main reason why these platforms were quickly discovered. In other segments, some emerging public chains are also ready to meet the needs of specific industries. Algorand has gradually become one of the representatives of the new public chain relying on the strategy of financial direction and simultaneous operation of B-side and C-side applications.

 

As a new type of public chain system, Algorand adopts an innovative PPOS consensus algorithm, which takes into account high performance and decentralization It solves the famous impossible triangle problem in the industry. Compared with other public chains, Algorand natively takes into account the needs of the traditional financial industry and can provide users with more than 1,000 TPS. At the same time, the Algorand protocol is designed with very weak security assumptions, taking into account more attack possibilities (such as DDoS attacks on nodes at the network level), providing stronger security guarantees for enterprise-level applications.

 

Algorand restores support for KYC functions commonly used in the financial industry. Using smart contracts, users can complete transactions with financial institutions without exposing their privacy. While the degree of compliance is greatly improved, it can also improve the interoperability between users and financial products. This is difficult for other public chains without access permission.

 

For the financial industry, risk control is an essential part of all financial assets and transactions. Algorand's logical account based on the TEAL programming language already supports the decoupling of asset state storage and circulation logic, which will also meet the asset management needs of more financial companies.

 

Compliant public chain meets the needs of traditional financial on-chain

 

< p line="XuqQ">Compared with native encryption applications, traditional financial companies have obviously higher requirements for compliance. In this field, the Algorand public chain is gradually becoming a new infrastructure for the traditional financial industry to enter the blockchain world by virtue of the financial support in the original design.

 

Currently, well-known stablecoin issuers Tether and Circle have issued stablecoins on Algorand, and users have already You can use USDT and USDC to support your own financial activities on the Algorand chain.

 

Last year, Algorand partnered with SFB Technologies to develop the SOV, the sovereign currency of the Marshall Islands. This is the first central bank currency project based on the existing blockchain development, and the project chose the Algorand public chain first, which also proves the recognition of Algorand's technical capabilities in the traditional financial field.

 

The same as the SEC-compliant profit-sharing token Republic Note issued in March last year, it also chose to issue on Algorand . Since token issuance will only be for Reg D for qualified investors and Reg A+ for non-qualified investors, Algorand's inherent compliance attributes greatly simplify the project's issuance process.

 

In addition, Algorand has joined the "BSN Open Alliance Chain Project" in September 2020. BSN is the world's first A global infrastructure network independently innovated by China and controlled by China.

 

At the same time, Algorand has also accelerated the unlocking speed of tokens for early investors. With the double rewards starting in the second half of the year, It is expected that more users will invest their own tokens in the governance plan, on the one hand, it can reduce the number of tokens in circulation in the market, on the other hand, it is expected to further increase the price stability of ALGO tokens in the long run .

 

According to the core purpose of this governance proposal, we can see that although the Algorand project has been online for nearly two years, the Relying on its strong engineering strength, the project team has not stopped improving the protocol.

 

Over 1,000 transactions per second, finality of instant transactions, lower transaction costs, and this With the improvement of governance efficiency brought about by the upgrade, Algorand may become the preferred platform for future financial enterprises to go to the chain, and become the connecting hub of the old and new financial worlds.

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