In the rapidly evolving landscape of blockchain and decentralized finance (DeFi), AVAX xAlgo emerges as a groundbreaking solution, bringing Algorand governance yield to various chains. This blog post explores the key features, advantages, and a step-by-step guide on how to interact with the Algo Liquid Governance – xAlgo on AVAX.
Understanding xAlgo on AVAX
xAlgo is an innovative token designed to bridge Algorand Governance to other chains; BNB and AVAX thus far. Unlike gAlgo, xAlgo offers continuous governance rewards without the need for users to vote or commit each period. The voting power is delegated to Algo Liquid Governors, and locked Algos are automatically recommitted by Folks Finance smart contracts.
What is Avalanche’s AVAX
Avalanche (AVAX) is a cryptocurrency and blockchain platform introduced in 2020. As the native token of the Avalanche blockchain, AVAX facilitates smart contracts, supporting decentralized applications (dApps) and autonomous blockchains. The platform is open-source, allowing public access to its code, and it emphasizes attributes such as speed, versatility, security, and affordability. AVAX operates on a proof-of-stake mechanism, where users stake their tokens to validate transactions and participate in governance. It competes with other blockchain platforms, with notable features including a dynamic governance model for coin creation rate determination and a consensus mechanism that confirms transactions efficiently. AVAX’s transaction processing fees are subject to user governance, and it positions itself as a contender in the blockchain space, with strengths and considerations for potential users and investors.
Advantages of xAlgo
Continuous Governance Rewards: Users can earn Algorand Governance rewards without actively participating in voting, thanks to the automated commitment by Algo Liquid Governors.
Interest-Bearing Structure: The value of xAlgo grows over time due to its interest-bearing nature. This unique feature enhances its appeal as a long-term investment.
Liquidity Provision: Users can provide liquidity to decentralized exchanges (DEXs) and earn trading fees by participating in liquidity pools. Folks Finance’s UI integrates a DEX aggregator, simplifying xAlgo trading directly on the decentralized application (dApp).
Minting Process
Open the Algo Liquid Governance platform.
Select Mint and Burn and connect your Algorand Wallet.
Input the amount of Algo you want to commit to mint xAlgo.
Connect your EVM wallet and select the desired EVM chain.
Click on Mint and sign the transaction.
Click on Redeem to receive the minted xAlgo in your EVM wallet.
Burning Process
Open the Algo Liquid Governance platform.
Connect your EVM wallet and select the EVM chain.
Input the amount of xAlgo you want to burn to redeem the underlying Algo.
Connect your Algorand Wallet and click on Approve.
Click on Burn and sign the transaction.
Click on Redeem to receive the Algos in your Algorand wallet.
xAlgo on Trader Joe
By partnering with Trader Joe, AVAX’s most popular DeFi dApp, xAlgo holders can provide liquidity in the xAlgo-Avax and xAlgo-sAvax pools. Folks Finance has set aside rewards specifically for these pools. Read about the liquidity pools here.
AVAX xAlgo presents a novel approach to cross-chain Algorand governance, offering users continuous rewards and an interest-bearing structure. With its integration into platforms like BNB Smart Chain and Avalanche, xAlgo opens up new possibilities for DeFi enthusiasts. By following the outlined steps, users can seamlessly mint, burn, provide liquidity, ensuring a smooth and rewarding experience in the Algo Liquid Governance ecosystem. While expanding Algorand’s footprint in a multichain future.
