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xAlgo: Folks Finance Expanding Algorand Governance Cross-Chain

xALGO: Folks Finance Expanding Algorand Governance Cross-Chain

Folks Finance is breaking new ground with the launch of xAlgo, a revolutionary cross-chain solution developed by Folks Finance. Leveraging Wormhole technology, xAlgo enables Algo holders to seamlessly bridge their assets from the Algorand network to the BNB Chain, granting them access to Algorand governance rewards while maintaining liquidity within a different ecosystem. This post explores the exciting features and benefits of xAlgo, highlighting its potential to enhance participation, liquidity, and growth in the Algorand and BNB ecosystems.

This announcement is fairly new and additional video tutorials, documentation, and a DEX partnership will be announced at the launch of xAlgo.


  1. Greater Participation in Algorand Governance: By introducing xAlgo, Algorand Governance aims to promote wider participation within its governance framework. Algo holders will be able to mint xAlgo on Folks Finance’s platform by depositing Algo into a smart contract. This process allows them to actively engage in governance decisions while benefiting from the yield generated by Algorand governance.
  2. Two-Way Bridging: Connecting BNB Chain and Algorand. With xAlgo, a seamless two-way bridge is established between the BNB Chain and Algorand. This connection opens up exciting opportunities for users on both networks. It enables BNB and Binance users to explore Algorand and lock their Algo holdings in governance, fostering cross-chain collaboration and expanding the Algorand community.
  3. Increasing Liquidity in DeFi Ecosystems: xAlgo plays a vital role in boosting liquidity within the decentralized finance (DeFi) ecosystems of both Algorand and BNB Chain. By bridging liquidity to BNB Chain, xAlgo provides users with additional avenues to participate in yield farming and liquidity provision, stimulating the growth and vibrancy of the Algorand DeFi space.
  4. Continuous-Commitment: Streamlining Governance Tasks. xAlgo brings a valuable feature known as continuous-commitment. This feature eliminates the need for quarterly governance votes, making it more convenient for Algorand governance participants. By simplifying the governance process, xAlgo allows governors to focus on making impactful decisions and contributing to the development of the Algorand ecosystem.

How Does xAlgo Work?

Minting xAlgo

Algo holders can mint xAlgo by depositing their Algo into the Folks Finance platform’s smart contract. Utilizing Wormhole technology, xAlgo is automatically bridged to the BNB Chain. When xAlgo is redeemed, the deposited Algo, along with the yield generated, is returned to the user.

Interest-Bearing Asset

xAlgo is designed as an interest-bearing asset, meaning that it accrues rewards from Algorand governance. Initially minted at a 1:1 ratio to Algo, xAlgo becomes increasingly valuable with each governance period. For example, a user minting 100 xAlgo at the beginning of a governance period may be able to burn those tokens for 105 Algo at the end of the period, reflecting the rewards earned, at a 20% APY governance reward rate. This continuous value appreciation makes xAlgo a compelling asset for Algo holders seeking long-term growth potential.

Voting and xAlgo vs. gAlgo

While technical limitations currently prevent xAlgo minters from directly voting in Algorand Governance, Folks Finance recognizes the importance of inclusive voting mechanisms. They have initiated discussions on the Folks Forum to gather insights and ideas on how to best address this challenge. Based on community input, Folks Finance will draft proposals for Liquid Governors to vote upon. This collaborative approach ensures that xAlgo minters can contribute to governance decisions effectively.

It’s essential to note the difference between xAlgo and gAlgo, both derived from Algo committed to governance. Unlike xAlgo, gAlgo is not interest-bearing. When minting gAlgo, the liquidity remains on Algorand, and the governance yield is distributed to the wallet used for minting at the end of a governance period, read more about gAlgo redemption. Conversely, xAlgo’s liquidity is bridged to the BNB Chain, and the yield is distributed upon redemption of xAlgo. xAlgo holders can accrue rewards over longer periods without the need for recurring commitment.

Liquidity Provision Rewards

To foster the adoption of xAlgo in the BNB ecosystem, Folks Finance will collaborate with a DEX (Decentralized Exchange) partner (to be revealed soon). By providing liquidity to the xAlgo-BNB pool, users can earn additional farming rewards in xAlgo. This incentivizes users to contribute to the liquidity pool, ensuring a robust and dynamic ecosystem for xAlgo.

xAlgo represents a groundbreaking development for Algorand Governance, expanding its horizons and reaching new markets. By harnessing the power of cross-chain compatibility, xAlgo connects Algorand and BNB Chain, offering Algo holders exciting opportunities for yield generation and liquidity provision. The introduction of xAlgo is a significant milestone in Algorand’s journey towards broader adoption and increased accessibility, as it allows users from different chains to participate in the growth and development of the Algorand ecosystem. The launch of xAlgo promises to ignite a new era of activity and potential in Algorand DeFi.

Read more about this development on Folks Finance’s Medium article Expanding Governance Cross-Chain with xALGO.