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Algorand Governance Period 10: Maximizing DeFi Returns

This is my defi strategy for Algorand’s governance period 10 to yield the highest return. Not financial advice, purely for educational purposes. My strategy involves 3 steps:

  1. Mint 1/2 my Algo to gAlgo on Folks Finance
  2. Add Algo and gAlgo to a Tinyman Liquidity Pool and Farm LP tokens
  3. Commit Tinyman LP tokens through the Algorand Governance platform

Calculating Governance Rewards

PeriodStandard Governance APRDeFi Governance APR

Here are the past governance APR rates and as you can see there is potential to earn a significant return accessing the DeFi governance rate. You can read more about how these rates are calculated in this blog post.

Minting gAlgo

I start by accessing Folks Finance’s liquid governance program to receive gAlgo tokens. By committing half my Algo through Folks Finance, I’ll receive gAlgo. This commitment is eligible for DeFi rewards.

If you want to keep your DeFi strategy simple, but still access the DeFi reward rate, minting your whole commitment through Folks Finance is a fantastic solution. You entire commitment will qualify for the higher DeFi return rate.

Don’t forget to redeem your gAlgo for Algo at the end of each Governance period in order to have your Algo particpate in the subsequent period.

Tinyman Farms

Next we will add liquidity to the gAlgo/Algo Tinyman pool. By adding liquidity we will receive Liquidity Pool tokens, another ASA, unique to this pool. Because there is a redeem window at the end of each period, on Folks Finance, that guarantees redemption of 1 gAlgo for 1 Algo, impermanent loss is not a concern.

We can then farm these tokens to earn extra rewards. These additional rewards come from the Target DeFi Reward Pool.

Algorand Governance

GP 10 LP Commitment in Algorand Governance

Since Tinyman LP tokens never leave your wallet you can use them to participate through Algorand’s Governance platform. Just how you would commit Algos for Governance you have the option to commit LP tokens. The Algo equivalent of your LP tokens can be committed to Governance.

This makes sense as you don’t want to punish liquidity providers for using their algos to provide liquidity on DEXs by not allowing them to participate in Governance. That is why it is only the Algo portion of your LP commitment is eligible to participate in Governance.

Now, all your Algos are eligible for the extra rewards, half through Folks Finance and half through governance. While also earning extra rewards by participating in the Tinyman farming pool.

2 thoughts on “Algorand Governance Period 10: Maximizing DeFi Returns”

  1. i farmed all my algo on tinyman , can i still use algo foundation to stake in this goverance period or is it locked or not ?
    thank you so much in advance keep up the good work

    • Great question. You can still use your Tinyman LP tokens through the foundation’s governance platform. You can see me do so at the 8:59 mark in my GP10 Strategy YouTube video.

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