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xGov Program Overview

Table of Contents

What is the xGov Program

The xGov program aims to create and empower an expert layer of governors, known as expert governors or xGovs, to apply their Algorand knowledge and expertise to funding proposals that best serve the Algorand ecosystem. The first iteration of this program will pertain to community grant applications. Overtime, the scope of the xGov program proposals and decisions will expand.

Interested Governors may opt in to the xGov Program during the Governance sign-up phase, which will begin with Governance Period 7 (GP7). Once the governance period is completed, GP7 rewards will be deposited to the xGov Term address, where they are held for twelve months. An xGov’s GP7 rewards will be their voting power to vote on community proposals submitted through the xGov Proposals repository on Github.

Each xGov Term lasts 12 months, running in parallel to the General Governance quarters, for example GP8—GP12 for xGovs that opt in GP7. Assuming Governance Periods lasted for three months.

At the end of their xGov Term, xGovernors who did not perform their duties forfeit their ALGO deposit, which remains in the pool. xGovernors who performed all their governance duties will receive their deposited rewards, plus their share of any forfeited ALGOs in the pool.

Differences Between Governors & Expert Governors

Note you must first be an eligible governor for a period, opted in to be an xGov. Users can be governors and expert governors simultaneously.

  • Period duration. A governance period spans 3 months. An xGov Term spans 12 months.
  • Commit. An xGov’s voting powers comes from a pervious period’s rewards that are deposited into an xGov address.
  • Eligibility. Governors must maintain their commitment for the entire period and vote on all measures. xGovs must use their full voting power at every session.
  • Penalty. If a governor fails to vote or drops below their commitment they would lose their rewards. If an xGov fails to use their full voting power they become disqualified and lose their deposited rewards in their xGov Term address.
  • Decision Type. Governors vote on measures proposed by the Algorand Foundation. xGovs allocate votes to pre-approved community proposals that only pass if they receive enough xGov votes proportional to the proposal’s requested funds.

Algorand Request for Comment (ARC)

The xGov program was created with community participation through the Algorand Request for Comment (ARC) process. Two ARC measures define:

  • How to become an xGov (ARC 33)
  • Criteria for the creation of proposals (ARC 34)

This article will focus on ARC 33.

How to become an xGov

Committing through the Governance Platform

You will follow the same process to commit your Algos and Liquidity Pool tokens as you normally would. During this same process you are now given the option to “Enroll as an xGov”.

Once you select the toggle you will be presented with a message to ensure you understand the role of being an xGov. This entails locking your period’s rewards for a 12 month term where you must vote on xGov proposals for the subsequent 4 3-month long governance periods.

Become an xGov Opt In Message

Understand that by opting in to the Gov program I must remain eligible for this governance period and I authorize my rewards to be paid to and locked in the Gov program for 12 months. I understand that if I forget to fulfill my xGov duties or voluntarily exit the program, I will forfeit any rights to these rewards. If I fulfill my xGov duties I will be eligible to receive my rewards in 12 months.

Algorand Governance Platform xGov Message

Committing through Folks Finance

Users are able to opt in as an xGov through Folks Finance through their Algo Liquid Governance offering. The option is presented to a user when they commit their Algos through the Liquid Governance page. You will still receive gAlgo in a 1:1 ration with your committed Algos and Folks will inform the foundation that your wallet’s rewards should be deposited into your xGov Term address.

Liquid Governance allows Governors to access their governance liquidity that would typically have been soft locked for a governance period.

Committing to governance through Folks Finance comes with the added benefit of receiving additional governance rewards. This is due to the allocation of 20 million Algos for governors participating in governance through the DeFi ecosystem, a measure that was passed in Governance Period 6. Eligible DeFi ecosystem activities include providing liquidity on decentralized exchanges (DEXs) or participating in governance through decentralized applications (dApps). Such as, Folks Finance, a decentralized lending and borrowing protocol. Participating through DeFi would also result in having more votes for xGov proposals.

Folks Finance's xGov Message

Voting as an xGov

The first period xGovs will be able to vote on proposals will be GP8. When you commit to becoming an xGov through the standard platform you will note a message that welcomes the user as an xGovernor.

Come back at the start of the next quarter to connect to the voting tool.

xGovernor Welcome Message- Governance Period 7

More details about the voting tool will be shared during GP7.

A requirement of an xGov is to vote with all the Algos in their deposited Term address.

Voting power in the xGov process is determined by the amount of Algo an eligible participant commits. For every one Algo committed, a participant will be allotted one vote. This ensures that the weight of each vote is directly proportional to the level of investment and commitment to the Algorand ecosystem.

Voting example

As an xGov, you MUST actively participate in the governance process by using all available votes amongst proposals each time a voting period occurs. If you fail to do so, you will be disqualified.

For 100 Algo committed, 100 votes are available:

  • 50 on proposal A
  • 20 on proposal B
  • 30 on proposal C
  • 0 on every other proposal

Read more about the process on the ARC 33 page.

xGov Misconceptions

1. Expert Governors will receive additional Rewards

False. No additional governance rewards have been allocated to the xGov program. One can argue they may receive less rewards as an xGov. xGovs can only receive their governance rewards after 12 months, one cannot compound them in subsequent governance periods, and thus could end up receiving a smaller reward compared to continuous year-long participation in ordinary governance.

Consider if you were to opt in as an xGov for 4 subsequent periods, you would begin to compound your xGov rewards with each subsequent period again at the end of the first xGov Term.

However, xGovs might get additional rewards if other xGovs fail to fulfill their duties, which will result in them forfeiting their rewards to be distributed among the eligible xGovs.

For additional information read Calculating Governance Rewards.

2. xGovs need to be familiar with GitHub

False. While the proposals on which xGovs vote on will be published on Github, it acts as a website host documents following a templated format. You can read through the proposals on GitHub. However, it is encouraged to make comments to the proposals to improve their quality through GitHub.

3. You are unable to opt out

False. If the sign-up period that you opted into is still open, you can opt out. Once the sign-up closes, you can’t opt out and must carry out your duties in order to claim your rewards deposit in the xGov address at the end of the xGov Term.

Folks Finance has added this option to their platform as well.

4. You are either a Gov or an xGov

False. In order to become an xGov a user must first opt in to be an xGov during a Governance sign-up phase, fulfill all Governor duties, to have their rewards deposited into an xGov Term address. In GP8 users can be a Governor and an Expert Governor simultaneously.

Helpful Resources

Governance Platform

xGov Documents

Folks Finance