But will be replaced with a different program, called the Governance Rewards, pending approval.
ALGO holders are most likely staking their ALGO in ALGO wallet or some other wallet and earning about 6-7% APY in rewards through ALGO's Participation Rewards. The ALGO holders will continue to earn for the rest of 2021. However, in 2022, the Participation Rewards will ease and be replaced with the Governance Rewards.
According to Algorand's governance proposal, ALGO holders will commit their ALGOs for the entire period, which is expected to be quarterly, and must participate in all governance votes to be rewarded through Governance Rewards. Those who stake their ALGOs will be known as Governors. If you do not participate in all votes or withdraw any of the committed ALGOs, you will forfeit any rewards earned during the period. The rewards are expected to be higher than what was provided through the Participation Rewards. The Governance Rewards can be as high as 33.5% APY if at most 1 billion ALGO are committed for the quarter.
If approved, the key notes are:
- Governance Rewards will kick off in Oct. 2021
- Participation Rewards will ease in 2022
- Rewards can be as high as 33.5% APY
Currently, the Algorand Foundation submitted proposal for voting. Once approved, the foundation will begin the process to migrate to where the foundation facilitates, but the Governors decide.