Bear market or Crypto-winter whatever you may call is here to stay. It is time to hoard and hodl and it is also time for another governance period on Algorand. Governance period 4 registration has started and it is one of the safest way to earn a good passive APY on your loaded bag while also giving your important vote for the future of the blockchain.

A little information about governance
Earlier, you could earn Algos by simply holding your coins in your wallet. Even if it was not connected to internet or whatever, each algo you held earned you some small yield. That is great for lazy people like us but assets sitting idle in wallet do-not contribute to the blockchains TVL nor in any other way at all. So, the passive rewards were replaced by Governance rewards.

Now, every quarter (a period of 3 months), a governance session takes place. Everyone holding algo can register for the governance and participate in voting session. The voting power is (and will be) the same as number of Algo's you hold ;-) . 

People who commit their algo for governance are called governors. So, the governors vote on the "measures" proposed in voting session. These measures describe the future changes that are to be implemented in the blockchain. So, essentially, people decide what is going to be upgraded / modified in the blockchain. Power to the Players!

So, why would you commit your algorand in governance? 
Because, you can earn a sweet APY. There are rewards (70.5 Million Algos) for each governance session. They are distributed proportionally among all the governors depending on the amount of algo they committed and every holder should have a way to raise their voice regarding the future of the platform in which they are invested.

Point to Remember
The algo never leave your wallet!  They are soft-locked. Say, you have 102 Algo and you decided to commit 100. You will still have 102 algo in your wallet and you are free to transfer them. However, if your wallet balance goes below 100, you will be ineligible for governance. So, you will get no reward for the session.

Similarly, if you commit the algo then you need to cast your vote for every proposed measure. For Period 3, there were 2 measures, each having 2 options and for early governance period, there was only 1 measure for each. If you do-not cast your vote, you will be ineligible for the reward.

Also, keep in mind that you cannot participate in governance if your algos are in centralized exchange like CoinBase, Binance, KuCoin etc. I urge to withdraw your coin and keep them in non-custodian wallet.

Pera Wallet is official Algorand wallet that can be installed on android, iOS. You can also use MyAlgo wallet which is a web-based wallet. Create a wallet and store your private key securely. Transfer your coins to the wallet from CEX and be the owner of Algo instead of IOUs.

Governance Period 4 is now live and registrations are open till 14 July. So, you have ample time to commit Algo to the current governance period. 

There are various ways you can contribute in the Algorand governance. Head over to the official page of Algorand governance. Connect your wallet. Once your wallet is connected, you can commit Algo to the governance. It is recommended to not commit the full amount because even if you make a single transaction, it can cause your wallet balance to be less than the committed amount which will make you ineligible for reward.

Once you have committed your Algos, you need to vote during the voting session. Voting period for current session will be sometime after 14 july. The proposed measure and the options will show up on the same official page (where you committed algo). Connect your wallet (if disconnected) and just vote for the option(s) you think are most benificial for the blockchain. The official pera wallet usually notifies when the voting session starts.

BUT, since the algorand are soft locked, they are essentially sitting idle in the wallet still. AND not contributing to TVL. SO, what's the point of governance? Well, to remedy this, the foundation now allows "Liquid Governance". Here is the official statement from the algorand:

"Liquid Governance is the process of DeFi applications providing governance services on behalf of end-users. In this process, users are able to commit their ALGOs to DeFi Applications which will allow them to participate in governance through their offerings. In return, these DeFi applications allow end-users to participate in DeFi on their platform. Users are offered many types of services, but the purpose is clear, that is to allow users to obtain governance yields on top of any potential DeFi yields."

Basically, you will send your Algo to DeFi platform and then the platform will commit your algos for you. The DeFi platform will provide you a way to vote when the voting session starts. The benifit is that you will be able to utilize your Algo this way. Here's how.

There are 3 major platforms that allow you to participate in governance while also making use of your Algo's:

1. AlgoFi: So, you can send your Algo to the AlgoFi governance vault. You will be issued vAlgo on 1:1 factor. You can use these vAlgo to borrow USDc, STBL, goBTC or even ALGO. Yes!, you can essentially lock your Algo for vAlgo and then borrow Algo (on 75% collateral factor) and then again lock them in vault and again borrow Algo using the vAlgo!. So, you can commit like 100 Algo from initally commiting only like 60 and earn rewards on those 100.
Is it safe? Maybe! the more you borrow and commit and borrow and commit, the more you are betting on the price. If it fluctuates in the wrong side (which it might in the bear market), the results might not be what you hoped for. So, do-not over do it.

2. Folks Finance: Similar to AlgoFi, you can send your algo over to Folks finance for commiting in governance. For each Algo you commit, you will be issued a gAlgo (just like vAlgo of AlgoFi). You can use this gALGO for borrow, lending or participation in DeFi on other platforms too. 

3. Gard: Here, you will be issued GARD for the algo you commit. 1 GARD is always equal to 1 USD. Here, to mint 1 GARD, a user must commit 1.4 USD worth of Algorand. If the collateral value drops below 115%, the system utilizes Dutch auction system to sell the collateral in open market for GARD to remain stable with respect to USD. You are free to use the minted GARD on any DeFi platform.

All of these will allow you to vote through their platform when the voting session start. So, keep them bookmarked if you have committed your algos through them.

Now, you might think that you have no knowledge about blockchain, so what option should you chose while voting. Remember that these votes will define the future for Algorand. The thing is, for each measure proposed, there is an easy to follow explaination provided with it. Most of the time, you will be able to understand and then vote accordingly. You will also see great thread(s) pop-up in Algorand sub-reddits on the Reddit. I recommend skimming through them before voting.

Once you have voted for each measure, all you need is to sit tight and keep your wallet balance above the committed balance. If you have participated through the above platforms, just do-not withdraw till the period ends. You will receive your rewards once the period ends. 

Do let me know if you have any doubt. Tips are appreciated. Happy governance!