Algorand governance period 2 vs 1: correcting period 1's governor count, and mysterious whale solved


Two days ago I published "Algorand governance period 2 vs 1: more rewards, fewer governors, and mysterious whales",  where I stated Algorand's first governance period started with 3.75 billion committed Algos. This statement is incorrect -- the first governance period started with about 1.9 billion committed Algos, not 3.75 billion. 

This post explains how I arrived at the erroneous committed Algo count, how the issue was identified, and how it was corrected. 

Identifying the issue

In my first post I expressed skepticism over a large step decrease in period 1's committed Algos by several billion. I traced the large step decrease to one governor who appeared to initially commit 1.4 billion Algos -- over 35 percent of my calculation for period 1's total commitment at the time -- before becoming ineligible. 

I was perplexed by this monster Algo commitment and did some digging. I extracted the governor's period 1 transaction from the period 1 governance database I previously queried via the Algorand Foundation's API, and used algoexplorer.io to interrogate the details. Sure enough, a transaction to commit 1.37 billion Algos to period 1's governance was made Oct. 14, 2021.

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The "text" dialogue box in the transaction's Notes field shows a 1379891347000000 microAlgo commitment. Divide the microAlgo value by 1e6, and you get 1,379,891,347 Algos. I shrugged, referred to the governor behind it as a "mysterious whale", and continued with the remainder of the post. 

After post publication I shared it to the r/Algorand subreddit, where the 3.75 billion committed Algo statement drew quick condescension. Luckily one or two redditors actually wanted to discuss the post instead of speculating about my sanity, and in the ensuing conversation one redditor suggested the "mysterious whale" mistakenly added several zeros to their Algo account's value when they hit "commit". 

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This made sense, but the idea that Algorand accounts can commit an arbitrary number of Algos to a governance period regardless of their actual ownership wasn't something I would take on the word of reddit. 

Solving the issue

The next morning I summarized the issue in a post on the Algorand Foundation's web forum. I speculated that there were four potential explanations to the mysterious whale:

  1. My interpretation of the address’ commitment transaction was incorrect
  2. I’m looking at some type of test Algorand address that doesn’t represent a “real” user
  3. There is a bug with the Foundation’s Algorand governance API
  4. Users are able to commit arbitrarily large amounts of Algo to governance, however these commitments become automatically ineligible because the committed Algos are not backed by the address’ holdings

A member of the Algorand Foundation responded that number four is the correct explanation -- users may commit arbitrarily large amounts of Algo to governance, however these commitments become automatically ineligible because the committed Algos are not backed by the address’ holdings. 

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Final disposition

The Algorand Foundation's governance API was used in my original post to query every governor's address, the amount every governor committed, and whether or not the governor remains eligible at query time, for period's 1 and 2. A sum of every governor's commitment in this set regardless of eligibility includes non-real commitment values because users may commit arbitrary Algo amounts regardless of their wallet holdings. My original calculation did not account for this, and included a non-real 1.38 billion Algo commitment. 

Updating period 2 vs period 1

Here is the updated plot comparing governance period 2 and 1. Governance period 1's values represent the number of eligible governors and their committed Algos when I queried them -- today, Jan. 18, 2022. Since governance period 1 already ended, the queried values eligible today represent those on the last day Dec. 31, 2021. 

18ef3ceb87ef8d1bd43d3c567334a67c83c07cbc43116c6e3b24b83444f15b8b.png

Moving forward

I definitely learned a lot about Algorand's governance, and how to disposition issues with the Foundation's API. My Algorand forum post prompted some suggestions on how to query historical governance data that I'll follow up on. In the meantime I'll set up a script that automatically queries the Foundation's API daily to snapshot eligible governors and committed Algos at that time. A good idea of historical eligible governance values are available in plot form on Algorandstats.com. 

I made a commitment to transparency with my cryptocurrency blog, and I felt obligated to provide more than just a correction to folks. I hope it all makes sense. 

Thanks for reading!  

Thumbnail photo by fabio on Unsplash.

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simplyrangel
simplyrangel

Aerospace engineer interested in all things data science and cryptocurrency. Based in Houston, Texas.


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