Liquid Staking on Algorand
Last updated
Last updated
In Q4 2021, the Algorand Foundation implemented decentralized governance, allowing ALGO holders to contribute to the expansion, improvement, and development of the Algorand ecosystem. ALGOs are rewarded for their contribution.
To participate in governance, the current Algorand Foundation concept necessitate users to commit their ALGO for a 3-month term. Users must vote and have their committed ALGO balance in their wallets during this time to be eligible for rewards. As a result, users’ ALGO are effectively locked and unusable if they plan to receive rewards.
on Algorand is a liquid staking solution that facilitates user participation in Algorand Governance and earns rewards while enabling users to trade staked positions, as well as participate in on-chain decentralized finance with their staked assets. Messina.one’s liquid staking gives users options to:
Stake their ALGO tokens in a decentralized and secure way
Use their mALGO in DeFi protocols across the ecosystem
Do all of the above simply and easily with a click of a button on the UI
mALGO is an ASA token that represents the users' share of the total supply of ALGO tokens inside Messina.one's Algorand liquid staking pool. As Algorand Governance Rewards are distributed, they are accrued in the ALGO liquid staking pool, meaning 1 mALGO will be worth more with each governance period. Users do not need to recommit them each governance period adding to their convenience, whiles DeFi protocols will not face sharp drops in TVL every quarter.
For example:
In Governance Period 9, the mALGO/ALGO ratio is 1:1. John staked 10 ALGOs and received 10 mALGOs.
After rewards have been distributed, the value of mALGO increases from 1 ALGO to 1.06 ALGOs. If John decides to unstake at this point in time, he will get = 10 mALGOs x 1.06 = 10.6 ALGOs (+0.06 ALGOs).
When staking with Messina.one on Algorand, users receive mALGO tokens as soon as they stake ALGO. Messina.one will calculate the current mALGO/ALGO ratio and send the correct amount to the user. ALGO tokens are then committed to Algorand Governance to earn rewards that accrue in the ALGO pool increasing the price of mALGO over time.
ALGOs can be staked during the first two weeks of each quarter, in line with the commitment window for Algorand Governance. Our staking window typically closes 24 hours before the Algorand Governance commit window closes to ensure timely participation in Algorand Governance.
ALGO cannot be staked to Messina.one outside of this staking window.
Users are able to unstake their mALGO for ALGOs any time. Just be aware that if unstaking occurs before Algorand Governance Rewards are released and added to the pool, the user unstaking will miss out on that yield. Other users will not be affected. Messina.one will calculate the mALGO/ALGO ratio at the time of unstaking and send the correct amount to the user.
Holders of mALGO will be able to vote in Algorand Governance. A Snapshot will be taken quarterly to determine eligible voters who will be able to vote via the Messina website. This feature is estimated to launch in December 2023. Any votes that occur before the launch of this Algorand Governance voting feature will be delegated to the Messina.one executive management team.