Governance reward distribution - Governance Discussions - Algorand
Governance reward distribution
post by omniwarp on Mar 5, 2024
We vote during a 3 month phase and then we all get our rewards at the same time. This introduces a lot of new liquidity to the market and if the price wen’t up before, the governance rewards will cause a sell pressure reducing or even killing the number go up network effect in case the liquidity is low. This could be solved by distributing the rewards evenly during the next governance phase. For instance, if we’re entitled to 100 coins, then we distribute these during the next 3 months which gives us roughly a coin per day. This way, the governance reward mechanism will not cause big dumps in price. One downside is that this creates more transactions, but if we have 1000 governors, it’s only 1000 transactions per day which is equivalent to 0.1s throughput at 10k tps.
My question is, is this a good or bad idea?
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