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.
Liquid staking allows users to earn staking rewards without locking assets or maintaining staking infrastructure. Users can stake tokens and receive tradable liquid tokens in return. As users' funds are controlled by smart contracts, Messina.one never has direct access to users' assets.
Messina.one’s Liquid Staking on Algorand is a liquid staking solution that facilitates user participation in Algorand Governance and earns rewards while enabling them 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
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 staked to Algorand Governance to earn rewards that accrue in the ALGO pool increasing the price of mALGO over time.
mALGO is an Algorand ASA token that represents the users’ share of the total supply of ALGO tokens inside Messina.one’s Algorand liquid staking system. It is a non-rebasable token, which means that the amount of tokens in the user’s wallet is not going to change. Overtime, the value of this token increases as the amount of ALGO tokens increases with the distribution of Algorand Governance Rewards each quarter.
Algorand Governance is a 3 month period each quarter and staking ALGOs is typically open during the first two weeks of the quarter. Messina.one’s staking window is open during this time and typically closes 1 hour before the Algorand Governance stake window closes to ensure timely participation in Algorand Governance.
ALGO cannot be staked to Messina.one outside of this staking window.
At present, mALGO can only be minted during the staking period. This is due to its value being tied to the circulating supply and rewards from Algorand Governance. We are looking at how to enable users to stake mALGO outside the staking period and hope to release this feature in the near future.
The minimum amount to stake is 10 ALGOs per staking transaction.
There is no maximum amount that can be staked.
Voting is delegated to holders of the Messina token who are able to vote via Messina Governance that will launch in Q1 2024. Any votes that occur before the launch of Messina Governance will be delegated to the Messina.one executive management team.
Unstaking can be done at 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.
Rewards are typically released within 7 days from the end of each Algorand Governance period. Algorand governance periods run every quarter so rewards are released in the first week of January, April, July and October.
Messina.one applies a 10% fee on Algorand Governance Rewards received. This fee is NOT taken from any ALGO staked by users.
The APR shown is estimated based on the Algorand Governance Rewards pool divided by the number of eligible Governors and amount of ALGOs staked at the time of estimation. This estimation is updated periodically as Governors may become ineligible. In practice, the returns can be higher as Governors become ineligible right up till distribution of Algorand Governance Rewards.