# Evolving Algorand Governance **URL:** \ **Category:** Governance Discussions\ **Tags:** defi\ **Created:** [May 3, 2022, 6:58pm UTC](https://forum.algorand.co/t/evolving-algorand-governance/6646 "2022-05-03T18:58:49Z")\ **Posts on this page:** 1\ **Showing post:** 64
**Author:** ![just\_a\_guy72](https://avatars.discourse-cdn.com/v4/letter/j/ecb155/32.png) [@just\_a\_guy72](https://forum.algorand.co/u/just_a_guy72)\ **Post date:** [May 4, 2022, 1:14pm UTC](https://forum.algorand.co/t/evolving-algorand-governance/6646/64 "2022-05-04T13:14:53Z")
Unpopular opinion - but I think someone should say it I think the foundations proposal to evolve governance is a good one, as we do need a more equitable way to reward active participants in the Algorand ecosystem as compared to passive holders, but I think the focus is too narrow in scope. DeFi and NFTs are two use cases for blockchain that have caused multiple coins/tokens (layer1s and defi projects) to gain significant value in the last 18-24 months, but the use cases have downfalls that Algorand has successfully, thus far, avoided. We should be focused on attracting the “right” users as opposed to the retail mainstream users who hop from protocol to protocol looking for the highest yield (this is an over-simplification but helps underscore my point). High yields are unsustainable, and when the liquidity programs, governance programs, staking programs, etc run out, you have an outflow of users and capital to the next “hot” layer 1. DeFi is not a long term sustainable model at this point in crypto’s evolution as most users are focused on yield farming and alpha generation as opposed to the financial inclusion and efficiency principals that it touts. This coming from an active DeFi user on multiple Layer 1’s, and as someone who has moved capital from protocol to protocol to capitalize on the highest rewarding liquidity program. If we want true long-term value to be attributed to the Algorand ecosystem (and thus the ALGO token), it is my opinion that Algorand needs to differentiate itself as an institutionally friendly blockchain and do more to support entrepreneurs and projects that are building new use cases as opposed to use cases that were introduced on Ethereum (NFTs, DeFi, etc) and then copied to other layer 1s. Even though crypto is in a “cool down” period at this exact point in time, institutional interest and adoption has never been higher. People are starting to see past the “crypto = Bitcoin” narrative, more and more intelligent entrepreneurs are starting to build in the space, and more institutions are starting to dip their toes into investing. We are at a critical turning point that will allow layer 1s to differentiate the value add they provide to the broader ecosystem and Algorand has the ability to lead the way due to its ease of use and exceptional tech stack. Instead I think the foundation should focus on rewarding (i) entrepreneurs and innovators who are challenging the status quo of projects built in the crypto ecosystem, (ii) Active developers who contribute to open source protocols/new use cases, (iii) non-crypto oriented institutions (read: not exchanges) who are focusing on building in the decentralized ecosystem, and (iv) community participants who actively help the brand of the Algorand ecosystem through contribution efforts (almost in a DAO type model). Rewarding DeFi holders and NFT creators, while important, should not be the main focus as we will become susceptible to the same hype cycles that are ongoing within the other layer ones (look at Terra - what use is there for UST besides anchor protocol). These are temporary cycles of prosperity; not necessarily leading to long term accretive value. Instead lets focus on building an institutional brand around Algorand, focus on promoting entrepreneurs who are exploring new use cases that can benefit from a decentralized model and diversify the participants and capital allocation within the Algorand ecosystem, and focus on getting more participation from current, actively involved community members through workstreams/projects that can be rewarded with ALGO. The NFT hype train and DeFi hype train are great for short term value addition, but do not equate to long term user attrition, developer attractiveness, or institutional adoption. In my opinion, those will be the key fundamental value drivers that will create ecosystem value. This is where I would put a bunch of rocket emojis --- _[View the full topic](https://forum.algorand.co/t/evolving-algorand-governance/6646)._