Thursday, December 12, 2024
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Algorand Consensus Incentivization White Paper Walk Through

Algorand is inherently designed for decentralization, and its Pure Proof-of-Stake mechanism makes participation extremely accessible. This year, in the first significant upgrade to its consensus mechanism since inception, Algorand will now directly incentivize that participation. That is, Algorand will soon change the L1 behavior to reward block producers. The impact of incentivizing consensus is that it will drive a surge in the amount of Algo being staked and increase the number of consensus nodes in the network, thereby increasing network security and decentralization.

A portion of the consensus incentives will come from transaction fees. In the short-to-medium term, the Algorand Foundation will also contribute funds to boost the incentive reward amounts. Over time, as adoption of Algorand grows and modifications to the fee structure are implemented, transaction fees will become more meaningful and should be able to sustain the security of the network on its own.

Read the full discussion paper: https://assets-global.website-files.com/62d96b0e9ea60fd1c96a1b50/65a7c0863805fd8b83cf34d5_upload_consensus-incentives.pdf

Learn more about the 2024 Algorand Technical Roadmap: https://www.algorand.foundation/2024-roadmap

source

by Algorand Foundation

linux foundation

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23 thoughts on “Algorand Consensus Incentivization White Paper Walk Through”

  • 00:00 – Intro
    02:00 – Incentivization Context
    03:47 – Solution Design
    06:54 – Possible Payout Functions
    14:00 – Game Mitigation and Anti-Fragility
    18:14 – Concerns
    19:57 – Conclusion

    "For all the fees in a given block we will scale them by a certain amount [from AF set aside funds], and those [combined fees] will be dispersed to the block proposer of that block. [This will be proposed/approved through governance]"

    "This will happen in 2024"

  • I appreciate the plans on incentivization for participation nodes and greatly looking forwards to it. What I don't understand is why your plan seems to heavily focused on rewarding somewhat "unprofessional" participations, too. One USP of Algorand for me was always developer friendliness. Most developers are capable of running a node on small cloud servers with uptimes at 95%+. Hearing you talk so much about rewarding nodes who don't make an effort to do so, somewhat makes me think, why I am doing the effort.

    Have to say, I didn't read the paper in total. But from your video I got a feeling maybe I'm better running it on my pi at home then actually caring for performance, monitoring and optimizing. Will the effort be rewarded significantly?

  • In my opinion incentivizing consensus participation is prior than governance…..

  • John, could the rewards system be index linked to the current value of Algorand. This would account for price fluctuations and be the fairest value return to node runners?

  • Proud to be an investor in Algorand. It’s only the beginning.

  • Great presentation, the main issue of Algorand is being addressed. Excellent

  • Nice. Any plans for distribution of storage for indexers / distributed queries? I'm curious since eventually the ledger will be huge and too large for any one node.

  • Great job with the video! It might seem small, but things like this make a big difference.

  • Thank you for going through the paper like this.
    This is a very good way to spread awareness and get discussions and feedback going

Comments are closed.