one of the most advanced features of blockchains.
In the early phase of blockchain technology development, most of the blockchains designed were inherently decentralized. To perform transactions on these centralized blockchains, users would have to wait for processing and validation from a central authority. This creates significant flaws including; the difficulty of access, lengthy wait time, and low transaction per second (TPS) rates.

To tackle these issues, blockchain developers commenced the decentralization of their blockchains. However, ensuring the true decentralization of blockchains has been a challenge for most blockchain developers. Blockchains, in their bid to achieve decentralization, mostly became slow or permissioned. Being slow prevents blockchains from scaling and handling larger volumes of transactions. Also, being permissioned concentrates power in the hand of a few players. These defeat the purpose of decentralization.


In a truly decentralized blockchain, each new block is generated by a separate, new committee. Each committee us randomly selected from the set of all users. The process for choosing the next block in the blockchain and verifying that all its transactions are valid is called consensus.
To ensure decentralization, Algorand grants every account on its blockchain the right to participate in consensus. The consensus is a purely algorithmic process. In Algorand, consensus enjoys some unique characteristics.

Essentially, consensus participation in Algorand is a very light form of civic service. Every online user who possesses Algos can participate in the consensus protocol. To reduce exposure, users do not use their spending keys for consensus. Instead, any user who wishes to participate in the protocol generates and registers their participation key. Using participation keys ensures that a user's Algos are secure even if their participatory nodes become compromised.

The Algorand decentralized consensus mechanism solves many issues faced by other blockchains such as wastefulness, the concentration of power, known location, scalability, ambiguity, and security.


Currently, in Algorand, every account can participate in consensus, but not governance. Governance is the power of deciding non-consensus tasks such as the funding of grant proposals.
As the next step toward ensuring true decentralization, Algorand is proposing the introduction of a mechanism for any account to participate in governance. The goal of this proposition is to decentralize Algorand governance and align network rewards with such governance. Precisely, this entails putting forward the mechanics and incentives guaranteeing governance that is simultaneously decentralized, secure, and efficient.

Participation in the governance mechanism will be voluntary. Based on the proposal, the accounts that choose to participate in governance (the governors and the governing accounts) will lock their tokens for a given amount is time, initially proposed to be one year. To specify the voting process by which governing decisions are jointly made, the blockchain will make use of governance mechanics. This process involves only the Algorand foundation and the governors, with very distinct roles for each. The foundation facilitates while the governors decide.

Governance mechanics will help to ensure transparency, lack of censorship, lack of spamming, and convenience in voting. Governance votes will have to be digitally signed by governance-participation keys that are separate from both spending and consensus-participation keys. This will enable a user to keep his/her locked governing account with a custody provider while retaining governance voting power on his/her wireless wallet.

Unlike consensus, governance is not algorithmic. It requires personal attention and time. Hence, Algorand will reward governing accounts for their work. Based on the proposition, the rewards earned by governing accounts will be higher than the network rewards currently in place. In keeping with its philosophy, Algorand will allow the governance reward rate to be chosen in a decentralized fashion. Precisely, the rate will be decided by the accounts themselves via a Dutch auction within the parameters decided by the Foundation.


After putting forward the guiding principles for governance participation, let us recall the principles for consensus participation and highlight the differences between these two forms of participation in Algorand.

In Algorand, consensus enjoys certain unique characteristics. Consensus participation is easy and does not require any significant computational resources. Also, it is open to all and voluntary, therefore, Algorand accounts can freely choose whether to participate in consensus or not. Furthermore, consensus is uncompensated since it requires only minimal computational effort. Due to its lack of compensation, consensus is unmonitored.

Governance participation, however, is different and requires different principles. Governing accounts will be monitored to verify real participation in governance. Also, governing accounts have to serve for one year and lock their tokens for the entire year to ensure that they are affected by the votes they cast since the decision taken by the accounts will deeply affect the growth of the Algorand ecosystem. Although, governors are allowed to make early withdrawals from their locked accounts, there are precise restrictions and penalties in place to check early withdrawals.


Decentralization has been an ongoing and top-priority objective of Algorand. The blockchain has achieved decentralization at the protocol level and solved the blockchain trilemma. However, true decentralization cannot be simultaneously achieved in all areas of governance. Hence, Algorand is starting with an important area through its Foundation so as to learn, correct and if necessary, then extend governance decentralization to more areas with gained confidence and experience.

Crypto enthusiast, especially in countries like Nigeria, can take advantage of the governance-participation mechanism to enjoy true decentralization on the Algorand blockchain and earn compensation rewards.