Folks Finance is collecting community feedback for the next FF voting session

Hello Liquid Governors!

It’s almost time to get into the internal Folks Finance vote for Period 8. Those who minted gALGO back in July will have the chance to make their voice heard on important matters regarding the future trajectory of Folks.

There are a number of proposals which the Folks team would like to request feedback on. Proposals which gather community support will be pushed into the vote, so if it’s important to you, drop a comment and start a discussion!

Listed below are the matters at hand:

1)COOP listing on Folks Finance

COOP INTRO: Popular community token COOP has become the darling of the Algorand community since its creation in early 2023. With 100% of the token being distributed to community members in the first few weeks of its existence, COOP is one of the most decentralized and democratized coins in the Algorand ecosystem. The Algorand community has shown great interest in a possible listing in the Folks Finance’s lending market. This measure proposes that COOP become available to deposit for earning interest and to borrow for exposure in Folks Finance’s markets. The asset cannot be used as collateral. Below its parameters

Parameters Value
Collateral Factor 0%
Borrow Factor 120%
Liquidation Max 50%
Liquidation Bonus -
Liquidation Fee -
Collateral Cap ($) -
Variable Base Rate (RV0) 0%
Variable Slope 1 Rate (RV1) 8.50%
Variable Slope 2 Rate (RV2) 200%
Stable Additional Base Rate (RS0) 1%
Stable Slope 1 Rate (RS1) 2%
Stable Slope 2 Rate (RS2) 200%
Stable Excess Rate (RS3) 40%
Optimal Utilisation Ratio (Uopt) 55%
Optimal Stable to Total Debt Ratio (Oratio) 20%
Rebalance Up Utilisation Ratio (URU) 85%
Rebalance Up Deposit Interest Rate Percentage (DIRRU) 48%
Rebalance Down Delta (RD) 20%
Retention Rate (RR) 10%
Flash Loan Fee 0.10%
Borrow Cap ($) 30.000
Single Stable Borrow Percentage Cap 6.50%

If the proposal is put to a vote, the options would be:

a) Approve listing COOP in the Folks Finance Markets.
b) Deny listing COOP in the Folks Finance Markets.

2)Diversifying the Folks Finance Community Treasury

The slump in the crypto market over the past 18 months has reminded everyone that diversifying holdings is key to managing risk and minimizing value depreciation. Here ASA Stats you can see how the treasury is composed . Folks’ Community Treasury is worth over 100,000 USD, with sizable holdings in gALGO. The Folks Economic team proposes introducing a structured diversifying strategy in order to increase the Community Treasury’s stablecoin share. Details on this strategy can be found below:


To secure the long-term financial health of our protocol and mitigate market risks, this proposal outlines a structured asset liquidation strategy. The current share of stablecoins within the treasury represents 26.35%; the goal is to attain a 50% cash share in the form of stablecoins. The liquidation will follow a Dollar-Cost Averaging (DCA) approach, which is designed to reduce the impact of volatility. The assets will be converted into a basket of stablecoins like USDC and USDT to maintain a diversified cash position.

Time Interval for DCA

After evaluating market liquidity, volatility, and our treasury’s asset size, we propose to proceed with bi-weekly intervals for the asset liquidation. Bi-weekly intervals strike a balance between reducing market impact and completing the liquidation within a reasonable timeframe.

Execution Plan

Phase 1: Liquidate 10% of assets in the first 4 bi-weekly cycles (8 weekss).

Phase 2: Once the 40% stablecoins share is reached. Liquidate 5% bi-weekly to reach the new stablecoins share allocation.

Phase 3: Keeping the shares rebalanced on a bi-weekly basis

Phase 4: Re-assess the strategy after two months to adapt to any major market changes.

If the proposal is put to a vote, the options would be:

a) Approve the diversification strategy outlined in the proposal.
b) Deny the diversification strategy outlined in the proposal.

3)Liquid Governance Sustainability Fee

Liquid Governance is the most popular DeFi solution to Algorand Governance, with over 460 Million gALGO minted by 3,665 Governors during Governance Period 8. With the goal of becoming a sustainable protocol on the way to decentralization, a sustainability fee could be introduced to Liquid Governance. We’ve seen many projects forced to sunset without methods of generating revenue for the business. This fee would support the long-term goal of Folks Finance to be independently healthy and self-sustaining. This fee would equate to 0.4% of the gALGO minted amount. All collected fees will be allocated to the Community Treasury, and if any funds are needed for development costs, a forum discussion will be created.

If the proposal is put to a vote, the options would be:

a) Approve implementation of Liquid Governance Sustainability Fee.
b) Deny implementation of Liquid Governance Sustainability Fee.

4)Governance Revenue Distribution

Folks Finance has generated a minimum of 954,325 ALGO from Liquid Governance during Period 8. The proposed allocation of this revenue is as follows:

  • Community Treasury: 150,000 ALGO
  • Partners and Ecosystem Adoption: 150,000 ALGO
  • Business Development: 754,325 ALGO minimum (amount is likely to increase with APR as Gov8 continues).

Business Development Funding includes the cost of Audits, marketing, and the Folks Finance Bounty for the Algorand Hackathon.

If the proposal is put to a vote, the options would be:

a) Approve the revenue allocation detailed above.
b) Deny the revenue allocation detailed above.

5)Folks Finance Technical Explanation Video

Videos are a powerful educational tool. The Folks Team would like to know if the community is interested in an animated educational video which explains some of the technical aspects of the protocol.

If the proposal is put to a vote, the options would be:

a) Approve allocation of $3000 from gALGO Business Development to support the creation of this video.
b) Deny allocation of $3000 from gALGO Business Development to support the creation of this video.

6)Distribute Targeted Rewards as gALGO

The Algorand Foundation distributes ALGO as Targeted Rewards to DeFi projects, of which Folks Finance is one of many. Folks would like to distribute these rewards as gALGO, which would require the rewards to be committed to Liquid Governance. This is only possible if the rewards are distributed before the commitment window closes. The revenue generated from gALGO would be distributed in the following quarter in accordance to the guidelines of Targeted Rewards Distribution.

If the proposal is put to a vote, the options would be:

a) Approve conversion of ALGO Targeted Rewards into gALGO.
b) Deny conversion of ALGO Targeted Rewards into gALGO

The Folks Team would like to extend our gratitude to the community. The continued support and engagement is greatly appreciated and gives reason to keep building and expanding Folks Finance.

Please leave your thoughts on the proposals below, and invite your friends to join in the conversation as well.


Overall good proposals.

I have one thing I want to suggest. In section 3, Liquid Governance Sustainability Fee, you say; “This fee would equate to 0.4% of the gALGO minted amount. All collected fees will be allocated to the Community Treasury, and if any funds are needed for development costs, a forum discussion will be created.”.
Can you instead allocate half of the fees (0,2%) into Community Treasury and keep half for yourself, so you can generate that semi-stable revenue stream to make this platform sustainable/profitable. I think this is far better model than ask afterwards if you can take some from Community Treasury.

You haven’t released FOLKS token, so managing Community Treasury is not that efficient/desired thing to do yet.

Keep it simple.



$COOP is a natural store of value that can showcase the enormous tech superiority of Algorand and Folks could drive the Growth


Listing COOP with the liquidity present and no off-chain pricing means it could be a risk for the whole lending protocol, the last lending protocol on Algorand.

Liquidators need to potentially buy COOP on the open market to liquidate positions. A 10k ALGO buy of COOP has a 2.1% price impact using vestiges DEX aggregator and thats just 1k $. With the borrow cap being at 30k $ this could lead to big problems since they only liquidate loans if they can make profit by doing that.

Also with the present liquidity an attacker could force liquidations by looking at specific loans and manipulating the price on DEXs to force a liquidation since no off-chain pricing is used. So they would buy on the open market enough to force a liquidation → liquidator buys COOP on the open market → COOP prices rises again and the attacker could make profit this way. At worst it would just lead to bad debt.

The question also becomes how sensitive the price oracle is. Normally relatively “long” MAs are used but this seems to add risks here again. Any comment on that?


1/ COOP listing on Folks Finance: Against this proposal. I also don’t think a meme coin should be listed in a serious lending platform, even with 0% collateral factor, there is still risk on borrowing side due to the low liquidity. Also COOP holders (I am not) should think twice before supporting this as it will bring selling pressure (borrow/sell) on this coin.

3/ Liquid Governance Sustainability Fee: Against this proposal. I see this as a consequence of the Algofi shut down and Folks new monopoly (putting GARD aside). This service has always been free for Algofi and Folks users, and it already brings revenue to Folks through lending fees (people mints gALGO, deposit it and borrow against it generating lending revenues). Also, before end of commitment period, users can change their mind and burn back gALGO to ALGO without loss, which would not be possible with a mint fee, unless you account for it and give back the mint fee.

6/ Distribute Targeted Rewards as gALGO: Neutral/Against this proposal. AF provides liquid ALGO for distribution and therefore you should distribute liquid ALGO in my opinion. Also if you commit those rewards, it means less rewards for everybody else (vanilla and Defi APR will logically decrease). It also brings selling pressure on the gALGO/ALGO pool.


Reagrding 3)

FF already makes a lot of money through gALGO. The ALGOs that correspond to non reminted gALGOs get committed by FF themselves and they earn those rewards and the user with gALGO is stuck until the next redeem period.

So FF is earning atm 1M ALGOs (minus some stuff) due to how gALGO was designed and now you want even more? Why is that not enough + the money you raised? Also if FF wants more money tell us how much you are spending on employess (approximately 20 team members I see in discord)? You are not giving us any real info on why exactly you need more money which is a problem. Just saying market bad doesnt help

  1. Users would be dependent on the peg of gALGO which is pretty bad. This also means users might be way less interested in the rewards from farms paying out gALGO instead of ALGO. Also i dont think its on FF to decide this, you are required to distribute all the ALGO rewards to users and imo you are not doing it if you wrap it into gALGO

Overall, I am a little disappointed with the proposals. It doesn’t make sense to me from a business perspective to let the community manage Folks Finance revenue and finances.

My overall advice is to stay focused on growth through RWA.

1)COOP listing on Folks Finance
This is a bad idea for many well-known reasons. I am surprised this was even considered as a proposal. No meme coins should be listed - period.

2)Diversifying the Folks Finance Community Treasury
Makes sense. I would go one step further. The community treasury should be deployed to provide liquidity and generate revenue vs. sitting idle in the treasury.

3)Liquid Governance Sustainability Fee
This is another bad idea. Charging a fee to wrap ALGO into gALGO would deter Liquid Governance. gALGO is a great way to get folks into Folks Finance. The fee would be a deterrence.

Ultimately this should be decided by the Folks Finance team - not as a community proposal.

4)Governance Revenue Distribution
Seems reasonable, but it doesn’t make sense to have this as a community proposal.

5)Folks Finance Technical Explanation Video
I am not even sure why this is a proposal. The business development team should decide how to allocate their budget.

6)Distribute Targeted Rewards as gALGO
This is another bad idea. ALGO targeted rewards should be distributed as ALGO - period.


Hey Lobo, thanks for the feedback. We are reading the suggestions and we have been thinking that if the proposal is moved to the vote the borrow cap will be lowered to $5k. Regarding the oracle, for each pool a TWAP is made and then the weighted average is taken on the TVL


Thanks for sharing your feedback.

  1. if the proposal is moved to the vote the borrow cap will be lowered to $5k, so it brings a very low risk to the platform which could be easily covered by the Decentralized treasury. The Algorand community is strongly asking for this listing, so we leave them the choice.
  2. The minting fee will be returned to the user wallet if he decides to uncommit.
  3. We are monitoring the community sentiment and if negative we will not bring to the vote. Nevertheless, the rewards being accrued on the rewards would be anyway distributed to the community so Folks users would benefit from it in the first place.
1 Like

The fee is important because it improves the sustainability of the protocol and to grow even more without entirely relying on investment funds, considering that FF closed the seed round almost 2 years ago. The fee will go into the community treasury and, as we mentioned above, could be used in future for development if the community approves it


Thank you for your feedback. The reason for this is that we want to involve the community as much as possible in FF’s update and be transparent with them, so we think it’s good to gather community sentiment before making a decision.

  1. if the proposal is moved to the vote the borrow cap will be lowered to $5k which makes it a very low risk for the protocol and we can monitor the beheviour. We have been receiving a huge request from the community in the last months.
  2. Thanks we will consider it for future plans. We would love to learn about your ideas.
  3. The fee is very low compared to the generated yield from governors but it would be very helpful to sustain Folks long term.
  1. We are kinned to increase more this type of behaviour of sharing transparency with community. This is a small thing that we want to evaluate to understand if community would like to be part of such decision.
  2. Thanks we are evaluating feedback and if the sentiment is totally negative we will not bring it to the vote.
1 Like

Its good to try to be more sustainable, definitely needed in these times. but there are two ways you can approach this: cut costs or get new money in (for example with a mint fee on gALGO)

I think its fair to ask if the costs are too high, an example would be looking at the amount of employees in discord. I dont know if those are really all FF employees or also Blockchain Italia employees which would make more sense. We kinda need actual information to make an educated decision and know if you took already some actions to make FF more sustainable or if you thought about other options and came to the conclusion that this is the best way

Folks has been spearing budget since its launch, which coincided with the start of the bear market, we keep maintaining a low budget that still allows us to improve and expand and play a key role in the DeFi ecosystem.
We consider this option because it has a small impact on the users’ earnings. In addition, liquid staking protocols generally charge fees and the proposed fee is below the market standard. The fee % is also in line with the structure of xAlgo. Not charging a fee for gAlgo directly discourages xAlgo.


good to know that FF already tries to be sustainable. you didnt really answer my question about the employees tho which you should make clear when you want to be really transparent

the thing is i wouldnt complain about it when you wouldnt already make money on gALGO with unredeemed ALGOs. its correct that 0.4% isnt so bad compared to other options since lido for example 10% on the rewards which would correspond to 0.45% here, but the thing is with something like lido you dont have to bother with remint periods and loose out on future rewards if you dont… if you only had a xALGO type product (on Algorand not a different chain with farming incentives) and then charge fees on it ok, having to deal with reminting gALGO to earn rewards + a fee is a bit too annoying imho

Yes, they’re all in the Folks team, but we have a good mix of full and part-time, which makes our employee costs very efficient