The Definitive Algofi Vault Guide

Learn how to use Algofi’s Vault and upgrade your Governance game with our strategies

Yo, gov!

The Club has moved to our own custom website: www.governorsclub.xyz. 

Even though we've moved, our content and dedication to being the definitive source to upgrade your Algorand DeFi and NFT game remain unchanged!

We'll keep this substack accessible for a short period of time, but we encourage you to update your bookmarks and links to our new domain as soon as possible to continue your Algorand journey.

Thank you for your continued support, and we look forward to seeing you at the new and improved Club!

Gov Tip: If you’re new to Algorand, make sure to check out our Algorand Beginners Guide to begin your Algorand journey!

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Governance Vault Overview

Put simply, Algofi’s Vault enables governors to unlock their Governance stake through Algofi’s Lending Protocol. Users who participate in governance through the Vault can borrow assets (ALGO, STBL, USDC, goBTC, & goETH) against their position to use for staking, trading, yield farming, etc. And the best part? Users can vote in Governance and earn rewards directly through their vault.

Gov Tip: Users will also earn Aeneas rewards while the program remains live.

So how does this work?

For the sake of not getting too technical, Algofi’s vault creates a unique Algorand account that the user controls through the protocol. When a user supplies ALGOs to their Vault, Algofi creates and provides users with a new asset named “Vaulted ALGOs” or “vALGOs” which has the same price and collateral factor as ALGOs. While users can participate in Governance with their vALGOs and borrow against them through Algofi’s lending protocol, users can’t borrow vALGOs. 

Gov Tip: If you want a more technical breakdown of this, you can check out Algofi’s official documentation. On the backend, the Algorand account created by Algofi when you commit to their Vault is the same account as the Storage Account for their lending protocol which is what enables the feature. You can learn more about the Storage Account here.

To summarize: Users commit ALGOs to Governance through Algofi’s Vault, receive vALGOs that they can lend back to the protocol to borrow assets against, and vote via the Vault to receive governance rewards.