ReCap! Reddit AMA with Michael Knott, CTO of Algo Foundry & Messina.one
On Monday October 9th, Michael Knott answered all the community questions on the Algorand Official Reddit Page about the Messina.one protocol and the recently launched liquid staking solution for Algorand Governance, $mALGO.
Read on below for the full recap of all questions and answers.
1. Are any members of the Algo/Team Doxxed?
Messina is an AlgoFoundry project, and you can read all about us, and our team on the website: https://www.algofoundry.studio/
2. Why did you decide to create a liquid staking for Algorand Governance?
This is an interesting story. On one hand we were frustrated by the inability to unwrap other governance tokens at any time. We also thought that one way to make governance rewards positive instead of a chilling effect on Algorand DeFi was to introduce an interest bearing asset. Essentially with mALGO because rewards are tied to the ASA instead of to the wallet, the value of mALGO will go up over time. This means that if you use mALGO in DeFi (instead of ALGO) you are double dipping on your yield.
3. What plans does Messina have around mALGO DeFi opportunities?
At the moment mALGO is supported by Algorai, a structured product DeFi protocol on Algorand. In the coming days we will have pools on Dexes, support in xBacked and also in talks with Folks for lending. There is also some early support on NFT market places.
4. Where is the audit report? What is the status of audits? Will the reports be public?
We take security very seriously. To answer your question directly, we have already contracted VantagePoint to audit the liquid staking smart contracts and will release the report as soon as its completed. More generally, we have got pretty robust internal security practices which include static analysis, and also use AI security scanning on our code bases.
Also, we employ a “operational token” model (pioneered by Txn Labs / NFD), and the operational token is time locked. So any admin / operational work that needs to be done, needs to request a token which will only be delivered 30 mins later — allowing our ops team to be aware of any unauthorised requests and intervene — also the token expires in a given time frame.
Yep, we will definitely make the audit reports public. The status is: “The code is currently being audited”.
5. On the roadmap there are things like Pools, Swaps, Lend-Borrow, and Yield — what is the timeline on these products?
At the moment our team is hard at work on the first of that list, which will be omni-chain swaps. It’s too early to release an exact date it will go live, but it will be “soon”.
As development progresses we will update the roadmap on our site and docs section, so be sure to check back to view progress.
6. Will mALGO liquid staking qualify for DeFi governance rewards in the future? If so, what needs to happen to qualify?
We are excited to say yes! There is a good chance that may even occur in this first governance period. Also, all of the DeFi boost for Messina is provided to the mALGO pool.
7. How are you handling the governance voting with mALGO?
At the moment the answer is: Messina will vote on the user’s behalf. Of course, please participate in our Discord or Telegram groups to make your voice heard.
In the near future we will introduce a governance voting feature which will allow wallets holding mALGO at a snapshotted block to direct Messina voting.
8. Do I understand Messina’s liquid staking correctly in the sense that there is no exchange rate risk for me as a user? So I get back the money I put into the pool later at a ratio of 1:1, minus fees, plus accumulated rewards?
Yes, you are correct. Essentially, after the first governance period, mALGO will always be worth more than ALGOs. So you will always get back at least the ALGO you committed, but after the first governance period is over, you will always get back more than you committed.
9. According to Algorand Foundation regulations, is it allowed to transfer 56,525 TDR algos awarded for period #8 to #9?
So the official rule for g8 TDR distribution was that it had to be distributed before a specific date. Which it was. to the pool for mALGO. Just the exchange rate won’t be updated to reflect that until later. So the APR estimate is accurate.
10. Is there no way to participate in xGOV with your solution? Is it incoming?
Yeah, it’s definitely coming. Unfortunately we were on a very tight timeline to get this up in time for g8.
11. Plans/talks to integrate mALGO into NFT markets or other dapps on Algorand?
Yep, for sure! It’s already live on EXA Market. Go check it out!
12. Since you are also operating a bridge, will you go the same route as Folks Finance to bring mALGO cross-chain?
There has been some internal conversation about that, but I am not sure we will adopt that exact mechanic. We are exploring liquid staking on other chains though.
13. Will you publish an SDK for interacting with liquid governance? Are your contracts ABI compliant?
We will definitely publish an SDK, and also there may be an incentive to add mALGO staking to your own sites using the SDK in the future. The exact details are being worked out at the moment.
14. Why should I pick mAlgo over other Governance alternatives? And do you have a plan for what to do with it years from now if there’s no Governance?
Well, our belief is that mALGO provides the best governance solution on Algorand at the moment, for a few reasons:
The mALGO ASA is interest bearing — rewards are linked to the ASA and not to the wallet that staked it. Why is this important? It allows you to participate in DeFi and get both the DeFi yield (whatever that may be) and the governance yield over time. With other solutions, you have to unwrap and rewrap your algos each period.
Since the ASA itself is interest bearing, there is actually a secondary market for it. People may want to buy it off a dex simply because by holding it they get the governance rewards.
You can unstake the mALGO for ALGO at any time directly from the protocol. You don’t have to wait for governance periods to end or take slippage in limited liquidity DeFi pools.
I am sure there are other reasons too, but those are my favourite.
15. Would it be possible to make Algorand liquid staking available on other chains through your bridge?
Yep it sure would. Basically any mALGO bridged to other chains would hold its characteristics. Since the ASA is the thing gaining the rewards from governance, not the staking wallet, you could essentially bridge the ASA and still retain future rewards.
16. The Messina bridge runs on the Wormhole messaging service, allowing information to flow between smart contracts on different chains. But in the docs you mention the use of alternate messaging services. Do you have any specific ones in mind that could be used?
You are correct, Messina is currently built on top of the Wormhole messaging layer. We like to think of Messina’s bridging protocol as the “Stargate of Wormhole”. We have added liquidity pools that allow for mapping of tokens of different blockchains to each other, so that specific tokens are bridged instead of relying on the default wrapped token model that Wormhole Portal Bridge does.
For example, if you bridge USDC from Ethereum to Algorand, you will receive USDCa which is the official USDC on Algorand, instead of a wrapped version of USDC you would normally get through Wormhole bridging.
In terms of other messaging protocols, we have been evaluating the usefulness of being able to choose the messaging protocol instead of just relying on wormhole alone. Primarily the reason for this is that supporting new or upcoming chains or L2s is very expensive in the wormhole model, because full nodes of those chains would have to be incorporated into the guardian networks. By being able to route through LayerZero or Axelar etc, might enable Messina to support new chains at a cheaper operational cost. That being said, as of today, we rely on Wormhole exclusively.
17. How did you get into blockchain Mike?
To be honest, it was a “right place right time” situation for me (or “wrong place wrong time” depending on your perspective ;) )
I was working on AI robots, and was educated on what people mean by “hardware businesses are super hard”. During that business we were heavily engaged in crypto mining with all the extra compute resources that AI requires but aren’t always fully utilised and… yeah… this new thing called Ethereum was just starting to get popular. The rest is history.
18. Any advice for those in our community looking to do a web3 startup?
As to advice — There was a time when web3 startups were actually in a great sweet spot. It was possible at once to decentralise the startups funding, as well as the infrastructure costs… and then have the hype factor of a cool new tech. You could literally get an idea, with 2–3 friends that are engineers and throw up something … and yeah for a while it seemed you couldn’t really miss.
These days, due to consolidation, bear markets etc the moat for web3 startups is widening. You have to be a lot more professional, efficient and innovative generally speaking.
I think these days the best plan is to get involved in some sort of accelerator or incubator program, or work with a venture studio like AlgoFoundry. The reason is, you ultimately need the discernment of experienced web3 business folks, the network of resources needed for go-to-market and ultimately the funds to make it happen.
Hopefully that answer helps,.. if not, reach out to me on one of our channels and I would be happy to talk more in depth about your specific case.
We thank all community members on Reddit for their questions and hopefully it was educational and helpful! Any other questions you might still have, feel free to join our Discord server or hop in the Telegram channel, and our team will be more than happy to sort you out.
We dream of a future where information and value can be easily accessed anywhere. Messina uses the latest advancements in cryptography research so Web3 users can get the best out of every blockchain without compromise and navigate them seamlessly. Through Dapps that are simple and intuitive, we enable interoperability.