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A user account must be online to participate in the Algorand consensus protocol. In the case of Liquid Governance, the account which holds the user's ALGOs are an escrow account, unique and invidual to the user, which is controlled by a smart contract. This means that marking an account online/offline for the purposes of participating in consensus, must be done by calling the Liquid Governance application which will then generate the desired transactions.
To reduce exposure, online users do not use their spending keys (i.e., the keys they use to sign transactions) for consensus. Instead, a user generates and registers a participation key for a certain number of rounds. It also generates a collection of ephemeral keys, one for each round, signs these keys with the participation key, and then deletes the participation key. Each ephemeral key is used to sign messages for the corresponding round, and is deleted after the round is over. Using participation keys ensures that a user's tokens are secure even if their participating node is compromised. Deleting the participation and ephemeral keys after they are used ensures that the blockchain is forward-secure and cannot be compromised by attacks on old blocks using old keys.
The likelihood of being selected for this role depends on the amount of online ALGO stake the account has. However, you do not receive any rewards for participating in consensus.
To participate in consensus with your Liquid Governance escrow, you can follow the subsequent steps.
If you have invalid participation keys and no longer want to participate in consensus, it's important to mark your account offline to maintain network integrity. Marking an account offline requires an offline key registration transaction. Register the account offline by using the UI and selecting the "Consensus" button beside "Your Commitment Gx". Alternatively you can use this method described in our SDK, which must be called by the escrow owner.
Keep in mind that at the end of each governance period, the ALGOs in a user's escrow will be transferred to a common pool. The gALGO can then be burnt, allowing the ALGOs to be retrieved and recommitted for the next period.
You will be able to continue using the same escrow and keys between periods because the user's escrow remains the same between governance periods.
Last modified 1mo ago