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What is liquid governance?
Liquid governance solves the capital inefficiencies present in the current Algorand Governance model, where participating ALGO must remain in a user’s account to be eligible for rewards, eliminating the possibility for it to be used as collateral in Algorand DeFi platforms, or simply transferred without forgoing governance rewards. On Hone, users can continue to capture governance reward yield while using their principal ALGO value through a tokenized version of this yield-generating ALGO called dALGO. dALGO can then be used as collateral on DeFi lending and stablecoin platforms, such as Folks Finance and xBacked, providing yield-bearing collateral that will continue to appreciate in value relative to just holding ALGO.

How does this work?

Users can bring the their ALGO to Hone and stake it to receive dALGO. The Staking Pool will then participate in Algorand Governance on behalf of the stakers. After the governance period has finished, dALGO holders can either return to Hone and unstake their ALGO and rewards, or continue to hold on to their dALGO, rolling their rewards over to the next governance period, compounding rewards after each governance period.
💡 Note: the exchange rate of ALGO to dALGO will change over time as governance rewards are deposited into the Staking Pool.
This makes dALGO the ideal yield-bearing collateral as it requires no ongoing governance-related maintenance, such as registration or voting; dALGO holders can come back between any future governance period and unstake their ALGO and any rewards generated since they staked their ALGO.

Can I still vote in governance? Who controls my vote?

No, unfortunately due to the liquid nature of dALGO—where anyone who possesses dALGO is entitled to the underlying ALGO—there is no way to avoid double-voting, therefore the Staking Pool votes with the lead of the Algorand Foundation. In the future, HONE token-holders will be able to stake their tokens and vote on behalf of the Staking Pool.
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How does this work?
Can I still vote in governance? Who controls my vote?