Skip to main content

Staking and Governance

Alto Governance and Staking (AGS) is the mechanism for ALTO token holders to participate in protocol governance and receive a share of protocol-generated revenue. Staking ALTO grants governance power and eligibility for fee distribution.

How staking works​

The Alto staking system is adaptive, with lock durations that adjust based on participation across different staking pools known as containers. ALTO tokens are locked into one of several available containers, with up to 16 active at any time.

The system operates in fixed time periods called epochs. At the end of each epoch, the protocol analyzes the Total Value Locked (TVL) of each container and rebalances the required lock durations. If a container’s TVL is high relative to others, its required lock duration will gradually increase. If it’s low relative to others, its lock duration will decrease. This relative adjustment helps distribute participation more evenly across containers over time.

Voting power​

Voting power is not a 1:1 function of staked tokens. Each container has a multiplier that weights the voting power of the ALTO locked within it. Containers with longer lock durations generally have higher multipliers, granting more voting power per ALTO. An account's total voting power is the sum of the voting power from all its staking positions across all containers.

Protocol Fees and Rewards Distribution​

A staked position is entitled to a share of protocol revenue proportional to its voting power for the duration of the lock. These fees are generated from several sources:

  • The opening fee on all new borrows.
  • Interest paid by borrowers in Mint Markets.
  • A portion of the fees collected during liquidations.

Managing Staked Positions​

The system supports several functions for managing staked positions:

  • Relock: Allows for an expired position to be relocked in the same container without withdrawal and redeposit.
  • Extend: Increases the lock duration of an active position to match the container's current setting.
  • Add to Position: Allows for locking additional ALTO in an existing position, which also extends its lock duration.

Safety and Emergency Measures​

For extreme circumstances, the protocol has two administrative modes to protect staked funds:

  • Pause Mode: A reversible, temporary freeze on all staking-related actions, including locking, unlocking, and voting. This mode is designed for critical situations and allows the contract owner to perform an emergency sweep of all locked tokens.
  • Rescue Mode: An irreversible measure that allows all stakers, including those with active locks, to withdraw their funds immediately. This mode is designed for non-critical issues where users need to exit their positions. Once activated, the contract cannot be returned to its normal state and must be redeployed.

Summary: Locking ALTO in duration-based containers grants voting power and a share of protocol fees. Durations adapt by epoch based on participation, multipliers set vote weight per container, and emergency modes provide clear procedures when abnormal conditions occur.