The AlgoFi Vault launches tomorrow, unlocking 3 Billion ALGOs of liquidity in AlgoFoundation Governance. 1) Earn Governance Rewards 2) Borrow against your Vaulted ALGOs 3) Vote on important proposals for Algorand. This is huge for Algorand DeFi!

The Algofi Vault enables users to earn Algorand Foundation Governance Rewards while taking advantage of the Algofi Lending Protocol and earning Aeneas ALGO Rewards.

As discussed in Algorand Governance, governors are eligible for governance rewards if their account:

• Maintains an ALGO balance at least equal to their commitment amount
• Votes on all proposals

This is accomplished through the Algofi Vault -- a unique (1 per user) Algorand Account that the user has control over through the Algofi protocol. This vault account is the same account as the Storage Account for the Algofi lending protocol. The user operates their Algofi Vault via the protocol to supply ALGOs to the Vault, commit those ALGOs to Governance, vote via the Vault, and claim governance rewards from the Vault.ALGOs supplied to the Algofi Vault are called "Vaulted Algos" or vALGOs. In the Algofi Lending Protocol they have the same price and collateral factor as ALGOs. The key difference between vALGOs and ALGOs is that you can participate in Algorand Governance with your vALGOs and borrow against them in the lending protocol, but no user can borrow your vALGOs. Likewise, you cannot borrow another user's vALGOs. Only ALGOs in the main ALGO market can be borrowed.

The key benefit for participating in governance via the Vault is that the user can borrow assets from the Algofi Lending Protocol against their Vaulted ALGOs (vALGOs). Then, as usual, borrowed assets can be used for trading, yield farming, etc. all while the user is earning Governance Rewards on their vALGOs.

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TLDR: HUGE THINGS HAPPENING ON ALGORAND DEFI.

Source: https://docs.algofi.org/vault/tutorial

There are other protocols launching soon as well, such as AlgoGard, and Folks Finance.