Our tokenomics paper outlines AirDAO's vision for future products, establishes AirDAO as a community-driven layer one blockchain, sets in motion the plan for a deflationary AMB token supply, and more.
Get a PDF of AirDAO Tokenomics:
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Learn more about the Bond Marketplace:
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AMB is the native token of the AirDAO ecosystem and powers the AirDAO blockchain—a fast, powerful, and ultra-secure Layer-1 network. AirDAO Tokenomics lays out the changes coming to AirDAO throughout 2023, establishes AirDAO as a DAO-governed layer one project, sets in motion the plan for a deflationary AMB token supply, and ensures the stability of the network for the long term with an upgraded rewards structure.
MEDIUM OF EXCHANGE
The first role of the AMB token within AirDAO’s ecosystem is as the network’s native token. AMB serves as the medium of exchange within AirDAO and is used for the gas necessary to execute on-chain transactions.
The second role of the AMB token is to ensure the operation of AirDAO’s blockchain via its staking in validator nodes—the node class responsible for verifying, confirming, and executing every transaction. All nodes on the network receive AMB rewards for the successful performance of their duties, making AMB the basis of AirDAO’s rewards structure.
The third upcoming role of the AMB token within AirDAO is facilitating DAO governance. Users will be able to lock their AMB to receive voting power in the form of vote-escrowed AMB tokens (veAMB). These veAMB will be used to vote on proposals within the DAO, entitling participants to earn a share of AirDAO revenue which will be paid out quarterly. More specifics regarding this role can be found in the “Voting” section.
While AMB, as a base-layer asset, is sufficiently versatile to fill the majority of the three roles mentioned earlier, three types of derivative tokens may be either necessary or desirable to create more flexibility and value for the AirDAO ecosystem.SYNTHETIC AMB (sAMB)Synthetic AMB is AMB that has been placed into a wrapper—a type of digital vault that enables its use on other blockchains. Users can transfer their native AMB to Ethereum (ETH) and BNB Smart Chain (BSC) via the AirDAO Bridge, where it is wrapped to sAMB, securely stored, and made available for use on those other networks. AirDAO will expand the bridge to support and integrate with other major layer-one blockchains and provide sAMB liquidity to other layer-one blockchains.
VESTED AMB (vAMB)
Users that stake AMB in validator nodes receive block rewards for providing assets and services to the network. To incentivize node operators’ reliability, they will receive (25 + n)% of the rewards immediately at the first reward payout date, with n representing the number of completed 250,000 block staking epochs. (100 - (25 + n))% will be vested in the form of vAMB bonds, with every epoch staked increasing n by one (the first epoch will begin at n = 0).
vAMB bonds will be tradable on the AirDAO Bond Market for various crypto assets.
VOTE-ESCROWED AMB (veAMB)
Users will obtain vote-escrowed AMB tokens by locking up AMB for a specified time. veAMB will not be tradable, and the underlying AMB will be inaccessible until the lockup period ends. In exchange for the lockup, veAMB gives users access to voting on proposals and governance participation and also allows actively engaged users to share in a rewards pool—including generated revenue, trading fees, and emissions.
Requiring ecosystem participants to allocate at least a portion of their AMB holdings towards either trading or actively participating in governance ensures that voters are both engaged and have a vested interest in the success of AirDAO while rewarding them for their active participation in governance. Vote-locked AMB also helps prevent larger parties from buying a significant amount of AMB to influence a vote and limits voting rights to committed and active ecosystem participants.
6.5b MAX SUPPLY
AirDAO will institute a hard cap on the AMB maximum supply at 6.5 billion AMB tokens.
Of these, approximately 1.5 billion AMB tokens are currently in circulation or staked in AirDAO’s network of nodes. The tokens needed for specified use cases, as detailed later, will be generated at once so as not to have an ongoing inflationary effect on the supply. In line with AirDAO’s commitment to transparency, the generated tokens will be designated into smart contracts and/or multi-signature wallet addresses so the AirDAO community can verify the AMB within them.
HARD CAP BREAKDOWN
1.5b CURRENT TOTAL
There are currently ~1.5 billion AMB tokens that are either circulating or staked in AirDAO’s network of nodes. The subsequent allocations are divided according to specific use cases, each with an unlock schedule governed by smart contracts and/or multi-signature wallets.
1.8b COMMUNITY REWARDS
1.8 billion AMB tokens are reserved for Community Rewards. Community Rewards will be distributed automatically by smart contract over ten or more years to validation providers. This allocation also accounts for rewards given directly to the community and users of future AirDAO products, features, and education.
0.85b TEAM INCENTIVES
0.85 billion AMB is reserved for team incentives over ten or more years and is subject to a multi-year vesting schedule. This constitutes the allocation for all current and future team members and aligns team interests with the objectives of AirDAO; any AMB allocated to prospective team members will be returned to the Team Incentives allocation if they leave AirDAO.
1.5b FOR INVESTORS
1.5 billion AMB is allocated for investors—including existing deals payouts—and is subject to a multiyear vesting schedule. This will secure sustainable working capital for AirDAO long-term and allow it to achieve self-sufficiency.
0.85b ECOSYSTEM FUNDING
0.85 billion AMB tokens are reserved for the AirDAO Ecosystem Fund, a pool to incentivize development in the AirDAO ecosystem.
The Ecosystem Fund will be under the management of the AirDAO council, with a majority approval on a multi-signature wallet necessary to deploy capital to ecosystem partners.
Ecosystem Fund tokens are locked indefinitely, with the community-owned DAO deciding when and how to use the funds.
THREE TYPES OF STAKING:
- VALIDATOR STAKING: Individual validator nodes.
- LOCKED STAKING: Pooled validator staking with a delay for on and off-boarding.
- LIQUID STAKING: Fully liquid validator staking without delays in offboarding.
To ensure the stability of the network, onboarding and offboarding of validator nodes will be delayed by an epoch of 250,000 blocks or roughly 15 days. Delaying onboarding and offboarding prevents large-scale shifts in the number of active nodes, decreasing the possibility of security issues. At the start, only the top 148 nodes will operate at a time to ensure that nodes can sync, while other nodes are placed in a queue to wait for their turn to participate in network validation. The community can decide the number of nodes at any time via DAO governance.
A new block is added to AirDAO’s blockchain approximately every 5.7 seconds, and every new block provides validator nodes with rewards for providing services and assets to the network.
The block rewards will be issued with an elastic rate—calculated every epoch (250000 blocks)—based on the percentage of (stake/circulation*) network locked (locked = cumulative stake of nodes + vested tokens), with higher percentages locked increasing the rewards per block.
- Circulating supply = AMB that is not vested in multi-sig wallets.
The AirDAO team has a goal of a net-deflationary supply for the AMB token and will implement several burning mechanisms to achieve this. One mechanism will be an update to the design of the transaction fees, splitting them into three possible parts.
TRANSACTION FEE TYPES
70% of the Base Fee goes to validators, and 30% goes to the AirDAO Treasury for revenue sharing amongst veAMB holders or is burned. The Base Fee will initially be set at 1 AMB and subject to a community vote.
Extra Fee is an optional additional fee to speed up transactions. The Extra Fee goes either to the AirDAO Treasury for revenue sharing among veAMB holders or is burned.
The AirDAO community will determine via DAO proposal whether or not the 30% of the Base Fee and the entirety of the Extra Fee are burned or distributed among veAMB holders.
CONTRACT CALL FEE
A variable fee based on the contract deployer with the fee going to the deployer address or assigned to an NFT, making the contract profit transferable. The Contract Call Fee is an optional fee that contract deployers can set to incentivize developers to generate activity on the chain.
In the future, AirDAO will spin up sub-DAOs on the AirDAO blockchain. These sub-DAOs will have fee accrual mechanisms, with a percentage sent back to AirDAO treasury for the veAMB holders to decide on its usage (burning or redistributing). Currently, 20% of subDAO gross revenue is shared back to AirDAO—such as DEX and Bridge transaction fees. A portion or entirety of penalties that a subDAO product user accrues can also be burned; for example, the penalty of an early withdrawal from a lending protocol.
Governance-related penalties will also burn AMB. It will take a two-week epoch for a user to receive AMB after unlocking veAMB, and during this period, the proportional amount of profits and rewards accrued will be burned. Any other potential penalties a user may incur due to misconduct during the governance process will also be burned.
AirDAO will institute token-based voting as a critical component of DAO governance. Users will be able to lock their AMB and, in exchange, receive votes in the form of veAMB tokens—which will be used to participate in AirDAO governance by voting on on-chain proposals. The voting power a veAMB holder has is calculated as a function of time, and the amount of AMB staked. One AMB token locked into veAMB equals one vote, plus an additional vote acquired linearly over the course of each year (1/365th per day), with voting power accumulation stopping after 20 years.
As an incentive to engage in the DAO, veAMB holders participating in governance activities will be eligible to earn a share of the revenue from the AirDAO Treasury. This DAO profit generated through product-market fit will be paid quarterly, with the treasury’s revenue generated through transaction fees and profit-sharing from AirDAO dApps and products.
After initiating a unlock, veAMB holders will be subject to a waiting period of a two-week epoch before receiving their previously-locked AMB. There is no penalty for unlocking; however, all unclaimed profit and revenue share accrued during this waiting period will be burned. veAMB unlockers will also forfeit all accumulated voting power and reward weight.
DECENTRALIZATION OF VOTING POWER
Only a handful of on-chain wallets hold more than 0.1% of the total AMB supply, meaning the voting power is decentralized.
DECENTRALIZATION OF VALIDATORS
Validator nodes are distributed globally, with more than 100 individual node operators.
DECENTRALIZATION OF COMMUNITY
AirDAO has seen significant growth in its global community since its launch, with a focus on Turkey, Africa, Latin America, and Southeast Asia.
Progressively transitioning elements of content and social outreach to proven Ambassador Program members and recruiting capable new members will grow engagement and involvement in AirDAO.
AirDAO will transparently conduct a three-stage voting process to elect two community members as keyholders of AirDAO’s layer one multi-signature wallets. The voting process will consist of a round for the community to nominate candidates, a second round of community voting to narrow down candidates, then Snapshot for the final vote.
EDUCATIONAL CONTENT (ONGOING)
AirDAO will continue producing educational content through AirDAO Academy and host events to ensure community members can make informed governance decisions.
DAO VOTE ON TOKENOMICS
The AirDAO community will decide whether the new, upgraded tokenomics are implemented via DAO governance. AirDAO will conduct the transparent voting process using Snapshot.
The AirDAO team will place AirDAO’s funds into publicly-identified wallets safeguarded by smart contracts and/or secure multisignature controls, allowing the AirDAO community to view where AirDAO’s funds are located and if/when transactions occur.
PROCEDURAL DAO VOTING
AirDAO will establish a regular voting schedule and a streamlined process for doing so.
These first rounds of proposals and votes will be essential to decentralizing the governance process.
The AirDAO team will build a specialized voting and rewards system for AirDAO that rewards contributors to the governance process and allows them to accrue more votes over time.
TRANSITION TO PERMISSIONLESS VALIDATORS
The AirDAO team will update the validator node infrastructure to be permissionless so that anyone can onboard at any time without needing the approval of a central authority.
50%+ COMMUNITY MULTISIGNATURE CONTROL
AirDAO’s long-term objective is to be wholly community-owned and operated and for the AirDAO community to attain over 50% of multisignature control for AirDAO’s operations over time.
50%+ COMMUNITY TOKEN OWNERSHIP
The community will maintain majority control over the AMB token, which will keep governance sufficiently decentralized so that the system of checks and balances in the structure of the DAO operates as intended.
Through the addition of new AirDAO products, partner teams, community members, and users, AirDAO will become a completely autonomous entity in the future, sustained by generated revenue.
The AirDAO Bond Marketplace will feature the offering of vested AMB (vAMB) in the form of bonds. These bonds will be available for redemption through AirDAO at the time of their expiry and will also be tradable pre-expiry on the open market. There will be three primary types of bonds:
BONDS FOR VALIDATOR REWARDS
As noted above, nodes will receive a percentage of their rewards immediately. To calculate this percentage, “n” will represent the number of 250,000-block epochs a node has been online.
(25 + n)% of rewards will be available immediately once a new node has been onboarded and completed its first epoch with the initial value of n = 0. The remainder of rewards, which is equal to (100 - (25 + n))%, will be issued in the form of a vAMB bond redeemable for AMB at a later date. Each successive 250,000-block epoch that a user continues to operate their node will increase n by one until 100% of rewards are available immediately on payout, which will occur after a stake duration of three years. This duration of the stake will be credited retroactively for existing validator nodes.
BONDS FOR LIQUIDITY
vAMB bonds will be offered for purchase at a relative discount to AMB market price based on the length of the vesting period in exchange for other liquidity or single-asset tokens. This will build a diversified treasury for AirDAO and build up liquidity to be deployed for sAMB (synthetic or “wrapped” AMB) on Ethereum and BNB Chain.
BONDS FOR NEW PRODUCTS
Users will be able to bond either their AMB or specific AMB liquidity tokens to receive assets issued by new projects that partner with AirDAO and wish to launch their tokens on AirDAO’s blockchain. There will also be provisions for grants issued by the DAO that can be bonded to these projects’ assets to create an initial LP.
The AirDAO treasury will receive a diversified income from multiple revenue streams. The Treasury can receive 30% of all layer one transaction base fees and will also benefit from subDAO revenue sharing—receiving between 10-20% of all revenue from Bridge, DEX, DAO Tools, Stablecoin, Bond Marketplace, and Staking.
The treasury will also receive tokens from subDAOs that the AirDAO Ecosystem Fund provides initial investment to. The dApp Marketplace will also provide additional income, as dApps that launch on the marketplace will share 5-20% of their revenue with the treasury. Also, yield generated from the Ecosystem Fund providing liquidity to DEXs will add another source of revenue for the AirDAO Treasury.
veAMB holders participating in governance activities will be eligible to earn a share of the revenue from the AirDAO Treasury. The community can decide through DAO governance more streams of revenue for the AirDAO Treasury, for example, they can vote for the AirDAO Treasury to receive a portion of the Base fee and the full Extra fee or if those fees are burned. The community will also decide whether Bridge fees are sent to the Treasury to provide it with multiple revenue streams.
- AMB TOKEN
- MEDIUM OF EXCHANGE
- GOVERNANCE TOKEN
- DERIVATIVE TOKENS
- VESTED AMB (vAMB)
- VOTE-ESCROWED AMB (veAMB)
- vAMB REWARDS
- TOKEN DISTRIBUTION
- 6.5b MAX SUPPLY
- HARD CAP BREAKDOWN
- 1.5b CURRENT TOTAL
- 1.8b COMMUNITY REWARDS
- 0.85b TEAM INCENTIVES
- 1.5b FOR INVESTORS
- 0.85b ECOSYSTEM FUNDING
- REWARDS STRUCTURE
- BLOCK REWARDS
- BURNING MECHANISMS
- TRANSACTION FEE TYPES
- BASE FEE
- EXTRA FEE
- CONTRACT CALL FEE
- ECOSYSTEM BURNING
- GOVERNANCE BURNING
- DECENTRALIZATION ROADMAP
- DECENTRALIZATION OF VOTING POWER
- DECENTRALIZATION OF VALIDATORS
- DECENTRALIZATION OF COMMUNITY
- PLANNED (SHORT-TERM)
- AMBASSADOR PROGRAM
- DAO ELECTIONS
- EDUCATIONAL CONTENT (ONGOING)
- DAO VOTE ON TOKENOMICS
- PLANNED (MEDIUM-TERM)
- WALLET TRANSPARENCY
- PROCEDURAL DAO VOTING
- REVENUE SHARING
- TRANSITION TO PERMISSIONLESS VALIDATORS
- PLANNED (LONG-TERM)
- 50%+ COMMUNITY MULTISIGNATURE CONTROL
- 50%+ COMMUNITY TOKEN OWNERSHIP
- AIRDAO SELF-SUSTAINABILITY
- BOND MARKETPLACE
- BONDS FOR VALIDATOR REWARDS
- BONDS FOR LIQUIDITY
- BONDS FOR NEW PRODUCTS
- TREASURY INCOME