ALK Token Economics
ALK is Alkemi Network’s native utility token. Based on the ERC-20 standard, ALK token’s primary utilities are network governance and incentive for network participation.
Revision Note (Sep 7, 2021): We have amended this article with an updated diagram to reflect the revised ALK reward/block calculation from 8.323820396 to 7.380453520. This revision will be in effect for TGE and is a result of an adjustment to the underlying Ethereum block speed assumption, from 15 secs/block to 13.3 secs/block per our smart contract auditor Quantstamp’s recommendation. The audit report delivery date is also updated from end of July to September 2021.
What makes ALK Token different
Alkemi is the first decentralized liquidity network to facilitate both permissioned (Verified) and permissionless (Open) liquidity pools governed by one utility token.
The dual-governance mechanism signifies our belief that we are rapidly moving toward an inclusive future where individual and institutional participants co-exist within the same network, with a shared DeFi ethos.
In other words: There is no retail DeFi or institutional DeFi. There are simply different users with different needs. And with Alkemi Network, those needs are addressed with two different pools, on one platform.
“Alkemi Network represents an ongoing transition between open-finance and DeFi today. The nature of money in the future will simultaneously be institutionalized and decentralized. Our investment in Alkemi Network is a bet on this future. ”
— Shiliang Tang, CIO of LedgerPrime
Governing two pools with one token
Earn Verified is a permissioned pool that is designed to fulfill the professional needs of institutional users. This pool meets the trusted counterparty requirements of institutions through a bank-grade on-boarding and allowlisting process.
Earn Open will be a permissionless pool with exactly the same asset markets as Earn Verified, but without the allowlisting process. It is open in the sense that anyone can participate with their wallets without any prerequisites.
Unified Governance
Verified and Earn pools co-exist in the Alkemi Network and will be governed by the community as a whole. ALK holders will be able to propose and vote on decisions concerning protocol parameters on both pools, including:
- Setting interest rate models and base fee structures (e.g. origination fees)
- Administering asset markets (e.g. add, remove, lock, unlock)
- Updating protocol contracts and risk parameters (e.g. utilization limits, collateral ratios)
- Amending admin roles (e.g. Liquidators, KYC admin)
A shared incentive: ALK rewards for liquidity
Alkemi Earn Verified and Open pools share the same incentive mechanism: Alkemi Network’s Liquidity Mining Program that distributes ALK rewards to all lenders and borrowers. The underlying mechanics of the program have been adapted from Compound’s successful liquidity incentive program, who we regard as a DeFi pioneer.
With the Liquidity Mining Program, 35% of total ALK supply (70 million tokens) will be distributed to users on both pools over 4 years, commensurate with their lending and borrowing activity, accounted for per Ethereum block.
35% is a big commitment. It is a vehicle for distributing ALK to all participants, individuals and institutions alike. The more you lend and borrow on Earn pools, the more you get rewarded with ALK. With more ALK, network participants have more voting power and therefore more say in protocol decisions.
ALK Distribution
What’s next: The summer of Alkemi
Alkemi Earn smart contracts are currently being audited by the leading blockchain security firm Quantstamp. The target delivery date for the audit report is September 2021. Upon successful completion of the audit, here is what’s next through the remainder of Summer 2021:
- Earn Open Permissionless Pool Launch
- DAO establishment and governance kick-off
- ALK token issuance and initial distribution
- Initiation of the Liquidity Mining Program rewards
It will certainly be an exciting summer for Alkemists!
Ways to participate
💰 Interested in becoming a lender/borrower? Email us
🌱 Running local communities? Become an Alkemi Network Advocate
Join the Alkemi community
Disclaimer:
This post is for information and discussion purposes only and remains subject to change. Alkemi AI Inc., Alkemi Foundation and their respective affiliates (collectively, “Alkemi”) shall have no liability, and disclaim all liability, for losses or damages (whether direct, indirect, consequential or any other kind of loss or damage) arising out of the use, reference to, or reliance on the contents of this presentation, even if Alkemi has been advised of the possibility or likelihood of the relevant use, reference, or reliance or of damages arising therefrom. Without limiting the foregoing, neither this post nor the information contained in it shall constitute or form part of, and should not be construed as, an offer for sale or subscription for, or solicitation of any offer to buy or subscribe for, tokens issued by any Alkemi entity or any products or services offered by any Alkemi entity.
This post contains certain forward-looking statements or information (collectively “forward-looking statements”) that relate to Alkemi’s current expectations of future events. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “aim”, “estimate”, “intend”, “plan”, “seek”, “believe”, “potential”, “continue”, “is/are likely to” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Alkemi has based these forward-looking statements on current projections about future events and trends that Alkemi believes are relevant to the matters described in this post. Forward-looking statements are based on certain assumptions and analysis made by Alkemi and its personnel in light of experience and perception of historical trends, current conditions and expected future developments and other factors that Alkemi believes are appropriate, and all such statements are subject to risks and uncertainties. Although the forward-looking statements contained in this post are based upon what Alkemi believes are reasonable assumptions, there are risks, uncertainties, assumptions, and other factors which could cause actual results, performances, achievements and/or experiences to differ materially from the expectations expressed, implied, or perceived in forward-looking statements. Given such risks, readers of this post are cautioned not to place undue reliance on these forward-looking statements.
