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Fair Models

By
Bithiah Koshy
January 17, 2025
5 min read
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AO Token’s Fair Launch 

The AO token introduced a straightforward distribution model that focuses on fairness and community participation. It splits its 21 million tokens into two parts: 36% goes to people who hold Arweave (AR) tokens, while 64% is given to users who help grow the network by moving assets into it from other blockchains. 

Alignment of Incentives

Developers are motivated to build applications because they have access to real liquidity from bridged assets. Users are encouraged to provide assets because they earn tokens while supporting projects they believe in. The initial non-transferable period until 15% of tokens are minted (about 6-7 months) further ensures participants are committed to long-term growth rather than short-term gains.

By focusing on genuine utility and community participation rather than speculative interest, AO's Fair Launch model creates a more resilient ecosystem that can sustain growth over time and fulfill the promise of true decentralization.

Many Projects in the ecosystem are following AO’s footsteps and employing the same 100% Community launch model for their tokens.

How Projects Raise Funds or Liquidate Tokens Without Pre-Allocations

Veritas enables projects with a fair launch model that are seeking funding , instead of traditional token allocations, funding happens organically through community participation and value creation. When users stake $AOEth or any other bridged tokens into projects they believe in, they receive project tokens in return, which are generated through actual usage rather than pre-mined allocations. All while projects receive AO yield generated by these bridged assets. 

The community can claim these community owned tokens by actively participating! By staking their $AOEth, they contribute to project development. Veritas also provides detailed On-Chain and Off-Chain analysis of projects in the form of both textual and graphical data, helping users stay informed. Gamification of the platform helps incentivize users such as maintaining usage streaks, engaging in quests and predicting success of project milestones, collecting assets and earning positions on leaderboards. Checkout Veritas for more information.

What is Fair Forks?

Fair Forks aligns incentives by creating a win-win structure where successful protocol improvements reward everyone involved. Developers get token rewards for building useful upgrades, token holders can profit by backing good changes early through market trading, and the whole community benefits from protocol improvements.

This is different from traditional governance where interests often conflict. Instead of fighting over changes, participants are motivated to work together to increase the protocol's value. The system uses market prices as a way to measure if changes are actually valuable, rather than relying on voting power or contentious forks.

Implementations

Tokenization of Code Repos With Fair Forks

Fair Forks is a governance mechanism that allows blockchain protocols to evolve through market-driven decisions rather than formal voting. When developers want to improve a protocol, they can create a "fair fork" by duplicating the entire network state (including all user balances and data) and implementing their proposed changes. Rather than forcing users to accept changes, Fair Forks lets the market decide which version is better. People can freely choose to support either the original network or the fork by buying or selling the respective tokens.

On Protocol.Land, developers can tokenize their open source code. Protocol.Land employs a bonding curve mechanism for token creation, where the token price systematically increases through mathematical calculations as the supply expands.  The bonding curve's mathematical structure naturally rewards early participation through better pricing, achieving fair token distribution through algorithmic mechanisms rather than arbitrary pre-allocations. For more information, read guide to tokenization on Protocol.Land.

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