New, Long Term Algo Dynamics Model

The Algorand Foundation has today proposed a revised, long term Algo Dynamics model. Designed to run for a greater than 10-year period- that is up to 2030 and beyond - this new model will focus on programs around ecosystem support, community incentives, and the decentralization of decision making and governance on the Algorand blockchain - a long-held goal of the Algorand community. Central to these programs will be a new community rewards system, benefiting the participants, existing and future, who commit to participate in the governance of the Algorand ecosystem and prove their commitment by locking their Algos for a potentially long term. 

This new rewards system and ecosystem support proposal will be funded by the allocation of previously unassigned funds from within the 10B Algo minted at Genesis, and will be distributed using a new, fully decentralized decision making process. 

1. Community Rewards
2.5B tokens will be initially locked, and allocated toward participation rewards to be  distributed over roughly 10 years. The tokens will be injected into governance reward mechanisms via automatically operating smart contract.

The recipients of these tokens would be those who have agreed to lock tokens in support of governance, in the spirit of Silvio Micali’s Decentralized Governance proposal.

The distribution of these tokens will be achieved within a broader, long term model that is optimized to control inflation and achieve scarcity over time. For more detailed information, please read Massimo Morini’s Algo Dynamics.   

2. Ecosystem Support
1.25B tokens are being allocated for extended ecosystem support and will be locked in a smart contract.  These tokens would be periodically unlocked over a period no faster than 10 years, and with no more than 200M unlocked in any given year.

The unlocking of tokens would occur as part of the overall token distribution plan laid out in Algo Dynamics.

Unlocked tokens can be used to support grants, strategic initiatives and R&D projects, brought forward by the Foundation or by other partnering entities for approval. 

The Foundation’s proposal for allocation of ecosystem support tokens, across different types of entities, is described in Massimo Morini’s Algo Dynamics, and will be implemented with community involvement as proposed by Silvio Micali.

For any tokens unused in a given period, they will be re-locked and set to unlock monthly, following the initial 10 year period.

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