Allora Tokenomics
The Allora token (ALLO) is minted by the Allora Network to facilitate the exchange of value by network participants.
Pay-What-You-Want (PWYW)
The Allora Network incorporates a Pay-What-You-Want (PWYW) model to allow token holders the flexibility to choose the fee they pay for inferences generated by the network. This model fosters inclusivity and accessibility by enabling participants to determine the value they assign to the service.
Token holders have the autonomy to decide the amount of ALLO they wish to pay for a given inference, which encourages token holders to contribute to the network's ecosystem according to their perceived value of the service.
Important Note: If participants choose to pay zero fees for a particular topic, the weight of that topic tends to zero. As a result, participants within that topic receive no rewards, and the token emission will be redistributed over other topics. This mechanism ensures that topics with no fee payments do not sustain themselves, driving healthy competition and price discovery across the network.
Flexible price discovery across topics is a less opinionated method that allows the market to reach an agreed-upon price through natural negotiation and market dynamics.
Token Emissions
Bitcoin-like Emission Schedule
- Emissions decrease over time, similar to Bitcoin's halving events.
- Creates a transparent and stable token release schedule.
- Ensures continuous rewards for participants in a finite-supply framework.
Stable APY around Token Unlocks
- Maintains a stable annual percentage yield (APY) for staked tokens, even during unlock periods.
- Reduces the incentive to sell large quantities of tokens during major unlocks, stabilizing token value.
- Promotes long-term staking and active participation in the network by ensuring predictable returns.
ALLO Token Utility
Purchasing Inferences
- ALLO tokens can be used to buy inferences generated by the network.
- Uses a PWYW model where consumers choose the ALLO fee for an inference.
Creating or Participating in Topics
- ALLO tokens are paid for creating topics or participating in the network as a worker.
- ALLO tokens can be used to pay the registration fee for workers and reputers to register to a topic.
Staking and Delegating Stake
- Reputers and network validators use ALLO tokens to stake.
- Token holders can delegate stake to a reputer or network validator.
- Staking reputers, network validators, and delegating token holders receive rewards in ALLO.
Reward Distribution
The network uses ALLO tokens to pay out rewards to participants. Participant rewards are explained in-depth in the Consensus Layer.