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NodeNFTs

Raffle Process

Holders of the $ADS tokens can enter the raffle to be selected to operate an Alkimi Node. Here are links to the smart contracts that facilitate Alkimi Node operations

Raffle ticket smart contract

Raffle Tickets

Raffle tickets are minted as NFTs on Polygon. Each raffle ticket gives the holder a chance to win a raffle prize. The prize could be a chance to claim a Node NFT by paying the necessary collateral. Other prizes can be won as part of the Alkimi Raffle process.

Raffle ticket draw smart contract (using Chainlink VRF)

Alkimi Raffle is conducted on-chain and uses Chainlink’s Verifiable Random Function (VRF) to run the raffle.

Results of the raffle can be seen on-chain. Each winning raffle ticket is mutated to denote the prize that the ticket has won.

For the first round of the raffle, an additional restriction was introduced to prevent users from winning more than one Node NFT.

Node NFT smart contract

NodeNFT Features

The NodeNFT smart contract manages the minting, tracking and management of various Node NFTs. Below are some salient features of the Node NFT smart contract:

  1. The smart contract mints NFTs for various nodes, currently the Master and Guardian NodeNFTs, and any future NFTs types.
  2. For each node type, the contract admin shall be able to set the collateral associated with the node type and the total supply of NFT for each type.
  3. Users can see the number of NFTs of each type that have been minted.
  4. By setting a collateral value to each Node NFT type, Alkimi can associate a $ value in ADS tokens to each NFT. This value will be used to reclaim the collateral (using a separate smart contract) by surrendering the NFT.
  5. Allows for the slashing of bad actors and unreliable Nodes via changes to the metadata of the Node NFT.
  6. The smart contract also supports logging essential events to track the usage of the smart contract.

NodeNFT Collateral

$ADS tokens deposited for the Node NFT Collateral are held in a wallet;

Node Operators can retrieve their collateral by interacting with the smart contract and surrendering their NodeNFT in exchange for the collateral they have provided.

Node Rewards Redemption

It is mandatory for users intending to operate a node to KYC on Alkimi Labs.

Alkimi Labs platform will distribute all node rewards to KYC’d users in $ADS tokens. This may exclude certain sanctioned countries.

Queries and Transactions

Programmatic ad auctions consist of two distinct stages: the Query and the Transaction.

  • Query - Queries are advertisers submitting bids in an auction hosted for a particular website, IP address, cookie or relevant context on a page.
  • Transaction - A query becomes a transaction if the bid within the query successfully wins the auction and an ad is rendered on the publisher's website.

Once a Query becomes a Transaction, a monetary value is associated with the Transaction, which is used to yield rewards to both Node Operators and Liquidity Providers.

Queries Per Second (QPS)

A Cluster of Nodes provides up to 7,000 Queries per second.

The initial tranche of Node Operators will support a maximum of 35,000 queries every second via 5 clusters.

The number of transactions determines the number of Nodes required. Once the percentage of Transactions is within 10% of the total Queries, Alkimi will be required to onboard a new tranche of Node Operators.

For Tranche 1, Alkimi will onboard 5 Clusters with the capacity to support 90bn queries per month, and future tranches will support additional transaction requirements.

Each Node will earn its share of the rewards (outlined below). Nodes will help strengthen the network's decentralisation, making it more robust while maintaining high levels of transactional bandwidth.

Node Operator Rewards

Any business wishing to use the programmatic exchange will need to pay a fee as a percentage of the value of the transaction.

The most basic transaction involving standard display will be at the lowest fee - percentage fees will increase as the bandwidth required increases, such as for video formats.

Node Operators and Liquidity Providers will share 100% of the fees generated by Alkimi. These fees include 100% of the AlEx fees outlined above plus the fees from secondary income streams.

All fees will be invoiced and received in FIAT currency. Alkimi will convert this to USDT.

Node Operators Rewards Formula

The share allocated to node operators (NR) will be calculated by the equation;


NR(n) = sin(n/50)


where n is derived from the number of Master and Guardian nodes.

If NR = 0.1 then 10% of all the fees generated by Alkimi will be used to buy back $ADS with USDT. (The maximum value for NR is 1).

These $ADS will be distributed to Node Operators.

Rewards Calculations

The following section outlines how the fees will be divided between Node Operators and Liquidity Providers.

While the number of nodes is low, the distribution favours liquidity providers since the proportion of tokens used for liquidity is higher.

If all the tokens were used to collateralise nodes, 100% of the rewards would go to node operators.

(Graph representing the allocation to Node Rewards and LP rewards as node number increases)

The total income share (TI) from the various streams outlined above has a maximal value of 1 (representing 100% share).

The Liquidity Provider reward fraction is defined as LP. n = number of Guardian nodes + 4*number of Master nodes The fraction allocated to Node rewards (NR) is calculated by the equation:

NR(n) = sin(n/50)

Where NR is between 0 & 1 with 1 representing a 100% share.

Since,

TI = 1 = NR + LP

when NR = 0.8 Node Operators will receive 80% and Liquidity Providers will receive 20% of all fees.

n = will be set by Alkimi based on throughput requirements.

Due to the fixed supply of $ADS the current maximum value of n = 5000;

(1000 Guardian nodes + 1000 Master Nodes *4).

This is equivalent to 250 clusters.

As n increases and the network grows, a larger percentage of the rewards will be distributed to Node operators and a smaller percentage to Liquidity Providers

Examples

n = 50 (10 Master and 10 Guardian nodes) then NR = 1.74% : LP = 98.26%

n = 2500 (500 Master and 500 Guardian nodes) then NR = 76.6% : LP = 23.4%

The current limit on the number of node clusters (4 Master and 4 Guardian nodes) based on the circulating supply is 250 node clusters.

Therefore, the maximum TPS at current collateral requirements will be 1,750,000 QPS.

Alkimi retains the right to amend the $ADS collateral requirements should further nodes be required. This will likely happen as the exchange captures a larger digital ad market share.

Node Selection Criteria

Given the exponential growth in AlEx users and corresponding increased bandwidth requirements, more node operators are now required,

n = 60 (12 Guardians + 12 Masters*4).

Therefore, Alkimi will onboard 24 nodes (12 Guardian and 12 Master nodes) in phase 1 to meet these bandwidth requirements.

In the future, where Alkimi sets (n) according to bandwidth requirements, it is possible that more nodes will exist on the network than accounted for by n.

Under such circumstances, rewards meant for 100 (for example) would be diluted between 140 node operators.

The reward mechanism de-incentivises excess node operation, and market forces would help to return the number of node operators to 100, maintaining network efficiency.

Alkimi will employ selection criteria in the early stages to control node numbers and ensure network security.

Bad actors (nodes) will be unable to redeem their staked $ADS, or their nodes will be ineligible to validate transactions.

Node selection criteria. In the future, for every four nodes required, three will be selected by raffle and one by auction.

Long-Term Holders

  • Hold an Alex the Alkimist NFT
  • Bid $ADS (all tokens redeemable when converting the NodeNFT back to $ADS)
  • Bid >50k for a Guardian node. These will be locked in exchange for a GuardianNodeNFT.
  • Bid >200k for a Master node. These will be locked in exchange for a MasterNodeNFT.

New Holders

  • Lottery
  • Enter the ERC20 address into the draw event.
  • Multipliers

Node Operation Costs

The collateral required to run each node and the associated serving costs are outlined in the table below:

Node TypeCollateral Required/Operator($ADS)Rewards (% of Total)Cost of VM/Node NFT (est.)
Master200,00080%$100
Guardian50,00020%$100

The operation of Master and Guardian nodes is via the Labs platform.

The Node operators must, therefore, pay for their virtual machine directly with their chosen provider (currently available using AWS, Google Cloud and Digital Ocean).

Each cluster locks up 1,000,000 $ADS (4 Master Nodes and 4 Guardian Nodes).

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