The total number of AO tokens is 21 million, which will be distributed 100% fairly. You can earn AO tokens by holding AR in the future.

Original translation: PANews Editorial Department

On June 14, the AO Foundation officially launched the token economics of the decentralized supercomputer AO.

8 Key Facts and Dates for AO Token

• AO is a 100% fair issuance token that follows the Bitcoin economic model.

• AO tokens will be used to secure messaging in their network.

• The minting mechanism will run retroactively starting at 13:00 EST on February 27, 2024 (block 1372724). 100% of AO tokens minted during this period have been vested to Arweave token holders based on their respective balances held every 5 minutes. If you hold AR on an exchange or custodian, you should ask the exchange how to receive the tokens.

• Going forward, one third (33.3%) of AO tokens will be minted to AR token holders based on their ownership every 5 minutes. Two-thirds (66.6%) of AO tokens will be minted in the future to transfer assets into AO to strongly stimulate economic growth.

• The first phase of the bridge contract goes live today. During this pre-bridging phase, users’ tokens will remain securely on their native network while AO tokens will be earned. Once the second phase of the bridge goes live, users will be able to deposit assets into the new bridge contract and use them on AO - while earning rewards. Here users can deposit staked Ethereum (stETH) tokens into an audited pre-bridge contract.

• Transition rewards will begin on June 18, 2024 at 11:00 AM ET.

• Users can withdraw tokens from the pre-bridge at any time, but will only start earning AO once rewards start on June 18th. Rewards are issued every 24 hours.

• AO tokens will remain locked until approximately 15% of the supply is minted. This will happen around February 8, 2025.

Overview: 21 million in total, 100% fair issuance

AO is a 100% fair issuance token modeled after Bitcoin.

Like Bitcoin, the total supply of AO is 21 million tokens, the halving cycle is also 4 years, AO is distributed every 5 minutes, and the monthly distribution is 1.425% of the remaining supply. As of June 13, the inventory of AO was 1.0387 million. This makes them extremely scarce. By comparison, Ethereum has 120 million, Solana has 461 million, and Ripple has 55 billion.

AO’s minting mechanism means that although the number of newly minted tokens will be halved every 4 years, there will not be a sudden “halving event”. Instead, the number of new tokens will decrease slightly each month, resulting in a smooth issuance schedule.

While most token distribution models favor insiders over the community, AO’s model adheres to the principles of fairness and equal access that are at the heart of the crypto revolution. There is no pre-sale or pre-allocation. Instead, the AO token reward mechanism incentivizes two key aspects of a successful ecosystem: economic growth and security of the base layer.

Here’s how it works:

~36% (100% for the first 4 months + 33.3% thereafter) of AO tokens are minted over time by Arweave token holders, whose tokens The coin incentivizes the security of AO’s base layer – Arweave.

Approximately 64% of AO tokens are minted over time to provide external benefits and bring assets into AO to incentivize its economic growth. This creates an extremely powerful incentive to increase liquidity in the ecosystem, creating an economic flywheel.

At the same time, without any token sales, the network funds its own ecosystem development in two ways:

Permissionless ecosystem financing

Enter users to deposit money in their applications after the bridge goes live Developers who invest eligible assets will receive corresponding AO token rewards. This provides developers with a long-term, permissionless revenue stream without having to apply for grants, outside investment, or even tokenize their projects. If they wish, these developers can also choose to share a portion of AO rewards with users, allowing users to continue to earn AO tokens when using apps in the ecosystem.

Permaweb Ecosystem Development Association

In addition, some dedicated ecosystem development organizations and builders will also share the native benefits of assets stored in the bridge. These organizations and builders work on AO's core protocols, marketing operations, and critical infrastructure development. These funds will gradually decrease over time, in line with the decay rate of network minting - allowing the network to bootstrap but leaving it as a neutral sharing protocol.

AR AO balance calculation method for existing holders

The AO token minting for Arweave token holders has been retroactively applied since the launch of the AO testnet at 12:00 UTC on February 27, 2024. Minting AO tokens since testnet launch will ensure that the tokens have sufficient circulation before circulation, with the goal of reaching approximately 15% of the total supply (3.15 million) around February 8, 2025.

If you have been holding $AR in the months since testnet launch, as of June 13, 2024, you have accumulated approximately 0.016 AO tokens per AR. Keep in mind that the current supply of AO is 1/65 of AR.

Major exchanges are currently studying whether and how to transfer $AO to users. Please contact the exchange or custodian to find out how they manage this process.

If users have been self-storing $AR tokens, they can check their balance by visiting ao.arweave.dev. Click on the Arweave tab and connect a self-custody wallet such as ArConnect.

Hold AR coins to earn AO coins in the future

New AO tokens will be minted every 5 minutes. Prior to the launch of the pre-bridge on June 18, 100% of all AO tokens were minted by AR token holders. Following the launch of the pre-bridge, 33% of AO tokens will be distributed proportionally to AR holders, accounting for an average of approximately 36% of the total AO supply minted by AR token holders. This process happens automatically.

The list below shows approximately how much AO you can expect to accumulate over the next 12 months for a given AR balance:

1 AR: 0.016 AO

10 AR: 0.16 AO

50AR: 0.8AO

100 AR: 1.6 AO

500 AR: 8.0 AO

1000 AR: 16.0 AO

The number of newly minted $AO will decrease over time until all AO tokens have been minted. AO tokens will become transferable on or about February 8, 2025.

Pre-bridge stETH to exchange earnings into AO

Note: AO transition rewards are not available to US citizens

During this initial phase, it is possible to deposit stETH (ETH staked using Lido) to accrue token rewards in AO. As AO begins to open up to more ecosystems, other proof-of-stake assets will become eligible.

During this initial phase, pre-bridge assets will not be available in applications on the AO network. Once the second phase of the bridge goes live, you will be able to use stETH in the AO application while still receiving AO token rewards.

When a user’s stETH is pre-bridged to AO, their original stETH deposit will be retained in the audit contract on the Ethereum network, while the native revenue will be distributed between the dedicated ecosystem development organization and the builders of the AO ecosystem , to promote growth. At launch, these organizations include the Open Access Supercomputing Foundation, Forward Research, Autonomous Finance, Warp Contracts, Longview Labs, and ao/acc. As the ecosystem grows, more organizations will be added.

Users can withdraw their initial stETH deposit at any time.

New AO tokens will be minted every 5 minutes after 11am ET on June 18, 2024, which is exactly 16 weeks after the launch of the AO testnet. Once rewards begin, 66% of newly minted $AO will be distributed proportionally to wallets pre-bridged to AO. This process happens automatically.

The exact number of AO tokens a yield provider receives depends on the proportion of their deposited assets in the contract to the total assets deposited. As AO opens up to more of the ecosystem and can offer multiple proof-of-stake assets, the number of AO tokens received depends not only on the proportion of assets offered, but also on the yield generated by each asset.

The following list shows how many AO tokens you can expect to accumulate over the next 12 months by holding a certain percentage of the total return asset pool (assuming the only asset offered is stETH):

0.01%: 210 AO

0.1%: 2,105 AO

0.5%: 10,524 AO

1%: 21,049 AO

5%: 105,243 AO

AO Tokens will become transferable on approximately February 8, 2025.

How to Deposit stETH to Get AO

Note: AO Transition Rewards are not available to US citizens

Users can start depositing stETH to Pre-Bridge today. Rewards will begin accruing on June 18, 2024 at 11am ET. Rewards are distributed once a day, so users may have to wait up to 24 hours to receive their first reward.

Follow these simple instructions to exchange your stETH earnings for AO tokens:

• Go to the minting page on the AO website.

• Click on the Ethereum tab and connect your Ethereum wallet (Metamask or Rabby).

• Enter the Arweave wallet address where you want to receive AO tokens.

• Deposit stETH into the audit contract by entering the amount you want to contribute. These tokens will remain in trustless contracts on Ethereum and can be withdrawn at any time. If you don't have stETH in your wallet, you'll need to exchange other tokens to get some stETH before depositing.

• Sign the transaction in your ETH wallet to deposit stETH into the contract.

• You will receive AO tokens directly deposited into your designated Arweave wallet.

Smart Contract Security

Pre-Bridge Contracts are extensively audited and trustless: no one can access your tokens but you. The only perk is that the Open Access Supercomputing Foundation (the organization coordinating the launch of the AO token with the Arweave Ecosystem Organization) is able to withdraw the token from the contract in the event of a security incident - returning it to its original owner. This feature provides an additional layer of security without placing pre-bridge assets under the control of any centralized entity.

The contracts themselves are minor modifications to the MorpheusAI deposit contracts. These contracts are used to provide a battle-tested foundation, thereby mitigating any security risks.

Conclusion

The AO token minting process introduces a completely different model that rewards users and developers based on the principles of fairness and equal access. The diverse team behind the initiative drew inspiration from Bitcoin’s groundbreaking innovation and the fundamental principles established by Satoshi Nakamoto.

The crypto industry has experienced tremendous growth over the past fifteen years. However, this expansion has not always been consistent with wider social interests. To truly advance the mission of creating a permissionless, decentralized network that safeguards user rights, it becomes critical to rethink how value and incentives are integrated to achieve these goals.

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