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The native cryptographically-secured permissionless multi-utility token. of the Alkemi Network (ticker symbol ALK) is a transferable representation of attributed governance and utility functions specified in the protocol/code of the Alkemi Network, and which is designed to be used solely as an interoperable utility token thereon.
Based on the ERC-20 standard, ALK token's primary function for network governance and economic incentives which will be distributed to encourage users to exert efforts towards contribution and participation. in the ecosystem on the Alkemi Network, thereby creating a mutually beneficial system where every participant is fairly compensated for its efforts. ALK is an integral and indispensable part of the Alkemi Network, because without ALK, there would be no incentive for users to expend resources to participate in activities or provide services for the benefit of the entire ecosystem on the Alkemi Network. Given that additional ALK will be awarded to a user based only on its actual usage, activity and efforts made on the Alkemi Network and/or proportionate to the frequency and volume of transactions, users of the Alkemi Network and/or holders of ALK which did not actively participate will not receive any ALK incentives. ALK does not in any way represent any shareholding, participation, right, title, or interest in the Company, the Distributor, their respective affiliates, or any other company, enterprise or undertaking, nor will ALK entitle token holders to any promise of fees, dividends, revenue, profits or investment returns, and are not intended to constitute securities in Canada, Singapore or any relevant jurisdiction. ALK may only be utilised on the Alkemi Network, and ownership of ALK carries no rights, express or implied, other than the right to use ALK as a means to enable usage of and interaction within the Alkemi Network.
Alkemi is the first decentralized liquidity network to facilitate both KYC / AML permissioned (Verified) and permissionless (Open) liquidity pools governed by one utility token.
ALK would allow holders to create and vote on on-chain governance proposals to determine future features and/or parameters of the Alkemi Network (the right to vote is restricted solely to voting on features of the Alkemi Network; it does not entitle ALK holders to vote on the operation and management of the Company, its affiliates, or their assets or the disposition of such assets to token holders, or select the board of directors of these entities, or determine the development direction of these entities, does not constitute any equity interest in any of these entities or any collective investment scheme; the arrangement is not intended to be any form of joint venture or partnership). Each token entitles the holder to one vote on all Alkemi Improvement Proposals (AIPs). For example, ALK holders will be able to propose and vote on:
- Setting interest rate models and base fee structures (e.g. origination fees)
- Administering asset markets (e.g. add, remove, lock, unlock)
- Updating protocol contracts and risk parameters (e.g. utilization limits, collateral ratios)
- Amending admin roles (e.g. Liquidators, KYC admin)
The Alkemi Network itself is simply a blockchain protocol which, by design, does not offer any resources for utilisation. As such, in order for the protocol to perform its core function of connecting borrowers/lenders, users would need to be incentivised to play the role of liquidity providers and stake their digital asset pairs (e.g. ETH/USDC) into the decentralised market making pools to provide the necessary liquidity for transactions. As compensation for opportunity costs, these liquidity providers which help to promote adoption of the Alkemi Network by staking or including assets to liquidity pools in exchange for LP tokens would be rewarded with ALK (i.e. "Liquidity Mining" on the Alkemi Network), according to each user's relative contribution after various adjustment and correction parameters. By distributing ALK in this manner, it ensures that the governance token will be distributed primarily to key network contributors and allow them to have a say in protocol parameters..
With Alkemi’s Liquidity Mining Program, 35% of total ALK supply (70 million tokens) will be distributed to liquidity providers over 4 years. At every Ethereum block creation (currently around 13.3 seconds per block), ~7.38 ALK tokens will be minted and distributed to liquidity providers commensurate with their participation in pools.
The total supply of ALK tokens after 4 years will be 200,000,000. 50% of this supply (100,000,000 ALK) is allocated to the core team, investors, prior backers and the founding entity at TGE. After TGE, the remaining 50% (100,000,000 ALK) will be allocated to the liquidity mining program and the ecosystem fund for ongoing protocol development and network growth.