During early stages of the Superalgos ProjectAn open community together with its body of work, implementing a framework to enable a superior trading intelligence evolving within an open global collaboration of humans and machines, at the service of all people., the founders entertained the notion of a capped ALGO TokenThe ALGO Token is the medium of exchange within the ALGO Ecosystem by which stakeholders transfer value in exchange for products or services. ALGO also represents a form of energy turning bots into beings with a financial life of their own. Learn more about the ALGO Token... economy with a simple distribution in a number of pools. As the Core TeamA growing group of founders tasked with driving the Superalgos Project forwards during the bootstrapping phase, whose members are referred to as "Core Team Members". The Core Team is open to all Team Members who show extraordinary drive to lead the project.Learn more about the Core Team... grew and the project evolved, it became apparent that such simplistic approach would not serve a complex, ever-evolving ALGO EcosystemA self-sustainable and self-regulating network of economic relationships embodied by the activities of stakeholders of the Superalgos Project participating in a joint business. Learn more about the ALGO Ecosystem... in an optimal manner.
In March 2019, Superalgos Team MembersPeople or companies working with the project assuming responsibility over a specific area of work as described in the Contributing and Join the Dev Team pages. Team Members earn ALGO Streams for their contributions and participate in the governance of the ALGO Token. made a decision to redesign the ALGO Token economy to be dynamic and uncapped. Economic activity has not begun at the time of writing, thus the proposed model within is designed for evolution and the guidance of economic experts as the system matures. The current scope of examination explores the dynamics of issuance and sets forth an inflationary policy defining issuance channels and the introduction of an inflation cap—the point at which issuance stops within a given time period.
Any future changes to this policy and established cap will require consensus from the Governing BodyThe group of entities governing the ALGO Token, as defined by the ALGO Governance Charter..
Therefore, this document shall constitute an integral part of the Social ContractsThe agreement between the stakeholders of the Superalgos Project and the Governing Body (as defined by the ALGO Governance Charter) by which all stakeholders agree to abide by certain rules designed to protect the interests of all stakeholders. between the CommunityThe collaboration of a heterogeneous group participating in the Superalgos Project. A subset of the Community counts professional and amateur traders, developers and analysts, organized in Teams, referred to as "Algo-Makers". and the parties governing the ALGO Token. As such, this document shall be regarded as a binding macroeconomic roadmap guiding the governance of the ALGO Token and its implementation through the ALGO Governance CharterThe instrument that shall govern the issuance of ALGO Tokens.Read the Charter..., as mandated by the ConstitutionThe foundation of the Social Contracts with the Community by which all participants agree on the basic aspects of the collaboration.Read the Superalgos Constitution....
Definitions of terms presented in Title Case are provided on the Definitions Appendix, which shall be considered an integral part of this document.
The purpose of the Superalgos Project is to enable a superior trading intelligence evolving within an open global collaboration of humans and machines, at the service of all people.
The Superalgos Project will issue an Ethereum-based ERC-20 smart contract token called the ALGO. The scope of the ALGO Token Economy is any and all interactions between the ALGO Token and any stakeholders holding or utilizing the token for any purpose.
This document constitutes the macroeconomic foundations of the ALGO economy, it analyses economic structure, behaviour and decision making in the ALGO Ecosystem.
The scope of the analysis is set as the dynamics of issuance and the monetary expansion policy of an uncapped economy. We define what channels of issuance will serve the economy, and how. Then we introduce an expansion cap.
There are three main needs of the project in this phase, the economic activity arising out of those needs, and the corresponding channels of ALGO issuance.
The first need is development.
Development is all the work focused inward that the project needs in order to sustain growth. It is a balance of technical, business and community work. These three layers and their relationships are at the core of this project.
The second is the need for external liquidity in order to cover external costs.
These include project expenses, like technical, business and legal infrastructure, as well as awareness-raising, educational and promotional activities that the Superalgos OrganizationA not-for-profit organisation with the main purpose to promote the Superalgos Project. The Superalgos Organization is the legal entity representing the Superalgos Project and serving as the excecutive arm, with attributions in certain management tasks, public awareness and education. shall undertake. Issuance is in the form of Micro Exchange OfferingsThe Superalgos Project aims to distribute ALGO Tokens to the public by means of rolling micro public offerings through a network of partner Exchanges. Offerings shall happen as each Exchange is on-boarded to start its own Competitions. Each Exchange shall sell a number of ALGO tokens to its own clients. This distribution strategy intends to serve Exchange's clients as they start using the Superalgos Platform, satisfying the organic demand for the ALGO Token to access Superalgos Platform services. (MEOs) and ongoing liquidity needs are serviced by partner ExchangesWhile Competitions, Algorithms and the Marketplace run on the Superalgos Network, the actual trading occurs directly at Digital Assets / Crypto Exchanges., who link the ALGO economy to existing economies fueled by other forms of currency.
The third need is incentives to drive the evolution of the collective trading intelligence.
This third channel serves to stimulate the primary activity of system participants—building AlgorithmsRefers to trading algorithms; pieces of software automating trading strategies.—activating and fueling the positive feedback loops between CompetitionsRefers to trading competitions ; events in which Algorithms and human traders compete to determine the top performers under certain rules. Learn more about Competitions... and the MarketplaceThe Trading Intelligence Marketplace, also referred to as the "Marketplace", will be a subset of the Superalgos Platform running on the Superalgos Network enabling users to hire trading intelligence in the form of Data Services, Trading Services and Asset Management Services.Learn more about the Marketplace... that will emerge from the collective trading intelligence.
The Governing Body will issue ALGO in order to facilitate the optimal service of these needs, fostering the growth of the ALGO Ecosystem until it is self-sustainable. The resulting issuance policy dictates the expansion of the economy guided by demand and the production of value made apparent by analyzing each of the three channels in depth.
The development of the project is incentivized through the issuance of ALGO StreamsA smart contract that allocates ALGO Tokens at a preprogrammed rate to the address of a person or entity working for the Superalgos Project. Learn more about ALGO Streams.. ALGO Streams are potentially infinite streams of ALGO whose allocation decline each year, tending to zero, inline with the harmonic series 1/(n+1), where n represents the year since Stream inception.
There are two ways to earn an ALGO stream.
The first is by undertaking one of the available Areas of ResponsibilityA defined scope of work within a domain. Sometimes an area of responsibility may map with a role, such as in Marketing Direction; other times it may map with an asset, such as Project Website; or with an undefined number of assets of a certain type, for instance, Pitch Decks. advertised on the website, starting work and submitting a first deliverable. These modules constitute the critical development path set out by the Governing Body.
The second is, in the spirit of permissionless innovation, to contribute in an independent way to then submit the work together with a plan for future development and maintenance to the Community. If the work proposal is accepted, an ALGO Stream is granted.
The size of the ALGO Stream is proportional to the amount and relevance of the work being done and is negotiated before the inception and after the work is submitted. Negotiation is conducted between Team Members and the new contributor. In case the negotiation is not successful, the work may still be distributed in the permissionless system.
This agreement is therefore entered only once someone shows the willingness to join the team by doing some useful work first. The project reserves the right to adjust the ALGO Stream size at a later point or even completely cancel it in case there is a breach of agreement or the work is no longer deemed useful.
With time, as the risk in the project is reduced, the size of assigned ALGO Streams shall also be reduced resulting in a positively expanding supply of ALGO at each step as value is created in exchange for ALGO.
One-off contributions are also possible. To qualify for this, the contributor must earn the approval of an ALGO Stream holder, and his payment will be executed from the flows the holder has already received. This is a private transaction. These payments do not result in additional monetary expansion.
Like any new project, Superalgos will rely on external liquidity to survive until it is mature enough to have a stable and sustainable economy. The selected solution is a series of Micro Exchange Offerings (MEOs). An Exchange Offering is a very well known concept, and is particularly well suited for the Superalgos Project.
The project shall partner with Exchanges to deliver our technology to their users. With our technology, Exchange customers will be able to trade more actively and profitably, creating more business for Exchanges. In return, Exchanges shall list the ALGO Token, and shall sell ALGO to their user base, for it to be able to access the paid services offered throughout the Superalgos NetworkA P2P Network consisting of Superalgos Nodes running both part of the Superalgos Platform and Algorithms.Learn more about the Superalgos Network....
The listing shall provide liquidity for those working on the project and receiving ALGO Streams, and the funds raised shall finance the Superalgos Organization's budget.
Schedule and size of the MEOs shall be dictated by the proposed Annual Funding Plan submitted by the Superalgos Organization. At all times, a plan for expenditures in the forthcoming period shall be available, and shall be an integral part each MEO Plan subject to the Governing Body's approval.
On the other side of the scales, the external demand for ALGO Tokens shall be dictated by the perceived value of the products and services that can be consumed via the token. In a way, such demand represents the value created through development, recognized by holders of external capital.
All in all, issuance associated with MEOs respond to a measurable increase in value for the network: a whole new crypto community is onboarded along with a new Exchange. At the same time, the funds raised circle back with a positive impact for the network through the awareness-raising and educational activities performed by the Superalgos Organization.
Active and diverse Competitions is the primary way to incentivize our Community to evolve trading intelligence. The ALGO Competition Prize Fund is the vehicle that enables this activity, in particular during early stages.
It is natural to assume that demand for prizes is infinite. However, the model by which Exchanges play a major role in facilitating substantial prizes to drive trading volume to their business means issuing for this particular purpose might be limited to the early, bootstrapping phase of the project.
Competitions are sponsored as a way to bootstrap the feedback loop incentivizing Algo-MakersA subset of the Community counting professional and amateur traders, developers and analysts, organized in Teams, tasked with creating, developing, maintaining and promoting the evolution of financial beings. to compete, which generates more volume at Exchanges originating during Competition events, thus driving Exchanges to invest in further sponsoring Competition prizes, which in the end attracts more Algo-Makers to the Community.
This feedback loop fuels a parallel loop by which the more Algo-Makers create Algorithms, the more the trading intelligence grows. An increase in trading intelligence is linked with improving trading performance, which increases demand for Trading ServicesParticipants of the ALGO Ecosystem may offer automated trading services or automated signals services generated by algorithms or various methods of data analysis, in the form of subscriptions or any other means of commerce; these are all referred to as Trading Services., further stimulating the growth of the Algo-Makers group.
The prize fund will receive 50% of tokens issued in MEOs for as long as it is deemed necessary. This percentage may vary in the future.
A simple top-down monetary expansion formula is deployed to allow the ALGO ecosystem to expand as well as prevent harmful inflation. Though rapid economic growth is expected from adoption, advancement and maturation of tools utilized by the Community, the actual growth potential of the system is unknown and should not be prematurely limited.
ISSUING GUIDANCE: A hard cap of no more than 1.5 billion ALGO issued during the first five years will be set. For the sixth year and on, an issuing cap of 150 million ALGO per year will be set. This allows for continuous expansion after the fifth year, but with a declining inflation rate.
The aforementioned ISSUING GUIDANCE is an integral part of the Social Contract between the Governing Body and the rest of stakeholders of the Superalgos Project. In order to amend these macroeconomic variable, the Governing Body established by the ALGO Governance Charter shall publish a Macroeconomics Amendment Draft and call for a "yes" / "no" vote that shall take place 30 days after the date of publication. The vote shall be open for 10 calendar days.
In order for the amendment to be enacted, the following conditions must be met:
The voting power of each Team Member along with the specifics of the voting logistics shall be defined by the Governing Body in the ALGO Governance Charter.