COMMUNITY TOKENOMICS PROPOSAL: An Open Letter

Tokenomics
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COMMUNITY TOKENOMICS PROPOSAL
AN OPEN LETTER FROM KEY ANDROMEDA SUPPORTERS

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Dear Andromeda Team and Community,

We find ourselves at a cross-road. While advancements in the technology stack have progressed significantly, the overall market sentiment and price performance have been suboptimal. Key challenges mainly revolve around factors such as Low Float/High Fully Diluted Valuation (FDV) and Low Token Utility/Low Demand. Addressing these challenges requires a systematic approach focused on asking pertinent questions:

  • Token Supply: Is there excessive token allocation for Sub-DAO & Community Pools?
  • Token Demand: Where can aOS be optimised to create more token demand?
  • Token Vesting: Is the extended token vesting beneficial for the project
  • Token Chain: Does aOS require a dedicated blockchain

Addressing the Token Supply:

Currently, the Sub-DAOs and Community Pool hold a substantial number of tokens, contributing to the issue of "Low Float, High FDV”. This situation poses a long-term economic risk to potential market participants, impacting market sentiment and hindering broader ecosystem adoption.

A proposal has been suggested by the Andromeda Core Team to burn 450 million ANDR from the sDAO and Community Pool and introduce inflation with a capped supply. While reducing supply can be beneficial, enabling inflation contradicts the non-inflationary nature that is a fundamental aspect of ANDR’s economic design.

We believe that a more favourable approach would involve a moderate burn, accompanied by a permanent reallocation of tokens from the Sub DAOs to the “Staking Rewards Pool.” This reallocation would maintain the existing staking rewards mechanism without introducing inflation. Following the initial burn, we recommend implementing periodic "Milestone Burns”, funded by the Ecosystem Sub DAO, triggered by specific key performance indicators (KPIs) achieved on chain like new integrations or ADOs. In short, “new unique ADO created” – X tokens burned, “new chain integrated” – Y Tokens burned, “5,000 ADOs reached” – Z Tokens Burned, and so on (incrementally burning millions more).

Due to regulatory considerations, some details about the operational aspects of these “Milestone Burns” can only be disclosed after they happen (meaning they must burn first, then announce results). Nonetheless, the intended outcome is continual reductions in supply, while ensuring attractive staking rewards until the revenue flywheel mechanisms inherent in the ecosystem design are fully activated.

Summary of Proposed Supply Changes:

  • Sub DAO: Institute 50,000,000 ANDR à 20,000,000 ANDR (- 30mil)
  • Sub DAO: Foundry 75,000,000 ANDR à 20,000,000 ANDR (- 55mil)
  • Sub DAO: Ecosystem 50,000,000 ANDR à Initial Funding for Milestone Burns
  • Community Pool 366,675,486.96 ANDR à 30,000,000 ANDR (- 336.6mil)
  • Team (Founders) 140,000,000 ANDR à 130,000,000 ANDR (- 10mil)
  • Staking Rewards 290,231.60 ANDR à 86,965,718.56 ANDR (+ 86.6mil)

Total Token Supply: 1,000,000,000 ANDR à 655,000,000 ANDR (- 345mil)

Please Note: Team burn would be voluntary because governance must never take someone else’s tokens. As proposed, it adjusts Founder allocation from 14% of 1 billion to ~19.85% of 655mil.

Addressing Token Demand:

As an interim solution to stimulate token demand, we recommend burning of all ANDR chain fees and converting aOS platform fees (across all aOS-supported chains) into ANDR for subsequent burning.

This approach should be reassessed in the future, particularly as Andromeda progresses towards establishing extensive Protocol Owned Liquidity Pools and enhancing flywheel effects.

In the immediate term, this uncomplicated adjustment is poised to bootstrap demand and contribute to deflating the token supply, thus capturing value within the token effectively.

Summary of Proposed Fee Structure Changes:

  • For the upcoming 6 months:
    • Burn all protocol and chain fees denominated in $ANDR
    • Convert all protocol and chain fees not denominated in $ANDR to $ANDR and burn
  • A new Governance Proposal to be submitted at the conclusion of the 6-month period to revaluation or continuation of the initiative.
  • This adjustment would exclude Developer/ADO Licence Fees allocated to the creators.

There needs to be an obvious and compelling reason why someone would want to buy and own the ANDR token. History has shown that the best way to do this is with deflationary supply mechanisms.

In other words – aOS adoption needs to directly fuel an ongoing cycle of token buy-back and burns.

Addressing Token Vesting:

While pre-sale backers have predominantly chosen to stake their tokens based on on-chain data, the current continuous token release may deter potential new users.

Despite the token price now being below the acquisition price of most pre-sale backers, we believe there is merit in addressing this issue to reset the project’s trajectory.

Although there is a risk associated with early backers potentially divesting, a decisive resolution is preferable for the project’s overall progress. This adjustment, in conjunction with token burns, mitigates the concern of “low float, high Fully Diluted Valuation (FDV),” potentially fostering a more positive market sentiment.

Summary of Proposed Token Vesting Changes:

Accelerate vesting schedules to increase liquidity and eliminate the ‘daily drip’ token release:

  • Team: 24-month vesting from Oct 2024 remains unchanged
  • Pre-Seed: Reduce 24-month vesting from Oct 2024 to 24-month vesting from Dec 2023
  • Seed/SAFT: Reduce 24-month vesting from June 2024 to 12 Months from Dec 2023
  • Validator SAFT: Reduce 24-month vesting from June 2024 to 12 Months from Dec 2023
  • Validator Bootstrap: Reduce 36-month vesting from Dec ‘23 to fully vest on Chain Migration
    • Refer to “Chain Independence” for additional details.

This would see Seed/SAFT and Validator SAFT users (who entered above current market price) fully vested by Dec 2024 and Pre-Seed users (who entered roughly at current market price) would be vesting until Dec 2025.

Addressing Token Chain Independence:

Establishing and maintaining a blockchain incurs considerable operational expenses involving validators, chain engineers, security protocols, and various other factors throughout the lifecycle of aOS on the Andromeda Blockchain.

The original plan for Andromeda’s aOS was to operate Terra1. After the UST Depeg, many apps (including Andromeda) shifted to operating their own sovereign chain. While it was the least-bad option available at the time, it didn’t always work out. With Mars’ migration to Neutron and Kujira’s migration to THORchain, Andromeda should also reassess whether maintaining a sovereign chain still aligns with the project’s objectives and the interests of it’s token holders.

It is essential to approach this potential transition thoughtfully, requiring possible financial backing from a new host chain, however it would present several significant advantages for ANDR Holders:

  • Cost Efficiency: Substantial reduction in operational expenses for the core team, extending project viability.
  • Enhanced Tokenomics: Elimination of the need for validators decreases network costs and enhances flexibility.
  • Improved Security: Maintenance of chain security by the dedicated development team of the new host chain.
  • Development Efficiency: Streamlined development focus exclusively on aOS, facilitating faster implementation of planned features like sANDR.
  • Liquidity Opportunities: Access to an enhanced liquidity environment through a DEX on the new host chain.
  • Marketing and Financial Support: Potential partnerships with a “new host chain” offer marketing exposure and financial backing to support the project’s valuation and sustainability.

While some intermediate technical steps may be necessary, these considerations would be addressed by key contributors to the chain.

Summary of Proposed Home Chain Transition:

  • Initiate discussions/tender process for migrating aOS from Andromeda Chain to a new Host Chain within the Cosmos Ecosystem.
  • Potential partners could include Injective, Neutron, Solana, Celestia, and THORchain, among others. Examples of similar transitions include Mars to Injective and Kujira to THORchain.
  • Following migration, the Andromeda chain would be archived and discontinued.
  • Validator services would not be required, with staking activities transitioning to the host chain.

Voluntary Contributions to ANDR Token Burns:

In the event that the Andromeda community decides to pursue the aforementioned changes, which include transitioning to a new parent chain in 2024 while abstaining from token inflation, several Co-Signers of this proposal have expressed their own commitment to voluntarily burn significant portions of their own ANDR Token holdings.

Additionally, we invite others to contribute to this community-led Token Burn initiative, which we will update the aggregated pledges as new commitments are verified.

  • InnerMoon Pledging 100,000 ANDR Token Burn
  • Outer Limits Validator Pledging 50,000 ANDR Token Burn
  • RoundTable21 Advisory Pledging 1,000,000 ANDR Token Burn
  • RoundTable21 Validator Pledging 100,000 ANDR Token Burn
  • Siradi.io Validator Pledging 50,000 ANDR Token Burn
  • WildSage Validator Pledging 100,000 ANDR Token Burn
  • Wolftree Ventures Pledging 50,000 ANDR Token Burn

Total Voluntary Burn Pledged Thus Far: 1,450,000 ANDR Token Burn

Estimated Remaining Supply After Burns: 653,550,000 ANDR (34.645% Reduction)

Executive Summary:

Andromeda’s early supporters, including investors, advisors, and partners, want to underscore their own commitment to unlocking the technology’s full potential and ensuring the project is well positioned for sustainable growth over the long term.

By reconceptualizing the narrative surrounding Andromeda, we hope to support an extended runway for success and garner widespread community support. This strategic shift is intended to empower Andromeda to fully harness its capabilities and maximise impact in the web3 space.

  • Significant burn to reduce Total Supply by 34.5% (from 1 billion to 655 million).
  • Sizable ongoing “Milestone Burns” upon achieving ecosystem KPI and Adoption Targets.
  • Allocation of all protocol fees for six months to be burnt (extensions subject to governance).
  • Establishment of a Large Token Staking Pool (equivalent to over 13% of the Revised Supply).
  • Acceleration of Presale Vesting Schedules to resolve "Low float, High FDV” issue.
  • Transition to a new Home Chain achieving substantial cost saving & streamline complexity.
  • Proposal Co-Signers have committed to burn 1.4 million of their tokens if the plan is approved.
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personally think that Andromeda doesnt need a dedicated chain. it wasn’t even meant to be one, as it started on Terra (old one).
if it were to move to Injective, it would also totally remove the utilitarian necessity of the STAKING function altogether.

  • a portion of that would need to move to liquidity incentives to give room for more users to participate, while the rest could be removed out of circulation permanently without remint.

increasing the liquidity is also detrimental to the well-being of the token. the current liquidity can not support the current token value. the LP to MC ratio results in high volatility and the LP does not support normal sized swaps (100 USD worth of tokens) without causing slippage issues, on any DEX or CEX.

the DAO would benefit from moving from simple token staking over to LP provision, as the 2nd is much more beneficial to the token, project and token holders. liquidity is what brings stability. a place for a token to find support.

such a move would make Andromeda an Injective project, giving possibilities for grant applications from Injective. but most importantly, the support from the Injective community and a more direct line to them and projects building on the chain.
obviously also having a strong foundation on a well interconnected chain.

this would obviously require technical changes and not sure how this would work. if its possible to make such a change without changing token? and if such a move would be financially viable.

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in case that a move to Injective were to be economically unfeasible, the staking pool could be slashed, with a portion moved to LP incentives and the rest burned permanently.
realistically, you want to attract validators to validate, which doesn’t require 14% APR. low APR’s on strong assets that grow in value is preferred over the opposite.

not sure how interesting it would be for now. but once there are users, a fee discount system could be added for users who stake tokens. their discounts pay for their willingness to participate in staking. the APR is a bonus and not why they stake. just how Helix gets people to stake INJ.

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in any case, i would also add DAO approved LP tokens into the governance (USDT and USDC pairings on Helix, Shade and Astrovault), as the liquidity providers are the ones that are keeping this projects token afloat and also the ones that are putting most at risk. they need to be part of governance to reach success.
i’d also suggest giving LP token providers 4x the voting power in relation to their ANDR holding in the LP’s to get community members to LP a portion of their tokens.

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Alright, where do I start? I’m so freaking thrilled to have this post in the forum. I was hoping we could collect ideas here and discussions. From the bottom of my heart, thank you for posting this. A+ effort, A+ form, A+ all the way around.

That being said, haha, this post requires a very well thought out response. Give me a few days to craft something. Overall this is very positive stuff. I’ve just got a day of packing, errands and travel setup over the next 2-3 days. I’ll hope to have something posted by Monday… but that largely depends on what my mom has planned for me next weekend when I visit.

Awesome! I’m stoked! Thank you!

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SAS (Single Asset Staking) is used for both governance participation, token stickyness (reducing emotional flight scenarios - which helps stabalise the economy), and as a way to provide a low-risk reward mechanism.

As you mentioned - without the need for validators, the staking APY could/should be much lower, as they mainly act to counter unlocks of the remaining vesting (which would be accellerated, shortening the need for such things).

Ideal, all tokens would be liquid as soon as possible, and staking rewards would remain in the mid-to-low single digit percentage range until the flywheel takes off and adds new income streams to staking rewards. This would both extend the runway of the staking rewards pool, and focus the efforts on (the more tax efficient and overall bullish) capital growth rather than (mostly trickle-up economics) yield.

I think 4x voting power on LPs would be excessive. Its a different risk position with of half the base token exposure, so 4x voting on value would be 8x the voting on ANDR tokens). LPs are also instant unlock and generally a higher base yield than SAS. I do agree that extending voting rights to LPers would be ideal as an incentive to participate in liquidity provisioning.

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Thank you! This Open Letter was the collective efforts of many people throughout the community.

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ANDR tokens in LP’s make up only half of the token value.
There are 2 portions in LP’s. so counting only the ANDR value is already half. from the 4x, 2x is doubling in actual value. and yes. LP providers are providing much more needed services than stakers. without an increase of LP, this token will not be able to sustain a rise in value. quite the contrary. the liquidity currently cant sustain a swap of 100 USD without causing slippage, which is a typical sized swap.

LP providers are the ones that have been providing liquidity throughout this crash. the ones that kept the price from crashing below a fraction of a cent by constantly offering USDC and USDT to sellers of ANDR. without LP providers there would be no discussions made. and yet they are not included, even though they are the ones saving the project.
some of the LP providers have been holding their LP throughout this -97% on ANDR’s value and their farming rewards do not compensate for their Impermanent Losses. far from it. they should be included in these discussions. and they do deserve to get more power for their tokens than simple staking. LP benefits the project way more than staking. counting their 2nd pairing and a 2x extra modifier is not too much. it is the absolute minimum to ask.

token stickiness is combatted the same way with LP providers and even better. farming rewards are higher and you already are active. also keeping the system fluid. giving others tokens to trade with. reducing volatility, increasing stability for the price to finally be able to rise, while staking only prevents ppl from selling. the only benefit staking has vs farming is the validation. which wouldn’t be necessary if the project moved chains.

LP = give token A and token B to boost stability of the project, let others trade with their tokens and dont sell but withdraw LP when they want to take out profts
Stakers = promise wont sell +21 days

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I just wanted to thank you again for the Open Letter and for sparking these valuable discussions in the Andromeda community. The effort and thoughtfulness you put into this proposal are much appreciated. This kind of dialogue is exactly what we need to drive things forward. Community-driven!

There are some great points in the letter and we’ve definitely got a lot to dive into. The team is actively exploring these ideas and considering the next steps.

We’re also working on bringing the feedback from Telegram and Discord into the Forum, so the broader community can get involved and we can collectively shape some actionable changes. Shout out to @svansy for contributing to the discussion.

Thanks again for your dedication to Andromeda. I’m excited to see where this all goes!

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These all look great at face value. Will craft a more detailed response soon.

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There are a lot of discussions that need to be had around how to more closely align LP incentives - but I think we first need to resolve the initial tokenomics and home chain issues. What new home chain aOS finds itself greatly impacts the available liquidity opportunities/mechanisms, so we need that side buttoned down first.

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This makes the quality of the letter even more important. Just what we wanted.

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Thanks contangodigital. We look forward to it. Welcome to the Forum!

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Good discussions regarding this letter and below comments last night and this morning. Specifically “Chain Migrations” this morning. Cody is in travel execution mode right now, and has much to say about the difficulty of migrating to another chain(s), so will pause those thoughts for now. But the quality of discussions here and elsewhere are valuable. Thanks to all.

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I’d like to ask that we move the discussion of decomissioning the chain/finding a new home to a thread away from this one. There are a lot of moving parts and that one, while not completely in a vacuum, is sorta orthogonal to the token burn/release schedule discussion. They aren’t dependent on each other.

This letter is pure tokenomics, without much technical discussion whereas the chain migration/validator talk has a LOT of technical implications.

That being said, if there aren’t any objections by the end of the weekend, I’ll fork that conversation into a new thread and post here.

Yeah?

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Great discussion on a viable proposal. Personally I would like to see a greater allocation of tokens set aside in the burn category for ADO creation. An even more meaningful amount of ANDR burnt for every unique ADO created, with an increased burn amount for multichain ADOs, would be a critical bridge to adoption and provide a deflationary economic factor that is much needed. In addition, future grants issued for ADOs that meet base criteria paid in ANDR would be a good consideration as well once the token economy is stable/liquid.

That said, I will be voting for this prop as it stands as I believe it is a step in the right direction🔥

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Great to see discussion taking place! The one idea i’d like to present involves the massive burn to decrease supply by 345mil.

I think about what I witnessed with CRO coin years ago. They did a massive burn of tokens in late 2021/early 2022. I watched the price soar up and then quickly correct right back to the price it was trading at prior (short term effect). Using them as an example again, the price today is trading well below what any early investor would like to see. Maybe CRO did the burn for technical reason’s beyond my understanding, but as a speculator, it didn’t appear to have long term positive impacts.

Maybe there is a longterm impact that would be positive, and logic would say that less tokens = scarcity = more value per token, but the market does not run on logic.

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Thank you. Referencing Bino10 comments about CRO, do you know of any other projects where milestone, or performance burns like this sustained/grew token price?

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Thank you for your update. Regarding the home chain topic, I respectfully disagree that it can be separate. For the future prosperity of the project, it is vital that these issues be addressed together.

If Andromeda were to continue on its own chain, then it needs significantly higher emissions to fuel validator commissions. Your previous proposal illustrated this through your suggestion that ANDR enable inflation.

Having an unnecessary L1 to fund development, security and maintenance for only serves to increase overheads, increase sell pressure, increase inflation rate, increases core team costs (additional full time chain development resource), and increases core team liability exposure. It also reduces team runway and reduces liquidity opportunities as there is also no DEX on the home chain.

It is our belief that the viability of the plan, as written, requires the migration of aOS to a new host chain. The practicalities of changes to the tokenomics and the chain on which that token operates are intrinsically linked - the two matters must be considered together.

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In my experience, a one time burn of total supply is only part of the equation for success. It is also vitally important to have consistent deflationary burn pressure based on set parameters, which in this case will be unique ADO creation as the primary means of triggering supply reduction.

I have worked with two projects over the past 5 yrs which have done substantial burns. The first did a time one time burn of 50% of total supply, and saw little to no long term benefit from doing so. The other did a 30% burn of total supply, with continuing burns quarterly for partnerships achieved, and was the top gaining project in web3 for the year.

A commitment over the next 12-24mo to continually reduce supply for ADOs created can provide the bridge needed until adoption is achieved.

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A huge thank you to the community for making this proposal. It demonstrates a lot of care and effort. It has been received with much enthusiasm by the core team. A major proposal like this in the form of an omnibus proposal advocates a number of changes to be passed all at once. Each recommendation requires careful due diligence and technical analysis. The team’s capacity to execute this proposal in a timely manner is unknown. Putting this proposal up for a vote without any due diligence, scoping or resource analysis is highly negligent and not operating in good faith with the community’s interests. The tokenomics model and rationale for the project were developed closely with some of the best available advisors in the space over the course of 18 months. These advisors included PhD level economists, mathematicians, cryptographers, and computer scientists to name a few. Abandoning that work without a thorough vetting, testing, and validation is not acceptable and the current proposal up for vote should be voted down until a full understanding of risks and costs to the project have been discussed. With that in mind, I’d like to provide more context for the community to consider with respect to the proposal’s objective to move away from the Andromeda Blockchain and limit supply. This is necessarily fairly technical.

Context

Every new computing paradigm experienced explosive growth after there was a widely distributed operating system. Andromeda aOS is the first multi-chain and cross-chain operating system for Web3. It is a new layer of computing designed to harness public blockchain infrastructure. It is fully implemented as a system of modular and composable smart contracts and enshrined at the smart contract layer. aOS is implemented across multiple blockchains, and soon, multiple ecosystems. ANDR token utility value is intended to be captured across multiple blockchains, ecosystems, and cryptocurrencies.

The Andromeda Blockchain launched in November 2023 and aOS launched on that blockchain in April 2024. aOS is currently deployed on 12 blockchains using the Cosmos SDK and can readily scale distribution to hundreds more. There is a clear path to implementing aOS in new Blockchain ecosystems like Solana and Avalanche within the year. New blockchain ecosystems that use either modular blockchain architectures or the Move smart contract language are also suitable for expanded distribution of aOS. The Andromeda project is currently executing and delivering against its published roadmap. The project is driving towards product market fit by targeting adoption by software and application developers. The project is delivering and will continue to deliver unmatched capabilities. The community has good reason to believe these capabilities are transformational to Web3 and of profound interest to strategic players in Web3.

Andromeda Blockchain

The Andromeda White Paper 2.0 section 7.0 Tokenomics describes ANDR and the Andromeda Blockchain in this way:

ANDR is a token originated on the Andromeda Blockchain. The token is used in two domains 1) it secures the Andromeda Blockchain and 2) it powers the aOS. The demand for ANDR scales exponentially across many blockchains and ecosystems because of the aOS. Most of the anticipated utility value of ANDR is a function of the wide deployment and usage of the aOS on many different blockchains. The Andromeda Blockchain is not essential to the deployment and use of the aOS across blockchains. However, it is vital to the ongoing innovation, automation, and other unique capabilities the Andromeda Blockchain is bringing to market.

Sovereignty

At the time of writing the 2.0 Whitepaper the Andromeda Blockchain was ‘not essential to the deployment and use of aOS…’ It was understood to be useful for ongoing technical innovation and incubation of aOS and to the Cosmos SDK. In this light, the Andromeda Blockchain would be the starting point for rolling out new capabilities on a home chain where the aOS community had sovereignty to deploy early updates to the software. Without blockchain sovereignty, the project risks entanglement with other blockchains’ prerogatives and/or the risk appetite of other non-Andromeda communities.

This is not an academic or hypothetical problem for retaining the Andromeda blockchain. Sovereignty matters when leading change for the extended aOS ecosystem. Today we have a concrete example of just this kind of risk where the aOS ecosystem innovation is currently slowed, and in some cases halted, because other blockchain communities are slow to adopt the latest version of CosmWasm or IBC.

For example, most blockchains, where aOS is currently deployed, have not adopted CosmWasm 2.0 despite its release 6 months ago. CosmWasm 2.0 contains new functionality that is essential to aOS delivering multi-chain capabilities. Other blockchains await a compelling reason to risk the upgrade. Meanwhile, aOS offers that compelling reason. These compelling reasons need to be demonstrated to the aOS ecosystem of blockchains. A classic chicken & egg problem. Other examples exist but this one is illustrative of why having a sovereign Andromeda Blockchain is important.

aOS Instance Registration

Each unique instance of aOS installed on a blockchain is registered with the Andromeda Blockchain. aOS instance registration is essential to maintaining the multi-chain integrity of aOS. Without registration fake instances of aOS could be created or Man-in-the-middle attacks are possible. While registration can occur from any chain, the case for sovereignty of the registration process is very strong. Ideally the future of aOS instance registration is fully decentralized, however, at this time it is a lower priority than product market fit.

aOS Enshrinement

aOS is enshrined at the smart contract layer. This means it is always implemented as a system of smart contracts and not in the lower level blockchain modules on the chains where it is installed. This enshrinement is essential to the future of open public blockchain infrastructure to preserve a separation of concerns between different layers of open public computing infrastructure. Each layer needs to satisfy its own economic and technical imperatives without the complexity of solving for all layers. This is a model that has long been established in other computing environments. It is best conceptualized like the OSI model and how it evolved over time to be the preeminent protocol model. For now, the reference model for aOS is enshrined on the Andromeda Blockchain. The sovereignty of the Andromeda Blockchain is essential to the enshrinement and is interrelated with other technical imperatives of the Andromeda Blockchain.

Cost

The community proposal and comments suggest cost savings are an important consideration. However, by using third party Cosmos SDK services the project now enjoys cost effective maintenance and support from developers with world class experience with the Cosmos SDK.

ANDR Re-issuance

Abandoning the Andromeda Blockchain requires the re-issuance of all ANDR. This is a huge effort to call in, destroy and re-issue all ANDR found across all blockchains with aOS. It requires suspending all CEX and DEX activity. This will likely take several quarters of planning and execution and will consume the core team’s attention while simultaneously pursuing the current technical roadmap and pursuit of product market fit. The overall costs, technical capability, and time to execute this are unknown at this time.

ANDR Emissions Rate Andromeda Blockchain Security

The community proposal describes the high emissions rate of ANDR for security. ICS enhances security and significantly reduces high emission rates. The Andromeda team has been in communication with ICF to pursue this objective.

Reducing Total ANDR Supply

The community proposal recommends a significant reduction in the total supply of ANDR. This is a correct recommendation to solve the status quo low-float high-FDV problem. However, as the project sets its sights on expanding global distribution of aOS to other blockchains and ecosystems, the 1 Billion ANDR can become a powerful incentive to induce other communities and strategic investors to embrace aOS as their default operating system. This can take the form of airdrops, community swaps, token grants and other very large incentive programs. There are many many different avenues being explored on this front concurrently outside the purview of the community’s knowledge.

Summary

The Community Proposal is an excellent opportunity to evaluate the Andromeda Project through the lens of its community. It is also a great starting point for discussing the ongoing technical development and direction of aOS and how this relates to the ANDR token, token allocations and Andromeda Blockchain. When evaluating the proposal there are obvious tradeoffs between implementing near and medium term objectives. These tradeoffs are between the technical roadmap, pursuit of PMF, further development of ANDR tokenomics and the ANDR market. These tradeoffs variously incur the accumulation of technical debt and restricted optionality that are important to making the best decision for the project. Total costs, risks, availability of resources and impact to the technical roadmap are completely unknown at this time.

Recommendation

Vote no on this current instance of the proposal so that a proper cost and risk analysis can be conducted and communicated to the community for re-vote. Future proposals should be broken out - sweeping changes of this kind should be voted on independently of one another and not in omnibus form.

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We’ve received a lot of feedback from the community both on public and private channels. Thank you for all of it - especially for the pointed critique of my considerations above. The passion from everyone on the team and the community means we still all care deeply about this project. And understandably so. After three years of building we’ve delivered an entirely new layer of software with unmatched capabilities and the most ambitious and commanding narrative in all of Web3. This project and this community sits on the strategic high ground. So let’s continue to work together towards realizing its magnificent potential.

As Cody said in his reply, the Proposal presented by the community was well done. In listening to the community the message to ‘do something’ and ‘tell us by when’ has been received loud and clear. It is reasonable. So we commit to providing a detailed plan within 10 days of how we can execute the proposal. To allow us the 10 days to prepare the new proposal, we respectfully ask that everyone vote no on current community proposal. The plan will be to the best of our abilities and in good faith to discover what it takes to execute the proposal.

The plan may not provide a definitive schedule because of the prospective nature of finding a home chain. Furthermore, the resources and timing required to unwind ANDR from various chains, DEXs, CEXs as well as the other proposal provisions are unknown at this time. We’ll need to find and engage external expertise to better understand what is possible. The clear intent is to arrive at a public plan that describes the scope, approach, risks, resources and expected timing for each recommendation and its feasibility under the known constraints. We will then be in a position to responsibly and reasonably make commitments.

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