AI16Z (AI16Z) Tokenomics

The token economics for ai16z are currently centered around proposals and community discussions aimed at establishing a robust, long-term value accrual mechanism for the token, particularly by positioning it as the core currency for the Eliza AI agent ecosystem. The long-term aspiration is to evolve ai16z into an L1 blockchain for AI, metaphorically speaking.

The following sections detail the proposed mechanisms for issuance, allocation, usage, incentives, and the available information regarding locking and unlocking.

Issuance Mechanism

The core team and partners have expressed a clear directive regarding the token supply: Do not increase the $ai16z token supply. The focus is on finding ways to accrue value without diluting the existing supply.

While the token contract has an infinite mint function, it is governed by the DAO, meaning no single actor can trigger it. It would require a majority DAO vote, which is considered a direct disincentive to dilution.

A total of 100 million tokens are planned for distribution based on holding proportions, with 20% available immediately and the remainder unlocking daily.

Allocation Mechanism

The ai16z DAO currently holds a significant portion of the token supply, with additional tokens reserved for future development:

• ai16z DAO: Holds over 10% of the token supply.
• Squads Wallets: Hold an additional 3% of the token supply for future development.

In the early stages of the project's launch (October 2024), a whale holding 16% of the tokens donated 11% to support developers and creators, reducing their personal holdings to 5%. These developer/creator funds are held in a multisig wallet.

The ai16zDAO has also attracted millions in token supply "tributes" from various tokens, including Eliza, FXN, and Aiko, underscoring its growing influence and treasury diversification.

Usage and Incentive Mechanism

The proposed tokenomics aim to create a "flywheel" effect that drives sustainable value to the $ai16z token by making it the central currency of the Eliza ecosystem.

Proposed Utility and Value Accrual

The long-term goal is to position $ai16z as the base currency for agent-to-agent transactions and an "App Store" for agent services, similar to how $ETH or $SOL underpin decentralized infrastructure.

Key proposals for usage and incentives include:

Locking Mechanism and Unlocking Time

While the tokenomics are still in the proposal stage, the concept of locking is central to the incentive structure:

Locking Mechanism

The proposed staking mechanism involves locking $ai16z to gain advantages within the ecosystem, such as early access to new agent launches and a share of LP fees. This mechanism is intended to drive demand and reduce the circulating supply, painting the ecosystem as one of "long-term actors."

Projects launching on the proposed launchpad may also be required to lock liquidity, with the distribution of trading fees being a potential incentive for long-term liquidity providers.

Unlocking Time

A total of 100 million tokens are planned for distribution based on holding proportions, with 20% available immediately and the remainder unlocking daily. This unlocking strategy is designed to prevent immediate sell-offs and provide a buffer for seeking partnerships.

Specific, detailed vesting schedules for team, investors, or other allocations were not available. The DAO's portion of the token supply is intended to be used to support the ai16z DAO and ai16zeliza projects.