Aladdin is Evolving
If you’ve been following AladdinDAO’s story, you will know that we have assembled 30 of the biggest, brainiest DeFi experts in the world (we call them the Boule Council), and created an economic mechanism to incentivize them to share their DeFi insights with the community.
Each week the Council convenes for their research meeting where two protocols are presented to the group for discussion and debate. During the following week, the council votes on whether to officially endorse those protocols and integrate them into the Aladdin ecosystem. The price to watch these research meetings and scoop mad alpha? Free.
Watch our free alpha videos here https://www.youtube.com/channel/UCaQaNdQo_j4gbEyqPkKuj_w/videos
The value Aladdin creates is ridiculous, but who does it help? Aladdin was founded to harness elite big brains to help everyday people safely thrive in DeFi, but there are two key weaknesses with the existing system impeding that:
- Value created by the Boule Council is not well captured by the ALD token, which is the fuel that powers the whole system.
- Many opportunities proposed by the Boule Council are not accessible to much of the community due to gas costs and complexity.
The solution to both of these problems turns out to be deceptively simple: AladdinDAO will build a treasury of tokens and LP positions in the protocols that the Boule Council has elected, then tie the value of the ALD token to that backing fund.
When the switch is thrown, ALD will instantly become a simple, automatic, low-gas way to track Aladdin’s full portfolio of superior DeFi projects, which will be properly diversified with blue chips and stables. ALD holders save gas, avoid complexity and get free diversification. This is huge.
Right now gas prices make diversified farming on Ethereum mainnet impossible for all but whales and pros, but Aladdin can change all that. Our new tokenomics will allow more people than ever to benefit from amazing Ethereum DeFi projects. More great projects with more ownership representing more people who are more engaged makes for more WAGMI!
Standing on the shoulders of giants, the Aladdin team has implemented and optimized an economic mechanism for connecting the value of the ALD token to the treasury holdings of Aladdin projects. Simply buy and stake your ALD, then sit back and watch as your ALD bags track the performance of the evolving Aladdin treasury without costing you another gwei in gas.
It’s all the power of Aladdin, on Easy Mode!
To play along, follow our patented three step process:
- Get some ALD! Buy at Uniswap, or better yet, bond assets directly.
- Stake it! If you bonded with auto-stake, you genius, you’re already done.
- Tell your friends that you prefer to let your team of experts worry about finding the best long-term DeFi plays, so you can focus on important Twitter shitposting
On the Bonding and Staking model
The system of bonding, staking and rebasing that is now familiar to the DeFi world has some important implications that are perhaps not well understood.
First: selling bonds is fundraising. It is a way of acquiring non-native assets in a project treasury, so that they can be used for some purpose. It doesn’t matter if that purpose is investing, yield farming, or paying Nic Cage to sing Ave Maria in a tutu, what the funds are for is a completely separate, but important, question.
Secondly, protocols that use this approach generally mint more value in their native token than they take in from bonds. Le gasp! But do not be alarmed. For an asset-backed token, minting more value in native tokens than you take in your treasury, assuming that the market price of the token remains stable, is simply a way of creating leverage. Extra minted tokens are distributed among the true believers who stake their tokens, limiting the dilution those holders experience when new tokens are minted.
If the ratio of token market cap to the treasury assets backing them stays approximately fixed, the market cap will increase or decrease at that ratio multiple of the treasury. In other words, token holders who stake experience the gains and losses of the treasury, but amplified. This is neither good nor bad, it’s just leverage… It increases both potential loss and potential gain. In the end, these protocols’ native tokens are a bet on their treasury, so the protocol had better have a compelling story about why their treasury growth prospects are worth the leverage risk.
AladdinDAO started with this problem in mind, and we have developed what we think is the most compelling decentralized solution in the industry. Our story is about algorithmically harnessing the power of the amazing Boule Council, about farming-and-holding the Best of DeFi, and about enjoying profit from, while simultaneously supporting, the best teams building the future of finance.
This new tokenomic structure has several very beneficial secondary effects that are worth mentioning:
- The Boule Council has more freedom to propose great strategies. In the previous system, to be meaningfully integrated with Aladdin, farms not only had to be on Ethereum mainnet, they had to offer a protocol native token as a harvestable reward. This technical restriction severely limited which of the Boule Council’s proposed opportunities could be integrated. Under the new system, there is no such limitation. More complex strategies that require multiple transactions are also no problem.
- Aladdin can be a diamond hand partner. Part of the Aladdin raison d’être is to support the best of teams and protocols in DeFi while they craft the future. However, with Aladdin’s old vault system there was no way to ensure that capital coordinated through its vaults would be truly “diamond handed”. With this change we have a much stronger narrative about how selected protocols benefit. Who knows? This could open up opportunities in the future for partnerships that could benefit the Aladdin community and selected projects!
- Aladdin improves its education public service by 100X with its Open Source Portfolio. Under the new model Aladdin will be managing a diverse DeFi portfolio entirely in the open, where the community can watch and learn from every step of the process, from research and selection to allocation and rebalancing. There is a big difference between sharing some good tips and demonstrating the construction of a solid, diversified portfolio. The educational value of being a community member continues to grow, and we can all level up!
- Aladdin can still rock the feel-good vibez, giving away that alpha. The new tokenomic approach supports the Aladdin protocol as much as it supports the ALD token holders and the selected protocols, and it does so without blocking or gating any of the hot alpha or amazing learning potential of watching the Boule Council do their work. Think of it like open-source software, anyone and everyone who wants can benefit from Aladdin’s research free of charge, and Aladdin is supported by providing a super-powerful, but ultimately optional, way to participate.
The new system doesn’t just improve on what we started from, it creates a whole new set of opportunities for people to participate who couldn’t realistically do so before. Now that the undeniable value created by the Boule Council can be linked to the ALD token performance, Aladdin is positioned to take off, and offer the best risk-adjusted reward opportunity in DeFi.