When I drew the first APRO token distribution pie chart on the whiteboard, the team erupted into the most intense argument. Wang Wei slammed the pen down: 'This is just another carefully packaged wealth game!' Li Ming frowned: 'Without enough incentives, who will build the ecosystem?' And I stared at the circle divided into four pieces, suddenly realizing - what we designed was not a token distribution, but the initial life state of an ecosystem.
Token distribution: it's not about dividing cake, but about sowing seeds.
In the autumn of 2019, the three of us founders sat in that shared office in Hangzhou, the scent of osmanthus outside was distracting. On the table were more than a dozen white papers from other projects, each flaunting the same pie chart: team 15%, foundation 10%, private equity 20%... like some sort of industry-standard formula.
'Can we not do pie charts?' I suddenly asked.
Both partners were stunned.
I'm saying, 'What if we imagine tokens as seeds, rather than shares?'
This metaphor changed the entire design thinking. We no longer asked 'who should get how much,' but rather 'where should the seeds be sown to grow the healthiest forest?'
Founding team: 12%, but with five locks added
We reserved 12% for ourselves, which is considered restrained in the industry. But the key lies in the constraints—we designed a composite mechanism with a five-year linear release + three-year lock-up period:
The first lock: All tokens are locked for one year after the mainnet launch
The second lock: For the next three years, release 1/36 of the remaining part each month
The third lock: Of the released tokens, 50% can only be used for staking node operations
The fourth lock: 25% must be locked in the ecological fund pool for at least one year
The fifth lock: Individual monthly reductions must not exceed 0.5% of their holdings
Most strictly, we abandoned the common 'advisor share' found in traditional projects. Wang Wei insisted: 'Either participate full-time or don’t take tokens. For knowledge payment, please use fiat currency.' This offended many at the time, but later proved to be the wisest decision—avoiding token concentration in the hands of short-term speculators.
Foundation: 8% 'ecological incubator'
This may be the most complex part of the design. 8% does not seem much, but our foundation is not a traditional 'management committee', but a smart contract system with feedback loops.
Foundation tokens are divided into three smart vaults:
· Protocol development vault (3%): Reward code contributions through bounty mechanisms
· Ecological growth vault (3.5%): Distribution based on actual user activity of DApps
· Community governance vault (1.5%): Used to fund community proposals, decided by token holder votes
Each vault has clear trigger conditions and distribution algorithms. For example, for the ecological growth vault, we designed a 'User Quality Index'—not just looking at transaction volume, but also considering user retention, cross-application behavior, long-term staking ratio, etc. A volume-farming project may receive a small amount of incentives, but will soon be identified and down-weighted by the algorithm.
Ecological incentives: 65% 'slow release of wealth'
This is the largest part and also the most ingenious design. We abandoned the traditional 'mining release' model and created a three-dimensional incentive matrix:
First dimension: Staking security layer (20%)
This part of the reward is given to stakers running validation nodes. But it’s not just a simple 'the more you stake, the more you are rewarded,' but introduces an 'effectiveness coefficient.' Nodes need to maintain a high online rate, correctly validate transactions, and participate in governance to receive full rewards. A node with a large stake but frequently goes offline may earn less than a smaller but stable staking node.
Second dimension: Application contribution layer (25%)
Developer rewards are not predetermined, but dynamically allocated based on the actual ecological value created. We designed a 'AP value' (APRO Power) evaluation system:
· Core infrastructure contribution: High AP value weight
· Tool applications: Medium weight
· Simple tokens or clone projects: Low weight
· Malicious or junk applications: Negative weight, may be punished
Every quarter, the system will allocate tokens from the ecological incentive pool based on AP value rankings. Last year, a developer received significant incentives for a tool that helped users optimize Gas fees—because his tool genuinely improved network efficiency.
Third dimension: User behavior layer (20%)
This is the boldest design. Ordinary users can also earn token rewards through using the network:
· Long-term holding of tokens and participation in governance voting
· Forming positive interactions between different DApps
· Recommend new users and help them use it deeply
· Discovering vulnerabilities or providing improvement suggestions
This part of the incentives transforms APRO's economic model from merely a 'miner and developer game' into a collaborative ecosystem that involves everyone.
Community and airdrop: 15% 'open gene pool'
The last 15% is reserved for the most open part:
· Early testnet contributors (5%)
· Partner ecosystem (4%)
· Unallocated reserve pool (3%)
· Emergency pool for unexpected situations (3%)
Notably, the 'reserve pool' design is worth mentioning. We did not distribute all tokens but retained 3% as evolutionary reserves. If unforeseen demands arise in the future (such as needing to incentivize a new emerging field), the community can activate this reserve through governance proposals.
Inflation/deflation mechanism: The 'breathing system' of blockchain
On the eve of last year's mainnet launch, the three of us stared at the inflation curve in the simulation system until 3 a.m. It was not that we were afraid of inflation being too high, but that we were afraid it would be too regular.
'The growth of nature is not linear,' Wang Wei said, 'The ecosystem should have periods of prosperity and adjustment.'
Thus, we abandoned a fixed annual inflation rate and designed a dynamic adjustment mechanism based on network status.
Dual target inflation algorithm
Most chains only care about one goal: Security (through inflation incentives for staking). APRO sets two goals:
1. Security goal: Maintain staking rate between 60%-75%
2. Ecological vitality goal: Daily growth rate of active addresses
When the staking rate falls below 60%, the system will increase the inflation rate to attract more staking; when it exceeds 75%, it will lower the inflation rate to release liquidity. However, when the number of active addresses declines, even if the staking rate is normal, the system will moderately increase the incentive inflation for the application contribution layer to stimulate ecological construction.
Four triggering mechanisms of deflation
Deflation is not simply 'destroying tokens,' but four precisely coordinated mechanisms:
Transaction fee destruction (basic deflation):
30% of each transaction fee is permanently destroyed. But here’s a clever design—the destruction ratio is negatively correlated with network load. When the network is congested, the destruction ratio decreases (more fees are given to validators as incentives to process transactions); when the network is idle, the destruction ratio increases (accelerating deflation).
Invalid staking penalty (quality deflation):
If nodes act maliciously or remain offline for long periods, part of their stake will be confiscated. This portion of tokens will not enter circulation but will go into the 'ecological compensation pool' to compensate affected users.
Ecological recycling mechanism (efficiency deflation):
If a DApp's AP value is below the threshold for six consecutive months, its unused incentive tokens will be partially reclaimed. This is not a punishment, but a resource redistribution—shifting tokens from inefficient applications to efficient ones.
Governance decision destruction (community deflation):
Token holders can vote to decide to destroy part of the foundation or reserve pool tokens. This gives the community a regulatory tool in extreme situations.
'Breathing cycle' design
The most innovative may be the concept of 'economic breathing cycle'. APRO's economic model does not pursue eternal deflation or inflation, but is designed around an economic cycle of about four years:
· Construction period (high inflation, high incentives): Attracting ecological participants
· Growth period (moderate inflation, precise incentives): Optimize ecological structure
· Mature period (close to zero inflation, efficient incentives): Improve network efficiency
· Adjustment period (mild deflation, restructuring incentives): Clean up inefficient parts
Then enter the next cycle. This mimics the succession process of natural ecosystems, avoiding the impossibility of 'eternal growth.'
Value capture mechanism: Not just capturing value, but also creating value
The most difficult question in token economics is: What gives tokens value?
We rejected a simple answer: 'Because everyone believes it has value.' Instead, we designed a multi-layered value support system.
First layer: Use value (hard demand)
Each APRO token is the 'energy unit' of the network:
· Pay transaction fees (Gas)
· Staking to become a validation node
· Weight unit for participating in governance voting
· Access credentials for certain advanced features
But this is still not enough—if the demand is only this much, the value ceiling is very low.
Second layer: Ecological value (network effects)
This is our core design. The value of APRO tokens is bound to the growth of the total value of the ecosystem:
Cross-application value flow:
Points earned in one DApp can be exchanged for services in another DApp; assets gained in one game can be used as collateral in a DeFi protocol. APRO tokens have become the 'medium of exchange' in this value internet.
Monetization of proof of contribution:
The code contributed by developers, the feedback provided by users, and the governance participation of community members—all of these can be transformed into certain token incentives or rights through the 'proof of contribution' mechanism. Tokens have become the accounting unit for ecological contributions.
Third layer: Governance value (decision-making power)
This may be the most undervalued part. Holding APRO is not just holding an asset, but holding governance rights of the ecosystem.
We designed a tiered governance system:
· Basic governance (1 token = 1 vote): Parameter adjustments, small grants
· Important governance (requires staking threshold): Protocol upgrades, large fund usage
· Core governance (staking + credit rating): Economic model modification, security-related decisions
The key innovation is the 'governance delegation market'. Small token holders can delegate their governance rights to professional representatives and receive services provided by the representatives (such as regular reports, voting suggestions, etc.). This forms a secondary market for governance services, allowing tokens to gain capitalized value from governance rights.
Fourth layer: Evolutionary value (future options)
This is APRO's most unique design. Token holders actually hold a call option for the future development of the ecosystem.
Because of APRO's adaptive mechanism, the network will continue to evolve. Every protocol upgrade and every new function added may create new scenarios for token usage. Holding tokens is like holding 'shares' in this continuously evolving ecosystem.
We even designed an 'evolutionary dividend' mechanism: When the network significantly improves performance or security through upgrades, a portion of the new value (such as additional fees resulting from higher transaction processing capacity) will be distributed to long-term stakers through a special mechanism.
Reality check: When the model meets the real world
One year after the mainnet launch, we encountered our first stress test.
In March last year, the market fluctuated violently, and a large number of users staked in panic, causing the staking rate to soar from 68% to 82% overnight. According to the preset model, the system should have lowered the inflation rate. But data analysis showed that many of these new stakers were short-term speculators—they would withdraw quickly after the market warmed up.
If a mechanical execution model is used, it may lead to a sharp drop in the staking rate when the market recovers, triggering security issues.
We urgently initiated a governance proposal. After seven days of community debate, a temporary adjustment plan was passed:
1. Maintain the current inflation rate
2. But set a 30-day lock-up period for newly staked tokens
3. Use reserve pool funds to provide additional rewards for long-term stakers
The results were surprisingly good. Short-term speculators were filtered out, and true long-term participants were incentivized. A month later, the staking rate stabilized at 72%, and the network became healthier.
This incident deepened our understanding of what Wang Wei often said: 'The economic model is not a divine decree, but the skeleton of the ecosystem. It needs to be strong enough to support the body and flexible enough to allow growth.'
In conclusion: The economic model as the gene of the ecosystem
Looking back now, the most successful aspect of APRO's token economic model may not be a specific design, but its complete philosophical consistency.
From the beginning, we envisioned APRO as an organism, so its economic system should be the metabolism and blood circulation system of this organism. Tokens are not external 'fuel,' but 'energy carriers' generated by the system itself.
Recently, a young economist who just joined asked me: 'Mr. Chen, how did you have the courage to design such a complex model back then? Most projects choose simple and clear plans.'
I thought for a moment and gave her an answer that might not be very professional:
'You know, in nature, the simplest life forms only need one kind of energy currency (like ATP). But as life evolves, there are fat stores for energy, blood for transporting oxygen, and nerves for transmitting signals—more and more complex systems require increasingly refined value transfer mechanisms.'
'For APRO to become a complex system capable of self-evolution, it needs a complex economic model to match it. Simple models cannot support complex ecosystems, just as a single-celled organism's metabolic system cannot support an elephant.'
Outside, it is the season for osmanthus flowers to bloom again. Four years have passed, and those curves and formulas on the whiteboard have turned into a real operating economic system. Every day, tens of thousands of people trade, build, govern, and live in this system.
And I know that the real test is just beginning. Because the true value of an economic model lies not in how exquisitely it is designed, but in whether it can continuously promote the healthy growth of the ecosystem over a time scale of ten, twenty years.
This requires time, patience, and the wisdom of generations of participants. Fortunately, APRO was designed from the beginning for such a long run.@APRO Oracle #APRO $AT
