Holders of $ADS tokens can operate nodes for Alkimi, which validate transactions in the AlEx state channel. Each node will cost 50,000 $ADS for Guardian nodes and 200,000 $ADS for Master nodes.
Any business wishing to use the programmatic exchange will need to pay a fee as a percentage of the value of the transaction. The most basic transaction involving standard display will be 1.5% from buyers and sellers. The percentage cost will increase as the bandwidth required increases, such as for video formats.
100% of the fees generated by Advertisers and Publishers buying and selling digital ads are distributed to node operators based on their contribution to the network. Node Operators will be rewarded in st$ADS tokens from the fees generated by Alkimi’s Decentralised Ad Exchange (redeemable as $ADS tokens from the Liquidity Pool); Exchange Users will pay in FIAT currency converted to USDT to facilitate buybacks of $ADS tokens. Alkimi will undertake the buybacks of the token to reward Node operators.
Initially, token buybacks will be split 50/50 between the liquidity pool and the open market. Token buybacks will allow Alkimi to increase overall liquidity as we onboard new network participants. The token buyback mechanism will provide consistent network growth while avoiding hyperinflation. Any inflation in token price will be countered by changing collateral requirements, allowing for new participants to enter the ecosystem without it being prohibitively expensive.
Bandwidth Providers (Node Operators)
Bandwidth Providers are Node operators within Alkimi’s ecosystem. Those wishing to operate a node can do so by holding the requisite amount of $ADS and exchanging it for an Alkimi Node NFT. Nodes are crucial to the ecosystem as they validate Alkimi’s Decentralised Ad Exchange transactions.
There are two different types of Node
Master Node 200k $ADS — validate Ad auctions (counted as four nodes for reward purposes)
Guardian Nodes 50k $ADS — verify the data from the master nodes
Node operators are required by the Exchange to maintain the level of transactions per second (TPS) needed for the programmatic exchange to work. The number of transactions necessary for the network determines the number of Nodes required.
Transaction — A query becomes a transaction if the bid wins the auction and an ad is rendered on publisher’s website.
Query — Queries are advertisers submitting bids in an auction hosted for a particular website, IP address, cookie or relevant context on a page.
A Cluster of Nodes provides bandwidth, with each node cluster providing a maximum of 7,000 TPS. The initial tranche of Node Operators will provide a maximum 21,000 queries every second. Node Operators will be required to mint and hold a NodeNFT acting as the digital receipt for their node.
Providing 18 Billion queries per month (not every query is one validated transaction on the exchange) will be sufficient to maintain the ad exchange and allow access to data captured on the ledger, such as losing bids. Anyone can run and keep their node without a 3rd party vendor via the documentation provided by Alkimi.
If $ADS holders wish to run a node but don’t meet the 50,000 $ADS minimum threshold, they can provide liquidity to the liquidity pool allowing for other network operations and services.
The rewards will be pro rata minus any fees and expenses. Nodes will help strengthen the network’s decentralisation, making it more robust while maintaining high levels of transactional bandwidth.
Rewards for Node Operators
The total income (TI) from the various streams outlined above is distributed between Node Operator rewards (NR) and lpADS stakers (y).
As the network grows, more rewards incentivise more Node operators and st$ADS stakers.
Node rewards (NR) Calculation:
NR(n) = log(n) / log(2000)
n = the number of nodes and is set by Alkimi based on current throughput requirements
TI = y + NR — As n increases, NR increases, and y decreases.
n= 5 (nodes) then NR(5) ≈ 0.01 = 1% (NR =1% : y = 99%)
n= 2000 (nodes) then NR = 1 = 100% (NR = 100% : y = 0%)
The current limit on the number of nodes based on the circulating supply is 2000. Nodes will be providing 8,750,000 TPS at maximum node operation. For context, the largest independent exchanges reach a maximum throughput of 2,000,000 TPS. Alkimi retains the right to amend the $ADS holding requirements should further nodes be required.
Node selection criteria
During testing and to increase early stability, Alkimi will onboard 20 nodes (10 Guardian and 10 Master nodes) (n=20) to provide the necessary bandwidth of 7,000 TPS.
Given the current growth in AlEx users and correspondingly increased bandwidth requirements, more node operators are now required, n=20
In this way, at least ten users are incentivised to run nodes. If 20 users meet the criteria to run Alkimi nodes, they will share rewards for 20.
Alkimi will employ selection criteria in the early stages to control node numbers and ensure network security. Bad actors (nodes) will be unable to redeem their staked $ADS, or their nodes will be ineligible to validate transactions.
Node selection criteria. For every two nodes needed, 1 of each node type will be distributed as follows:
For the pure Alkimist:
- Hold an Alkimist NFT
- Bid $ADS (tokens redeemable when converting the NodeNFT back to $ADS)
- Bid >50k for a Guardian node. These will be locked in exchange for a GuardianNodeNFT.
- Bid >200k for a Master node. These will be locked in exchange for MasterNodeNFT.
For the newcomer:
- Enter the ERC20 address into the draw event
Alkimi will use tokens set initially aside for Reserve, Staking Rewards and Platform tokens and stake them for st$ADS in the liquidity pool. The APY from both will be used to fund exchange user acquisition and run the organisation in perpetuity. Following this strategic move, there will be no more token inflation via the platform rewards (discontinued) or incentives for publishers/advertisers (discontinued).
Publishers and Advertisers using Alkimi Exchange will generate fees. Fees are distributed to Node Operators validating transactions. Additional fees generated from reports, Invoice Factoring, Liquidity Provisioning and additional third parties developing products and services deliver a generative economy that will exhibit perfect reflexivity.
At this point, the ecosystem will reach a level of decentralisation which will provide security and aligned incentives for all users; Advertisers, Publishers, Node Operators and liquidity providers. This will create an escape velocity for the ecosystem, allowing the financial flywheel to be self-perpetuating.