Tokens may be new to you.
Even if they are not, tokens can be confusing because different applications use them in very different ways. So it may be most helpful to say what they are not, before diving into the purposes of what they offer.
ArDrive tokens (ↁ) are not used for paying to get your data uploaded onto ArDrive. We plan to offer that through local currencies as soon as June 2021 (or you can use the Arweave token to pay for permanent data storage).
Instead, ArDrive tokens have two main purposes:
- Rewards: Receive a share of the tips generated from all ArDrive transactions on the network.
- For Governance & Ownership: Ability to vote in the strategic direction of the application and community.
These initial purposes may be expanded upon in future releases of ArDrive based on the feedback from the community. But for now, let’s look at both of these purposes, as well as how to get these tokens in more detail.
ArDrive Tokens: Usage Rewards
As users upload data through ArDrive, each transaction includes an additional fee on top, called the “Community Fee”.
These community fees are split amongst the members and token holders, and help support the development of ArDrive.
Now, for example, when someone uploads data to ArDrive and pays a 25 cent community fee it is not divided between all the token holders. Instead, after each transaction on ArDrive, a token holder will be chosen at random to receive this additional fee.
The fees are called “community” for a reason, as they reward the community members. They are fairly split between all members based on the percentage of tokens they hold. Therefore, if you hold one 0.1% of the all ArDrive tokens you will, over time, be rewarded with 0.1% of the community fees.
It is important to note that not all of the tokens are held by users of the application, but a percentage of the tokens have been held back to accrue funds used for application development and supporting community projects and bounties. You can see the full allocation breakdown in the Community Improvement Proposal.
What type of currency does your community fee get paid out in?
Your community fee does not get paid out in a currency but in Arweave tokens (AR). This is not to be confused with ArDrive tokens (ↁ).
The Arweave network is the network that ArDrive uploads all of its data to and the Arweave network has its own coin/token that they use as a form of payment called the AR. Unlike the ArDrive token, the purpose of AR is for permanent storage payment.
In the future, you will be able to use a type of currency such as USD or the Euro to upload your data onto the network, but what ArDrive will do is convert that currency to AR so that it can be put to use on the network.
A portion of that transaction will be profit in AR that gets paid out to the ArDrive token holders. You can then use that AR earned to upload more data permanently onto ArDrive.
To learn more about Arweave, please look at our blog post ‘What is Arweave?’
Keeping track of community rewards
A great aspect is that you can track all of the community rewards you are receiving from ArDrive tokens at https://viewblock.io/arweave.
Simply copy and paste the wallet address that you have been given into the search box at the top of the page. This will allow you to check how many ArDrive tokens you hold and all of the profits that they are producing!
You can also use the new ArConnect Wallet (shown above), which will display your Arweave and ArDrive token balances right in your Chrome browser.
It’s very cool to look at your rewards trickle in!
ArDrive Tokens: Governance
There are currently ↁ7,172,550 in supply with a soft cap of ↁ10,000,000. All of this was laid out by the founders of ArDrive and the tokens have been used to give to contributors and users of the application. The creation of tokens itself is one of the key aspects to the overall governance of ArDrive, and can be voted upon by the community.
If you own ArDrive tokens you can now put yourself into position to be able to vote on community projects and the strategic direction of the app. This is done through a process called ‘staking’.
What is staking?
Owning ArDrive tokens does not automatically give you the ability to vote on community initiatives. Instead, the owner must ‘stake’ their ArDrive tokens to be eligible to vote.
Staking is locking your token up for a set period of time – between 7 days and 3 years. Locking up of your token prevents you from selling those tokens during the amount of time locked up, but it gives you the ability to vote on community issues.
So why would someone lock their tokens up for 3 years and not just in 7 day periods?
The token system is trying to balance long-term and short-term incentives and to provide an equitable balance of power amongst token holders.
Therefore, one of the designs of the system is to create extra voting power to those who stake their tokens for longer periods of time. For example, if you stake your tokens for one year then you will get 2 times the number of votes.
Here are the multiplication factors for staking:
- Less than one year = 1X
- One to two years = 2X
- Two to three years = 3X
Therefore, if you stake and lockup your tokens for 3 years you will multiply those amount of tokens by 3X for voting purposes. So ↁ10,000 staked tokens for three years will get 30,000 worth of votes.
It is important for the community that is being built to have long-term holders of the tokens that have a vision of building a great application not only for the present, but also for the future.
For the ↁ7,172,550 there will be a maximum of 21,517,650 votes. However, in actuality, it will be much lower than that as some people will not stake at all, most will not stake for the 2 to 3 year period, and some tokens are set aside to be paid to developers and operations.
A owner of ArDrive tokens can lock up their tokens at our community page on community.xyz.
What issues will be voted on?
Votes within ArDrive are divided into Major issues, which affect the entire community, and Minor issues, which are smaller in scope.
- Major votes happen on the first of the month.
- Major issues will include:
- Minting (or increasing) the number of ArDrive tokens in the system – greater than ↁ10,000
- Changes to the Community Improvement Proposal
- Setting of Fees
- Minor votes happen every Wednesday.
- Minor issues will in include:
- Minting or burning a small number of ArDrive tokens – less than ↁ10,000
- Individual concerns or behaviours from a community member
How do I get ArDrive tokens?
There are three ways that you can get ArDrive tokens: contribute work, buy tokens, or usage and referral rewards.
ArDrive tokens can be awarded to community members who have the skills to contribute to our project. This can include technical as well as soft skills, part time, full time or bounty work. The ArDrive community is always looking for passionate core team members to help fulfill their mission.
An exciting and unique way to get ArDrive tokens is through simply using the application and telling others about it.
This is what is being referred to as the ownership economy within the Web 3.0 landscape. These new applications are a paradigm shift that are aligning the interests of developers and users so that both can take part in the growth of the application.
For example, when ArDrive launched its application it gave away ↁ150,000 over a two month period to the first users of the application. The community provided valuable feedback in directions that ArDrive can go to offer a great permanent file management system.
ArDrive will be releasing more usage reward programs in the future to reward those who use the application and want to see ArDrive gain a significant foothold into the online file management space.
For all our current programs, check out our rewards page.
The ArDrive team is developing a referral program that will be giving upload rewards and ArDrive tokens to those who help grow the community.
As rewards are given out people can always sell those tokens, but it is our hope that a long-term community will develop that will collectively build, profit-from, vote and share in a world-class product that preserves our memories for future generations.
ArDrive tokens are an exciting part of our community. They are actually the glue that holds this community together.
We are excited by the potential of how the ArDrive tokens can both reward our users of the application and create long-term stakeholders in this app.
If you do not have any ↁ yet, it is as easy as uploading some files to get some!