Eye on the Supply: Aion’s Token Distribution Analyzed

(Read parts 2 and 3 of this series)

One of the main features of distributed ledger technology is that it creates an immutable, shared, public record of transactions. This record allows us to trace tokens all the way back to their origin — the smart contract that generated them. This article intends to do that with Aion: go back to contract creation and examine how the Aion ERC20 token supply was initially distributed, what has happened since, and what the future holds.

The initial creation and distribution of Aion ERC20 tokens was on October 11, 2017, when 465,934,586.66 tokens were distributed to 1,477 addresses.

  • 239,956,299.06 (51.5%) of those tokens were set aside for the TRS Contracts (explained below).
  • 186,413,834.66 (40%) of those tokens were sent to addresses controlled by the Aion Foundation, the Founding Organization (Nuco), and Partners (collectively “Aion” or “Aion Founders”).
  • The remaining 39,564,452.94 (8.5%) tokens were sent to private addresses.

To raise startup funds, Aion originally planned to conduct a private pre-sale, a public pre-sale, and finally a public sale. Any remaining unsold tokens would be split 50/50 between Aion Founders and early purchasers through Aion’s Token Release Schedule (“TRS”) program.

  • 30,000,000 tokens were sold in the private pre-sale for $0.50 per token ($15 million raised).
  • 9,564,452.94 tokens were sold in the public pre-sale in tranches from $0.75–1.00 per token ($8,010,994 raised).

After raising $23,010,994 total during the pre-sales, Aion determined that it had raised sufficient capital and cancelled the public sale. The roughly 240 million tokens that had been set aside for potential public sale would be distributed through the TRS program, instead.

The TRS program was intended to incentivize long-term holding by early purchasers and to demonstrate Aion’s long-term commitment to the project.

The TRS is executed by two separate contracts: one for Aion Founders and the other for early purchasers (regardless of whether purchased during the pre-sales or on the secondary market, i.e. EtherDelta). The unsold tokens were split evenly between the two contracts. Participants had to send their Aion tokens to a contract address by early December 2017 to opt in. A participant’s initial contribution plus a proportional share of the unsold tokens would then be distributed monthly through the contract.

  • Purchasers contributed 37,216,967.28 tokens, plus 119,978,149.53 unsold tokens (322.4% bonus), for a total of 157,195,116.81 tokens distributed over one year (9,824,694.80 tokens monthly after initial distribution; see schedule, below).
Purchaser TRS distribution schedule. Percentages refer to total of initial contribution plus bonus (For example, if a participant contributed 100 tokens, the bonus would be 322.4 tokens, and the total amount distributed through the TRS would be 422.4 tokens. The initial distribution would be 132 tokens and 26.4 tokens would be distributed per month thereafter through November 2018).
  • Aion Founders contributed 184,913,811.66 tokens, plus 119,978,149.53 unsold tokens, for a total of 304,891,961.19 tokens distributed over three years (8,469,221.14 tokens, or 2.78% of the total, monthly through November 2020; distributions fall about a week after the purchaser distribution dates, above).
Graphs showing distributions over time. Same data set used for both graphs: First/Left is overlaid (comparison); Second/Right is stacked (added together).

The TRS distributions do not necessarily go directly to sale on the open market— in fact, it appears that the vast majority are being held.

All 2296 Purchaser TRS participant addresses and Aion Founders TRS addresses can be reviewed by the public.

When the author last checked the Purchaser TRS participant addresses on May 9, 2018, 78.83% of the total tokens distributed to Purchaser TRS participants by that date were still held in participant addresses (This was done manually with individual API calls and a spreadsheet. The author invites anyone with the technical know-how to automate the process so real-time statistics can be made available upon request).

Similarly, as of this writing on July 8, 2018, Aion Founders still hold 43,852,847.09 (72.14%) of the tokens distributed through its TRS. Founder Matt Spoke mentioned recently that, as Aion completes its transition to a not-for-profit foundation, additional accounting and financial reporting will be made available to the public.

The total number of addresses holding Aion ERC20 tokens as of this writing July 8, 2018 has grown significantly to 20,050 — over 13x the number of Aion addresses when the tokens were minted and nearly 9x the number of TRS participant addresses.

The future distribution of tokens between the public and Aion Founders will not remain as shown in the graphs, above.

Aion has already announced its bounty, grant, and AionVentures programs, which will incentivize building and development on the Aion main net by offering tokens from the Aion Founder’s reserves to ecosystem contributors. Additionally, the current monetary policy on Aion’s proof of work network has a 1% annual inflation rate paid out as block rewards to miners, and this may change when Aion’s hybrid consensus protocol (delegated proof of stake plus proof of intelligence) is released in 2019.

As an added twist, through Aion’s token bridge, the total supply will exist on and across both the Ethereum network as Aion ERC20 tokens and Aion’s main net as native Aion coins. It will be interesting to watch the token migration between the two networks after the bridge is released later this year. In the meantime, check out the Alpha version of the token bridge in action and try it for yourself.

Stay tuned to Aion’s Twitter, Reddit, and Telegram channels to learn more about the project as it develops.

None of the above is offered as legal or financial advice. While the author is an attorney, he is not your attorney, and you should always consult with someone one-on-one regarding the particulars of your situation before making any significant legal or financial decisions. The author holds Aion and Ether.

Joseph is a Chicago trial attorney interested in blockchain technology and alternative dispute resolution.

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