Token & Tokenomics

Tokenomics

ALVA, the native token of the protocol, operates as an ERC-20 utility token with diverse functionalities within the platform. Its roles include facilitating access to governance, serving as a reward mechanism, and providing entry to software portals. Notably, each ERC-BTS minted on the platform incorporates ALVA at a fixed 5% weighting.

This strategic inclusion of ALVA in ERC-BTS tokens introduces deflationary pressure to the token supply. As additional ERC-BTS tokens are minted, ALVA is systematically withdrawn from the circulating supply, contributing to a reduction in token availability. The ALVA included in each ERC-BTS is acquired from the market, thereby intensifying buying pressure with every new ERC-BTS creation.

ALVA operates with a capped total supply of 200 million tokens. The original ERC-20 version of the token possesses the capability for both minting and burning, albeit within specific parameters outlined in the smart contracts. This controlled approach ensures the adherence of ALVA token dynamics to predetermined guidelines and safeguards against any unwarranted alterations. The governance token of the Protocol, known as veALVA (voting-escrowed ALVA), operates with a unique set of characteristics. This non-transferable token is exclusively attainable by staking ALVA tokens within the dedicated platform.

veALVA plays a crucial role in the governance framework of Alvara. Users utilize veALVA for voting on all proposals within the Alvara DAO and participate in the weekly gauge voting process.

The decay of a user's veALVA is directly proportional to the duration of their ALVA lock. Notably, the decay period undergoes a reset if a user decides to add to their lock. Additionally, if a user opts to lock their ALVA indefinitely, there is no decay applied to their veALVA. This unique decay mechanism introduces a dynamic element to the governance token, aligning with user actions and commitment levels on the staking platform.

Utility

The ALVA token plays a pivotal role within the Alvara Protocol.

Voting Power:

Users are required to stake their ALVA tokens on the dedicated platform to acquire veALVA, which serves as a voting asset within the Alvara DAO. veALVA is instrumental in voting on proposals and participating in the 'gauge weight voting'—a weekly event where users allocate veALVA to their chosen BTS fund to receive that week's inflationary ALVA rewards.

Inclusion in Every ERC-BTS:

Each ERC-BTS minted on the Alvara platform incorporates the ALVA token with a minimum weighting of 5%. This ALVA is acquired from the open market rather than being sourced from a reserve. This distinctive feature exerts upward pressure on ALVA's market price with every new ERC-BTS launch and additional ERC-BTS LP creation by platform users. Simultaneously, it removes a percentage of the ALVA token's supply from the circulating market, influencing its scarcity and market dynamics.