In this article, I want to give a brief overview of Aleo tokenomics. I would like to point out that there is not much information available today and tokenomics may change.

Like most projects, Aleo’s tokenomics is designed to align incentives for all stakeholders in the Aleo system as easily as possible. That is, the tokenomics should incentivize participants to do some work in order for the system to work and users have the coins to use what Aleo offers.

It was conceived that the system that is involved in Aleo will perform the following functions:

1. The network’s own token represents meaningful value;

2. The system rewards participants for their contributions to the security of the network;

3. Incentives do not encourage dishonest or malicious behavior;

4. It promotes the development and use of useful applications in the ecosystem;

5. It promotes decentralization, so that no single user group can control the entire system.

The unit of account is Aleo credits. Aleo credits will be used to pay transaction fees and pay miners. Aleo credits open up access to a key next-generation computing resource: zero-knowledge proof computing. Aleo credits are a natural way for the market to assess the value of zero-zero-knowledge proof computing proof for any program. Consequently, the price of this asset should roughly reflect the overall demand for zero- knowledge computing proof technology.

One important difference between Aleo and other networks such as Ethereum is that fees in the Aleo network are calculated in advance. In Aleo, there is no concept of “gas per transaction,” which usually makes applications unpredictably expensive to run on Ethereum. Whereas in Aleo, everyone knows in advance how many Aleo credits it will take to run a particular application.

Given the number of potential applications for this technology, we can expect zero-knowledge proof to become a critical computing resource (similar to bandwidth, storage, etc.) for the next generation of decentralized, scalable networks.

At launch, Aleo credits will be distributed among early beakers (investors), developers and community members, as well as a foundation or other organization that will provide grants and ensure further development of the network. Starting at genesis, new credits will be minted and distributed to miners in the network through a block reward. The table below summarizes the details of the overall economic model (note: the current block time is approximately 20 seconds).

The Aleo inflation graph will encourage early network users. It will help achieve a high degree of network security more quickly. To achieve this, a relatively high inflation rate is set at the beginning, which is then halved twice during the first decade. After the ninth year, the final halving will result in an emission of 12.5 Aleo credits per block, which are paid to miners simultaneously to ensure the security of the network as well as the stability of the tokenomics.

The tables below show the inflation curve for Aleo over the first 15 years and the emissions over those years.