Alluo Explained
  • Welcome
    • 🧭 The Basics
  • Getting Started
    • πŸ’» The DeFi Web App
      • ❓ Connecting to the app
      • 🚜 Depositing into the farms
      • πŸ™Œ Other basics
      • 🏦 Importing your Mobile app wallet to Metamask
      • 🧬 Add the polygon network manually in Metamask.
      • ⛓️ Bridging Stablecoins from another chain
    • πŸ“±The Mobile app
      • πŸ—οΈ Setting up your account
      • 🏦 Depositing money into the app
      • πŸ™Œ Other basics
      • πŸ” Exporting your private key
    • πŸ“–Tech deep dive: Contract Address Library
  • Understanding Alluo
    • πŸ’΅ How does Alluo get the yield?
      • 🐰 Going deeper into the Alluo protocol rabbit hole
    • 🧐 FAQ
  • Tokens & Tokenomics
    • πŸͺ™ The tokens
    • πŸ‘¨β€πŸ”¬Tech deep dive: Interest Bearing {asset} token
      • Depositing
      • Withdrawals
      • IbAlluo on different chains
      • StIbAlluo and Superfluid
        • A closer look at the integration between IbAlluo and StIbAlluo
      • Using the IbAlluo contract directly to create streams
      • Liquidity Handler and adapters
        • Deposit process with the Liquidity Handler
        • Withdraw process with the Liquidity Handler
    • πŸ“ˆ Tokenomics
    • πŸ‘¨β€πŸ”¬Tech deep dive: Boosting yield by compounding rewards
      • Deposit into the Vault
      • Withdraw from the Vault
      • Redeem rewards
      • Automatic boosting with Alluo
      • FraxConvex Vaults
      • Managing withdrawal requests in IERC4626
  • Decentralisation and Trust
    • πŸ—³οΈ Trustless governance and execution
    • πŸ‘¨β€πŸ”¬Tech deep dive: Vote Executor Architecture
      • Off chain votes to on chain data
      • Onchain data verifcation
      • Automated execution of votes
        • Tokenomics
        • Liquidity Direction
        • Setting APYs on farms
      • Cross chain execution of votes
      • Manually submitting vote results onchain
    • ↔️Alluo Exchange
      • Interacting with the Exchange
    • vlAlluo Architecture
    • Contracts upgrades
    • Investment strategies
      • πŸ“ˆFrax Convex Finance
        • Adding new pools into the strategy
        • Investing into a pool
  • More Advanced Features
    • πŸ” Repeat payments, streaming IbAlluo
  • Product Updates
    • πŸ‘Œ Product Roadmap: Building the right products
    • πŸ’» Web App releases
    • πŸ“± Mobile App releases
    • 🏎️ Alluo Boost
  • tutorial projects
    • Example: USDC to streaming 1 IbAlluo per second
    • Example: Using IbAlluoUSD and Ricochet to do capital efficient DCA into ETH
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On this page
  • πŸͺ™ Supply
  • 🀩 Rewards for Alluo lockers
  • πŸ” Protocol Backstop
  • 🚰 Protocol liquidity
  1. Tokens & Tokenomics

πŸ“ˆ Tokenomics

This page dives deeper into how the tokenomics of Alluo works

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Last updated 2 years ago

πŸͺ™ Supply

The total supply of $ALLUO is currently 95,048,000 against a max of 200,000,000. For the most up to date numbers please check

85% of those 95m tokens are currently held in smart contracts.

🀩 Rewards for Alluo lockers

As discussed in the previous β€œthe tokens” section, vlAlluo token holders (i.e. those that have locked the Alluo tokens) will receive the difference between the APY given to depositors and that which is realised from the assets in the pools.

For example, if the realised APY on the stablecoin assets deposited is 15% and the advertised APY in the mobile app is 8%, vlAlluo holders earn the difference (7%) in CVX/ETH LP tokens.

How it works is as follows:

  • The protocol revenue (spread between the advertised yield and the amount paid to depositors) is converted into CVX

  • This CVX is converted to CVX/ETH LP tokens and added to the CVX/ETH Curve Pool

  • These CVX/ETH Curve LPs are staked on Convex for more CRV and CVX rewards (over 25%)

  • Fortnightly the protocol revenue cycle above is re-run AND the CVX/ETH pool CRV & CVX rewards are harvested, converted to CVX/ETH LP tokens and re-staked in the CVX/ETH pool

  • $ALLUO lockers maintain a share of these rewards relative to the amount of $ALLUO they have staked

This means that by locking you will get passive income in CVX/ETH and that the longer you lock, the more those rewards will continue to compound. Moreover, as a good partner to Convex we continue to accrue more and more CVX tokens instead of simply selling them once they are farmed.

πŸ” Protocol Backstop

Locking Alluo tokens also plays a role in backstopping the protocol against black swan events which would impact the mobile app users negatively. These black swan events come in two main forms:

  1. Governance attacks: There is a theoretical risk that a protocol could exploit Alluo for short term gains by buying large amounts of Alluo tokens, locking them and using their vlAlluo votes to direct liquidity to their own protocol in a way that resulted in losses for Alluo depositors.

    However, in such an event, the DAO could decide to slash the addresses involved in this attack. Having the vlAlluo tokens locked in the smart contract itself rather than sent back to the users wallet is important here, since it negates the possibility for the attacker to sell their vlAlluo on a secondary market once the votes have passed.

🚰 Protocol liquidity

Initially, we launched the liquidity for the $ALLUO token on Balancer because of its ability to handle uneven pools (e.g. 80–20 ALLUO-ETH pool) instead of the historical 50–50 pioneered by Uniswap.

The ability to have an uneven pool minimising impermanent loss was particularly important because historically, $ALLUO lockers were automatically locking their tokens inside an 80–20 ALLUO-ETH pool.

Given that locking now simply locks the token away without providing liquidity, this has become less important. So a decision was taken that only the Alluo DAO treasury would provide liquidity for the ALLUO-ETH pair.

Of course, that doesn’t mean that others cannot go and add liquidity side by side with the treasury but we haven't provided incentives to that pool just yet.

You are now ready to buy or sell $ALLUO for $ETH, $USDC or any other coin that is listed on Uniswap.

Smart contract exploits: If the protocol suffers an exploit where there are unexpected losses of funds beyond a level agreed by the DAO, vlAlluo holders will be asked to compensate for the losses, this is akin to the . We will introduce a backstop feature where vlAlluo holders insure losses beyond a certain threshold (for example for losses more than 10%) and with a cap (for example not beyond 20%). This threshold is configurable per asset, and is controlled by the DAO.

To do so, you simply navigate to . When clicking on "Select token", if $ALLUO isn't initially found, simply add $ALLUO’s ethereum address: 0x1E5193ccC53f25638Aa22a940af899B692e10B09 in the search bar and then click on Alluo.

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