Genesis allocation

Assets that have been allocated to an ecosystems treasury at the genesis of the network

A genesis allocation means that at the beginning of the network a percentage of the total coin supply will be allocated to the ecosystems treasury. The founding entities might have full control over how these assets get used in the short and medium term. Over the long term the assets will either be used up by initiatives that get funded or the stewardship over the remaining assets will ideally be pushed towards the community so that they can influence how those assets get used rather than centralised actors. A genesis treasury allocation is often done to help with bootstrapping the ecosystem by funding different protocols and applications that bring new use cases to the network. These initiatives could help with generating more demand for the network. Some ecosystems might decide to manage these assets over a much longer time horizon by only allocating a small percentage each year to help fund ecosystem initiatives.

Very high short term income potential (Score - 5)

A genesis allocation of assets to support the ecosystems development mean that funds will be available from the start of the networks launch and these assets could then be used to help with maintaining and improving the network. These assets could also gradually be made available over time based on a release schedule.

Low long term income potential (Score - 2)

A genesis allocation does not provide an ongoing and reliable income source for the ecosystems treasury over the long term. The genesis allocation of treasury assets could have a long term impact if they are slowly distributed over time. Some ecosystems might even have the ability to stake their assets or use DeFi protocols to better maintain the value of the remaining assets over a longer time period. This approach could be effective for some ecosystems over the medium to long term. The larger the ecosystem is the more difficult it could become for a community to agree and effectively execute any complex asset management approach.

Low incentive complexities (Score - 4)

The allocated genesis assets can be used for any impactful initiatives that require funding after the network has been launched and the assets become available. There aren’t any incentive complexities around how these assets are gathered as they have been pre-determined and set aside for the benefit of the wider ecosystem. These assets have not been taken from anyone and the source of the income would also not be influenced by one community member more than another. All coin holders of the network could participate in determining how these genesis assets could be used. The main complexities surrounding this income approach are that the founding entities could have a temporary or ongoing control over these assets. This would mean a small group of actors would have a larger influence over how these assets are used over the rest of the community. An influence that might not align with the preferences of the wider community. This should hopefully be a short term problem as ideally the stewardship over any remaining ecosystem treasury assets will be pushed towards the community once the right systems and processes are in place.

Very low game theory risks (Score - 5)

The genesis assets are already pre-determined prior to the launch of the network. The assets are then available for the ecosystem to use to maintain and improve the network and wider ecosystem. There are concerns about how these assets get disbursed and who has influence and control over those decisions however this is more of a funding related problem rather than an income one.

Total score = 16 / 20