https://twitter.com/kaiynne/status/1501276619108880385

Background.

• Aelin is a protocol for SPAC’s on-chain.
  • A permissionless multi-chain protocol for capital raises and OTC deals. No need for VC's, Aelin decentralizes fundraising
• Tokenomics of AELIN
  • Staking
    • Every “deal” that passes sends a % of the deal’s value in fees to AELIN stakers (see SIP-180).
    • Currently fees are collected in the Aelin contracts - fee model not worked out yet.
  • Inflation
    • AELIN has an inflation schedule which issues new AELIN to stakers.

Problems:

• How can we scale the Aelin tokenomic model to multiple chains (Ethereum L1, Optimism, Avax)?
  • Every network has its own Aelin deployment.
    • Each with their own pools and currencies.
    • Each with their own stakers.
    • Inflation rewards distributed on each network.
  • Would we aggregate the staking information of all networks and then proceed to issue them on one chain?
    • Problem: what if the fees are in a different currency (e.g. fees in AVAX, aggregation occurs on Optimism - needs conversion).
    • Problem: system is complex. You need to measure rewards on all networks and then accumulate them on just one. It’s convoluted. Might require a separate ChainLink oracle for aggregation due to limits on gas.
• What if the benefit were “implicitly” issued to stakers via deflation?
  • Buyback and burn model.
    • This mitigates the issue of “dust”, where the reward is too small for a staker to claim.
    • Can occur multichain by selling the fees in the native token (ETH, AVAX, etc) in exchange for AELIN, and then burning the AELIN.
    • But now there’s another problem - it rewards passive holders who don’t do any work.
• How do we only reward tokenholders who stake and not just hold, in the buyback and burn model?

  • Offset the deflation “benefit” given to all tokenholders from the token burning by issuing an inflationary benefit on top ONLY to stakers.

    
    fees = deal fees for period
    protocol executes buyback-and-burn
    	sells fees for AELIN
    	burns AELIN, deflating the supply
    
    reward for passive holder = X% deflation
    reward for staker = X% deflation + X% inflation
    
    thus passive holders are net 0 profit, whereas stakers are X% in profit.
    

Great, so now you have a model where you can allow staking on multiple chains, and the fee distribution occurs seamlessly due to a buyback-and-burn model.

Now the final problem:

• How do you incentivise more staking liquidity on different networks?
  • e.g. say Aelin Protocol determines that there is a large market on AVAX for Aelin-style raises.
    • AVAX is cheaper to use.
    • Lots of projects looking for funding on AVAX, but only from AVAX tokenholders. Don’t want to switch networks.
  • You could use Curve-style gauges.