Builder's Note: AO is a financing ecosystem that does not require a license

The story of Web3 startup projects "dying in the womb" may be playing out every day. Against the backdrop of rising global economic uncertainty, investors are becoming increasingly cautious about investing in Web3 projects. Funding is crucial for the launch and development of a project. Little known is that the AO Network has pioneered a permissionless financing ecosystem, providing developers with vast development prospects.

AO Economic Model ------ The Cornerstone of Innovative Financing Models

The AO white paper clearly outlines the design philosophy of its economic model, which itself is an innovative financing model aimed at attracting developers to actively participate in ecosystem building.

• Fair distribution, no reservations: The distribution mechanism of AO tokens is highly innovative. Unlike many projects that reserve a large number of tokens for teams or investors, AO has no presale, no advisor allocations, and 100% of the tokens are distributed to the community. Of these, 36% are allocated to AR token holders to incentivize them to contribute to the security of the AO Network's (Arweave) base layer; the remaining 64% is used to incentivize bridging external assets to the AO Network to promote economic growth in the ecosystem.
• Facilitating yield-generating asset bridging into the AO Network: The AO Network encourages users to bridge staked assets like $stETH and $DAI into the AO Network. As a reward, users will receive 64% of the newly minted AO tokens.

As you can see, the AO Network adopts a decentralized fund management model, using the yields generated from users' staked assets to drive ecosystem growth. This innovative financing model creates an equal competitive environment and sustainable funding sources for all developers, ensuring that anyone can participate in building the AO ecosystem without barriers.

It Seems Like stETH and $DAI Minting, but It's Actually "Developer Minting"

The permissionless financing model of the AO ecosystem is not fully recognized by the public. One of the initiators of AO, Outprog, has interpreted this financing model in the article "Developer Minting: An Interpretation of the AO Economic Model," proposing the "developer minting model" and conducting an in-depth analysis of its operational mechanism.

• Locking cross-chain assets to obtain AO tokens: Developers can create smart contracts on the AO Network and encourage users to lock cross-chain assets like aoETH and aoDAI in these contracts. In this way, developers can earn AO tokens minted from these aoETH and aoDAI as rewards.
• Project value determines returns: The success or failure of a project directly determines the amount of aoETH users are willing to lock, which in turn affects the AO token rewards developers receive. This mechanism incentivizes developers to build truly valuable applications, as only high-quality applications can attract users and provide developers with sustainable returns.

However, the beneficiaries are not just developers. For investors, the developer minting model also offers a new investment approach. Investors can share in the returns from project development by staking or locking aoETH and aoDAI in developer contracts. This method reduces investment risks and allows investors to participate more directly in the project's development.

Responsive Projects ------ Permissionless Financing Platform Veritas

Veritas is an outstanding project that "debuted" at the Arweave India community hackathon, following the developer minting philosophy, aiming to create a decentralized, permissionless financing platform.

In terms of positioning, Veritas acts as a "financing aggregator" for the AO ecosystem—providing project parties with a convenient financing channel, quickly raising funds by exchanging staked $aoEth for $AO tokens; users also gain the opportunity to invest in early-stage projects by staking $aoEth to receive the project's native tokens, effectively exchanging $AO for higher potential returns.

Currently, Veritas has launched its official website and established partnerships with multiple projects. Moreover, Veritas has recently developed a new tool called the "On-chain Analytics Dashboard," where users can view basic project information (team composition, token information, milestones) and support multi-dimensional analysis of project token distribution, user metrics, and network message volume. Moving forward, Veritas should focus on launching its core staking feature.

Conclusion

The AO Network has built a permissionless financing ecosystem through its unique economic model design. This is essentially a developer minting mechanism, allowing developers to obtain funding automatically by building valuable applications without relying on traditional financing channels. Of course, this innovative model provides "unprecedented" opportunities for all builders, bringing new ideas to the development of the blockchain industry.