Aelin

Aelin is a new decentralized deal coordination protocol. This SIP leverages the established decentralized governance framework of Synthetix to launch this new protocol in a fair and transparent manner. Half of the initial supply of AELIN tokens will be distributed to SNX stakers as a sign of appreciation for the effort that has gone into Synthetix governance enabling Aelin to launch via this SIP.

Establishing a new protocol and community is a challenging proposition, there are very few examples of projects that have been fair launched and managed to become self-sustaining. By leveraging the existing Synthetix governance process and rewarding SNX stakers Aelin will be able to create a new governance system that inherits the legitimacy of Synthetix governance. The decision to leverage Synthetix governance relied on the past success of Thales and Kwenta in establishing independent communities.

Aelin is a new protocol and will have its own token, community, and governance system. Initially, Aelin v1 will be governed by the Aelin Council, a DAO which will be voted on by SNX stakers. The weighted debt of SNX stakers will be used to vote on 5 Aelin Council members.

In v1 the Aelin Council will be responsible for guiding the protocol towards v2, onboarding and paying core contributors, treasury management, and organizing the community. The initial stipend for Aelin council members will be 0.2 $AELIN per month. For v2 and beyond, the roles, responsibilities, and stipends for the Council and any other governing bodies will be decided by the Aelin community; governance will change over time to suit the needs and desires of the Aelin token holders and protocol participants.

For simplicity, the initial format of Aelin Improvement Proposals (AELIP) will follow the Synthetix Improvement Proposals (SIP) standard, which has been refined by Synthetix over time. Anyone from the Aelin community may submit AELIPs and be rewarded in an amount decided by the Aelin DAO.

The Aelin contracts have been written by a team of volunteer engineers. It will be up to Aelin governance to decide whether to utilise funds from the AelinDAO to reward these efforts. The contracts will be deployed once this SIP has been approved by the Spartan Council and after they have been audited.

The purpose of these contracts is to create a new protocol that satisfies the following high level specification: Aelin enables (a Sponsor) to create a pool that anyone (purchaser) can deposit funds into. In exchange for their deposit they get a token representing a claim on the pool of funds. The sponsor then structures a deal with a counterparty (the Holder). The Sponsor and the Holder formalise the deal terms in a Deal Contract. Once the terms are finalized, conversions are enabled between the pool contract and the deal contract. aePool token holders can choose to redeem their aePool tokens for the underlying funds in the pool, rejecting the deal terms. Alternatively, they can redeem their aePool tokens under the terms of the deal. The protocol collects a fixed percentage of each deal determined by protocol governance, 2% initially. The Sponsor can also elect to capture a percentage of the deal in addition to this protocol fee. In both cases, these fees are paid in tokens under the deal terms.

Over the last few years the crypto fundraising process has matured significantly. We see far fewer huge pre-product raises. Most seed rounds are in the low single digit millions. The issue is that this means it is almost impossible for the wider community to participate in early stage projects. There are solutions such as LBPs by Balancer and other projects, but Aelin will allow for a project to launch a new token with a fixed outcome in terms of valuation without needing to negotiate with thousands of people or relying on a market driven mechanism that may result in a highly variable outcome. Using Aelin a pre-token project will be able to find a sponsor with a pool of funds that meets their funding needs and negotiate a reasonable valuation with vesting terms that ensure long term alignment. Additionally for established projects OTC deals that help generate treasury liquidity will be possible resulting in much wider token distribution. There are many other novel use cases, including NFT fractionalization and distribution.