The Aragon Network Token (ANT) is the heart of Aragon. It allows Aragon’s decentralized community to express opinions and come to consensus on decisions. Without this, Aragon cannot become an unstoppable force in the world.
ANT also trades on open markets. This means that the price of ANT reflects the value of Aragon governance as well as general market sentiment. Considering that ANT has a price, it can be bought and sold. This makes ANT not only a utility token, but a unity of exchange. As something that holds monetary value, but can also be used to express opinions related to Aragon, it’s a great tool to reward Aragon community contributions.
The value of Aragon governance is related to the value of Aragon. If no one cares about Aragon, no one will want to govern it. If Aragon is awesome and highly valuable, people will want to engage in governance because they will care about the outcome of decisions. Aragon is currently bootstrapping the development of the Aragon network and applications built on top of it via Aragon treasury funds. These funds were obtained via an ICO. While there is some speculative potential in the AA’s ETH holdings, for the most part, Aragon treasury funds go one direction: down. Once treasury funds run out Aragon will need to find alternative methods to fund growth.
Aragon’s post-treasury growth could come from a few sources. These might look like ANT price appreciation, a completely free and open source base layer supported by a commercial entity (think RedHat or Ubuntu), or another ANT token sale (diluting current ANT holders and/or the AA). Let’s explore the least controversial and most exciting of these, ANT price appreciation.
ANT price appreciation might arise due to demand for Aragon related services such as Aragon Network Votes, Aragon Court, or fees on the Aragon blockchain. This is a rather straight forward supply and demand equation. The more useful ANT is the more people will want ANT. The more people want to buy ANT and the less people want to sell NT the more buyers will have to pay for ANT. This equilibrium creates the market price for ANT.
Recently there have been many conversations on the creation of ANT derivative tokens. These look like:
All of these tokens are dependent on ANT. These tokens are effectively derivatives on ANT. This provides a considerable amount of freedom regarding token designs in the Aragon ecosystem. Derivative designers can then modify token dynamics to precisely incentivize the type participation desired. Like with any derivative, this can be done in a way that is decoupled from the performance of the underlying asset almost arbitrarily. These tokens will have increased utility in the small game context of their own token model.
In the larger game of Aragon, however, these token models will decrease the utility of ANT. This is because as value flows to derivative tokens it will flow away from the base layer token. As AVT captures value for voters it will take value away from ANJ court services. This creates a tug-of-war between ANT derivative tokens. If an Aragon community member holds ANT, they have to choose between participating in the court or participating in network governance. This does not compound the value of ANT, but dilutes it. ANT then becomes a gateway token on the way to the tokens that have real value. Like with derivatives, the value of the derivative can be decoupled from the underlying asset almost arbitrarily. At this point you might as well just replace ANT with ETH.
Ideally every Aragon service would synergistically add value to ANT in a way that is greater than the sum of it’s parts. ANT holders would be first class citizens able to participate in all Aragon related activities and services. This makes sense because the people who are using Aragon services would want to have a say in the governance of those services. Likewise, voters are going to make better decisions on network governance if they are also users of that network.
So with this in mind, I ask you: why so many ANT derivative tokens? I get that bonding curves are cool and we’re all really excited about Aragon fundraising, but let’s not act like men with hammers. Not everything needs it’s own token. In fact, the more utility a single token has the more likely it is to serve as a base layer for a system. Considering that Aragon has the potential to act as the substrate for human coordination on a global scale, this seems important.
Let’s support ANT and make it the base layer of Aragon. Let’s integrate ANT into the ecosystem and get it into the hands of our community. Let’s make ANT useful, and valuable, and desirable. This rewards community contributors not only with ANT price appreciation, but with ANT utility. If ANT is useful and valuable people will want to hold it. This will create an economic base layer for the Aragon digital jurisdiction.