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evanorti authored Feb 13, 2024
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## NFT economics

The same smart contract that mints the AllianceDAO NFTs will also mint an asset called “Ally” (`factory/terra1phr9fngjv7a8an4dhmhd0u0f98wazxfnzccqtyheq4zqrrp4fpuqw3apw9/AllianceNFT`) This asset will be solely owned by the contract, and will never be transferred to anyone outside of the contract. To leverage the power of Alliance, the “Ally” token will be whitelisted as an Alliance asset on Terra via a governance proposal, enabling the token to earn a portion of LUNA staking rewards. The proposed Reward Weight for “Ally” will be .003 — or .3% of total LUNA staking rewards — and the Take Rate will be 0. Upon the proposal’s passing, the AllianceDAO contract will stake Ally to start earning LUNA rewards. The delegation of the asset will be controlled by AllianceDAO governance and can be changed at any time. Staking rewards will be collected periodically using Warp Protocol and stored in the AllianceDAO contract.
The same smart contract that mints the AllianceDAO NFTs will also mint an asset called “Ally” (`factory/terra1phr9fngjv7a8an4dhmhd0u0f98wazxfnzccqtyheq4zqrrp4fpuqw3apw9/AllianceNFT`) This asset will be solely owned by the contract, and will never be transferred to anyone outside of the contract. To leverage the power of Alliance, the “Ally” token will be whitelisted as an Alliance asset on Terra via a governance proposal, enabling the token to earn a portion of LUNA staking rewards. Upon the proposal’s passing, the AllianceDAO contract will stake Ally to start earning LUNA rewards. The delegation of the asset will be controlled by AllianceDAO governance and can be changed at any time. Staking rewards will be collected periodically using Warp Protocol and stored in the AllianceDAO contract.

After the contract collects the staking rewards, each NFT will accrue rewards at an equal rate. At any point, NFT holders can connect their Station wallet to the AllianceDAO NFT website and “break” their NFT to claim their LUNA rewards. Importantly, NFT rewards can only be claimed once per NFT. Once an NFT has been broken, no more Alliance staking rewards will accrue to it. Although broken NFTs no longer accrue Alliance staking rewards, they can still be staked to the DAO on Enterprise to participate in governance.

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