There have been hundreds of messages discussing what’s important about how and when NAM tokens are distributed, especially following the Anoma Foundation’s proposal. While we’re not suggesting material changes to the proposal balances or supporting alternative suggestions that have been made, I hope that some of what I’m writing will alleviate community concerns enough to proceed to Pre-Genesis Stage 2 of the mainnet launch.
Concerns
People have raised several concerns:
- Anoma / Namada alignment and priorities
- Token circulation versus liquidity planning uncertainties
- The Namada community’s role in pre-launch proposals
Context
There’s been some confusion around what amount of the allocation is going to “the community” (Namada Community Genesis Process, Cryptoeconomic Mechanisms, and the Genesis Allocations | Blog - Namada). This is how I see the breakdown:
- ‘Crypto community’ focused allocations: ~16.1% (5.104% RPGF Program + 1% Community Builders Program + 6.5% airdrop + 3.5% incentivized testnet)
- ‘Core contributor’ focused allocations: ~18.8% (includes Heliax employees; 0.228% of this allocated by Knowable & Luminara to individuals)
- Anoma backer focused allocation: ~32%
- Core team allocations: 17% (7.5% Heliax + 7.5% Anoma Foundation + 2% Knowable)
- Grants program focused allocations: ~16% (5% for core dev via Anoma Foundation + 5.527% grants program via Anoma Foundation + 5.527% grants program via Luminara)
I think it’s challenging to identify what percentage is proposed to be allocated to the community.
Is someone who staked ATOM a member of the Namada community? Or someone who realized the incentivized testnet opportunity? What about someone who contributed resources, like a backer; or an employee building Namada’s MASP, who opted for a token allocation? It’s still difficult to say what makes someone a member of the Namada community or not, mostly because our norms aren’t formed yet and folks are still deciding if “Namada community member” is how they self-identify. I see each allocation category as being designed to help attract and retain potential community members, like those who were attracted to working in the Anoma ecosystem at an early stage, those who bet on Anoma, those who bet on the incentivized testnet, those who bet on ATOM by holding and staking it, and those like Heliax and Knowable who bet on focusing 2+ years of time and attention on getting Namada ready to launch.
While we had some incredible engagement and dedication to discussing the Anoma Foundation’s proposal, as well as some well considered and articulated suggestions, one learning we’ve had is that without established norms, our newly-forming community hasn’t yet developed to support a social consensus process. Another learning is to ensure we better clarify assumptions across core teams. In the case of the Anoma Foundation’s proposal, we now understand that the intention is to propose balances for us, as a community forming and/or supporting a new set of validators, to decide whether or not we would like to launch Namada using this set of genesis files (Genesis balance files) using the latest Namada software release (Releases · anoma/namada · GitHub).
To be clear, the decision to launch or not with this set of genesis files is what is being proposed, and we (Knowable) are in support of doing so.
Tl;dr
We’re not asking for material changes the balances that the Anoma Foundation has proposed, but we think these efforts will help to address some of the concerns raised in community discussions:
- There must be strong markets and ample liquidity to support an unlocked token supply; we are reasonably confident that we’ll have the market support needed for Namada’s economy to flourish
- Anoma Foundation & Luminara should begin establishing guiding principles so that our community begins to have a sense for how and when ~23.5% of the NAM will enter circulation
- Knowable will support the creation and discussion of an Anoma proposal to allocate XAN to active allocation recipients–past, present, and future–such as:
- core contributors, community builders, Shielded Expedition and post-SE
Knowable is ready to proceed with the next stage of our Namada mainnet launch plan ([Proposal] Mainnet 🚀 plan), and we welcome other prospective Namada validators to join the effort.
To Lock or Not to Lock
Common practice is to lock most of the supply, and to leave airdrops and perhaps incentivized testnet rewards unlocked. On the surface this appears fair, and the thing that likely excites these recipients is that restricting the sell side is known to create a buy-side pressure cooker, which drives up early token prices. Soon after launch, as speculators bet on how high the price will go (while scrambling to stake unlocked tokens for outsized staking rewards), airdrop recipients get an early exit opportunity. What tends to go unseen is that backers, team, and insiders then stake their locked tokens and exit with outsized staking rewards. What typically follows is a price bleed-out over the following months as everyone exits. We think that this kind of game is destructive to fledgling community economies, and as long-term Namada community members, it’s not what we want for our community.
As long-term Namada community members, it is understandable to be concerned about how inadequate liquidity could affect the Namada economy. Staking NAM is essential to provide guarantees that Namada’s transactions will be secure, and those guarantees are only as strong as NAM is desirable–with liquidity to meet that desire. Markets are not the Anoma Foundation or Knowable’s role, but this does not mean that liquidity planning has been ignored over the past 9 months. In addition, there are capable teams further joining these efforts, and we’re looking forward to introducing one of these teams within the next few weeks (likely sooner). Nothing is final yet, and the topic is sensitive: it takes time to get to proper arrangements made before announcements can happen. However, we know that everyone involved understands just how critical liquidity planning is for Namada’s success.
To be clear, we are content to support leaving the entire genesis supply unlocked, and reasonably confident that we’ll have the market support needed for Namada’s economy to flourish. An unlocked supply should force market participants to reveal their preferences immediately, which is critical for the next wave of potential NAM holders to decide whether or not it’s a worthwhile opportunity. Knowable’s role is to attract talent to join Namada’s mission with years-long time horizons. Our bet is that most of our strongest contributors have yet to join our mission, and a fair FDV is an opportunity for the kind of discerning participants we want to join us on this mission.
Accountability
Supporting a total unlock isn’t saying that there shouldn’t be responsibility. The Anoma Foundation (18.027%) and Luminara (5.527%), combined, are proposed to be responsible for nearly a quarter of the NAM genesis supply (23.554%). The Anoma Foundation and Luminara do intend to launch delegation programs, but beyond this, it will be important to understand guiding principles for how they intend to operate, such as token-use and controls. By signalling guiding principles, those responsible can begin to stake their reputation, which can help to set expectations for when and how these tokens will be used, and when and how these NAM may come into circulation.
Anoma alignment
As the first Anoma ecosystem project to market, we think Namada’s success will be an important signal of the future success of the Anoma ecosystem. The resources from Anoma backers were used to create Namada over the past 2+ years, so we think that it’s fair to allocate backers a pro-rata NAM position. Assuming markets are sufficiently developed, a full unlock enables those disinterested in Namada to exit as soon as possible–an opportunity for new, more aligned backers to take their place. If Namada does not succeed, this will reflect poorly upon Anoma, which would be bad for the Anoma backers. And unlocks will likely be for more than Namada–founders have signalled that Anoma should also forego any locks: Namada Community Genesis Process, Cryptoeconomic Mechanisms, and the Genesis Allocations – discussions - #16 by cwgoes
It’s in the interest of Namada to benefit from alignment with such a strong set of backers, and to develop our norms and our relationships with each of them so that those who are mission-aligned consider themselves part of our community. We’re beginning to engage Anoma backers and core contributors to help activate them with dedicated support for pre-genesis validator creation and delegation.
Reciprocity
We also believe that there should be experiments to encourage converging alignment between Anoma and Namada. When Anoma is closer to launch and preparing allocations, Knowable will help to lobby for a proposal that includes a percentage of the Anoma token supply being allocated to active Namada contributors–past, present, and future–the core contributors, community builders, and participants in initiatives like the Shielded Expedition testnet, for example.
Our active participants invest their time, attention, resources and abilities. While they are not directly supporting Anoma in the way that Anoma backers directly supported the team that built Namada, we think that reciprocity with Anoma exposure could help to support alignment that would benefit both of these project communities as they are central to the Anoma ecosystem.
Call to Action 
We’re just beginning to form our norms–particularly in our community Discord. It’s going to be very important to invest in developing these more intentionally. We’ll need your help to realize the benefits of our bet: the Anoma Foundation has attracted lots of people with these proposed token allocations, and we want to retain the best people: the kinds of people that share our vision and mission of open peer-to-peer digital payments networks that afford the freedom of disclosure. Folks are still deciding if they identify as part of our community. Let’s make all elements of Namada’s community the vibe we all want to be part of 
And let’s proceed with the mainnet launch by moving forward to Pre-Genesis Stage 2 of our mainnet launch plan: [Proposal] Mainnet 🚀 plan
It’s time. Let’s launch Namada together 
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