The Economy of Aleph Zero (AZERO)

Karolina

22 Feb 2024
The Economy of Aleph Zero (AZERO)

The evolution of blockchain technology has brought forward numerous platforms aiming to solve various challenges in the digital world. Among these innovations, Aleph Zero stands out with its unique approach to creating an economically viable ecosystem through thoughtful tokenomics and incentives. This article delves into the economy of Aleph Zero, focusing on its native token, AZERO, to understand how it sustains growth, incentivizes participation, and ensures long-term viability.

MUST READ: "What is Aleph Zero"

Understanding AZERO Tokenomics

Key Metrics and Distribution

  • Ticker: AZERO
  • Type: Utility
  • Circulating Supply: 257,990,631
  • Total Supply: 354,678,137
  • % Staked: 71%
  • # of Wallets: 207,370
  • Inflation: 30,000,000 AZERO per year
  • Market Cap: $410,598,781
AZERO Basic metrics

Allocation and Use Cases

  • Aleph Zero Foundation. 23% of the tokens are allocated for research, development, marketing, operations, ecosystem incentives, and other expenses.
  • Team Allocation. 10% of the tokens, with 80% locked for one year and vested over four years.
  • Funding Rounds. Details on the pre-seed, seed, Early Community round, public presale, and public sale distributions.
  • AZERO Utility. The AZERO coin powers the Aleph Zero ecosystem by being used for validator node staking, DEX swap fees, collateral for wrapped assets in Liminal, fees for asset-wrapping and bridging on Liminal, network fees, and governance voting processes.
AZERO Allocation and Use Cases

The Role of Inflation in Aleph Zero's Ecosystem

Inflation is often viewed negatively in traditional economic contexts, associated with diminishing purchasing power and economic instability. However, in the realm of blockchain ecosystems like Aleph Zero, inflation serves as a pivotal mechanism for fostering sustainable growth, incentivizing network participation, and ensuring the long-term viability of the platform. This article explores the nuanced role of inflation within Aleph Zero's ecosystem, detailing its introduction, benefits, and governance.

Introduction of Inflation

Aleph Zero has introduced a systematic annual increase of 30 million AZERO tokens to its circulating supply, a decision rooted in the desire to sustain and nurture ecosystem growth. This inflationary mechanism is not merely a tool for increasing token supply but a strategic approach to enhancing the network's security, scalability, and development. By carefully calibrating the rate of inflation, Aleph Zero aims to balance the need for rewarding network participants with the imperative of maintaining the token's value over time.

Benefits of Inflation

The introduction of inflation within Aleph Zero's ecosystem serves multiple critical functions, each contributing to the platform's overarching goals:

  • Incentivizing Validators and Nominators. Validators and nominators play a crucial role in securing the Aleph Zero network through the proof-of-stake consensus mechanism. Inflation provides these participants with financial rewards for their efforts, encouraging continued engagement and investment in the network's health and security.
  • Funding Ecosystem Treasury. A portion of the newly minted AZERO tokens is allocated to the ecosystem treasury each year. These funds are instrumental in supporting ongoing development projects, marketing initiatives, operational expenses, and other activities that contribute to the ecosystem's growth and sustainability.
  • Supporting Long-Term Holding. By distributing inflation rewards primarily to those who stake their tokens, Aleph Zero encourages long-term holding over speculative trading. This strategy aims to reduce market volatility and foster a stable economic environment conducive to gradual growth.

Inflation Mechanism and Governance

Validators and Nominators

At the heart of Aleph Zero's security and efficiency are its validators and nominators, who ensure the integrity of transactions and the network at large. Inflation directly supports these roles by compensating participants for their staked tokens and the risks associated with securing the network. This compensation not only rewards current participants but also attracts new validators and nominators, enhancing the network's decentralization and resilience.

Ecosystem Treasury

The ecosystem treasury represents a vital component of Aleph Zero's inflation strategy, receiving a dedicated portion of the annual inflation to fund various initiatives. These initiatives range from research and development to community engagement programs, all aimed at bolstering the ecosystem's health and competitiveness. The treasury's role is pivotal in allocating resources efficiently to areas that promise the most significant impact on Aleph Zero's growth and user adoption.

Decentralized Governance

A key aspect of Aleph Zero's inflationary policy is its commitment to decentralized governance. The platform envisions a future where token holders can vote on critical decisions, including adjustments to the inflation rate. This participatory approach ensures that the inflation mechanism remains responsive to the ecosystem's evolving needs, balancing the interests of various stakeholders to support the platform's long-term success.

MUST READ: "Aleph Zero vs Solana"

Regulatory Compliance and Market Presence

  • FINMA No-Action Letter: Aleph Zero’s compliance with Swiss law and the implications for its operation and token issuance.
  • Market and Wallets: Insights into Aleph Zero’s market presence, including exchanges and wallet statistics.

Key Takeaways

AZERO Summary

Conclusion

The economy of Aleph Zero showcases a thoughtful approach to creating a sustainable and growing blockchain ecosystem. Through strategic token allocation Aleph Zero is poised to contribute significantly to the blockchain landscape. As the platform evolves, its economic strategies will likely serve as a benchmark for future blockchain projects.

If you are interested in utilizing Aleph Zero, Solana or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

FAQ

How is the AZERO token distribution structured?

  • The distribution is designed to support the ecosystem's growth, with allocations for stakeholders and strategic initiatives.

What role does inflation play in the Aleph Zero ecosystem?

  • Inflation is used strategically to incentivize network participation and ensure sustainability.

What is the utility of AZERO tokens within the Aleph Zero ecosystem?

  • AZERO tokens power the Aleph Zero ecosystem (validator node staking, DEX swap fees, collateral for wrapped assets in Liminal, fees for asset-wrapping and bridging on Liminal, network fees, and governance voting processes).

How does Aleph Zero handle inflation and its impact on the ecosystem?

  • Aleph Zero introduces a systematic annual increase of 30 million AZERO tokens to encourage ecosystem growth, incentivize participation, fund the ecosystem treasury, and support long-term holding by distributing inflation rewards mainly to stakers, aiming to balance growth with token value maintenance.

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AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!

The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Tomasz Dybowski

04 Mar 2025
The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Introduction

Web3 backend development is essential for building scalable, efficient and decentralized applications (dApps) on EVM-compatible blockchains like Ethereum, Polygon, and Base. A robust Web3 backend enables off-chain computations, efficient data management and better security, ensuring seamless interaction between smart contracts, databases and frontend applications.

Unlike traditional Web2 applications that rely entirely on centralized servers, Web3 applications aim to minimize reliance on centralized entities. However, full decentralization isn't always possible or practical, especially when it comes to high-performance requirements, user authentication or storing large datasets. A well-structured backend in Web3 ensures that these limitations are addressed, allowing for a seamless user experience while maintaining decentralization where it matters most.

Furthermore, dApps require efficient backend solutions to handle real-time data processing, reduce latency, and provide smooth user interactions. Without a well-integrated backend, users may experience delays in transactions, inconsistencies in data retrieval, and inefficiencies in accessing decentralized services. Consequently, Web3 backend development is a crucial component in ensuring a balance between decentralization, security, and functionality.

This article explores:

  • When and why Web3 dApps need a backend
  • Why not all applications should be fully on-chain
  • Architecture examples of hybrid dApps
  • A comparison between APIs and blockchain-based logic

This post kicks off a Web3 backend development series, where we focus on the technical aspects of implementing Web3 backend solutions for decentralized applications.

Why Do Some Web3 Projects Need a Backend?

Web3 applications seek to achieve decentralization, but real-world constraints often necessitate hybrid architectures that include both on-chain and off-chain components. While decentralized smart contracts provide trustless execution, they come with significant limitations, such as high gas fees, slow transaction finality, and the inability to store large amounts of data. A backend helps address these challenges by handling logic and data management more efficiently while still ensuring that core transactions remain secure and verifiable on-chain.

Moreover, Web3 applications must consider user experience. Fully decentralized applications often struggle with slow transaction speeds, which can negatively impact usability. A hybrid backend allows for pre-processing operations off-chain while committing final results to the blockchain. This ensures that users experience fast and responsive interactions without compromising security and transparency.

While decentralization is a core principle of blockchain technology, many dApps still rely on a Web2-style backend for practical reasons:

1. Performance & Scalability in Web3 Backend Development

  • Smart contracts are expensive to execute and require gas fees for every interaction.
  • Offloading non-essential computations to a backend reduces costs and improves performance.
  • Caching and load balancing mechanisms in traditional backends ensure smooth dApp performance and improve response times for dApp users.
  • Event-driven architectures using tools like Redis or Kafka can help manage asynchronous data processing efficiently.

2. Web3 APIs for Data Storage and Off-Chain Access

  • Storing large amounts of data on-chain is impractical due to high costs.
  • APIs allow dApps to store & fetch off-chain data (e.g. user profiles, transaction history).
  • Decentralized storage solutions like IPFS, Arweave and Filecoin can be used for storing immutable data (e.g. NFT metadata), but a Web2 backend helps with indexing and querying structured data efficiently.

3. Advanced Logic & Data Aggregation in Web3 Backend

  • Some dApps need complex business logic that is inefficient or impossible to implement in a smart contract.
  • Backend APIs allow for data aggregation from multiple sources, including oracles (e.g. Chainlink) and off-chain databases.
  • Middleware solutions like The Graph help in indexing blockchain data efficiently, reducing the need for on-chain computation.

4. User Authentication & Role Management in Web3 dApps

  • Many applications require user logins, permissions or KYC compliance.
  • Blockchain does not natively support session-based authentication, requiring a backend for handling this logic.
  • Tools like Firebase Auth, Auth0 or Web3Auth can be used to integrate seamless authentication for Web3 applications.

5. Cost Optimization with Web3 APIs

  • Every change in a smart contract requires a new audit, costing tens of thousands of dollars.
  • By handling logic off-chain where possible, projects can minimize expensive redeployments.
  • Using layer 2 solutions like Optimism, Arbitrum and zkSync can significantly reduce gas costs.

Web3 Backend Development: Tools and Technologies

A modern Web3 backend integrates multiple tools to handle smart contract interactions, data storage, and security. Understanding these tools is crucial to developing a scalable and efficient backend for dApps. Without the right stack, developers may face inefficiencies, security risks, and scaling challenges that limit the adoption of their Web3 applications.

Unlike traditional backend development, Web3 requires additional considerations, such as decentralized authentication, smart contract integration, and secure data management across both on-chain and off-chain environments.

Here’s an overview of the essential Web3 backend tech stack:

1. API Development for Web3 Backend Services

  • Node.js is the go-to backend runtime good for Web3 applications due to its asynchronous event-driven architecture.
  • NestJS is a framework built on top of Node.js, providing modular architecture and TypeScript support for structured backend development.

2. Smart Contract Interaction Libraries for Web3 Backend

  • Ethers.js and Web3.js are TypeScript/JavaScript libraries used for interacting with Ethereum-compatible blockchains.

3. Database Solutions for Web3 Backend

  • PostgreSQL: Structured database used for storing off-chain transactional data.
  • MongoDB: NoSQL database for flexible schema data storage.
  • Firebase: A set of tools used, among other things, for user authentication.
  • The Graph: Decentralized indexing protocol used to query blockchain data efficiently.

4. Cloud Services and Hosting for Web3 APIs

When It Doesn't Make Sense to Go Fully On-Chain

Decentralization is valuable, but it comes at a cost. Fully on-chain applications suffer from performance limitations, high costs and slow execution speeds. For many use cases, a hybrid Web3 architecture that utilizes a mix of blockchain-based and off-chain components provides a more scalable and cost-effective solution.

In some cases, forcing full decentralization is unnecessary and inefficient. A hybrid Web3 architecture balances decentralization and practicality by allowing non-essential logic and data storage to be handled off-chain while maintaining trustless and verifiable interactions on-chain.

The key challenge when designing a hybrid Web3 backend is ensuring that off-chain computations remain auditable and transparent. This can be achieved through cryptographic proofs, hash commitments and off-chain data attestations that anchor trust into the blockchain while improving efficiency.

For example, Optimistic Rollups and ZK-Rollups allow computations to happen off-chain while only submitting finalized data to Ethereum, reducing fees and increasing throughput. Similarly, state channels enable fast, low-cost transactions that only require occasional settlement on-chain.

A well-balanced Web3 backend architecture ensures that critical dApp functionalities remain decentralized while offloading resource-intensive tasks to off-chain systems. This makes applications cheaper, faster and more user-friendly while still adhering to blockchain's principles of transparency and security.

Example: NFT-based Game with Off-Chain Logic

Imagine a Web3 game where users buy, trade and battle NFT-based characters. While asset ownership should be on-chain, other elements like:

  • Game logic (e.g., matchmaking, leaderboard calculations)
  • User profiles & stats
  • Off-chain notifications

can be handled off-chain to improve speed and cost-effectiveness.

Architecture Diagram

Below is an example diagram showing how a hybrid Web3 application splits responsibilities between backend and blockchain components.

Hybrid Web3 Architecture

Comparing Web3 Backend APIs vs. Blockchain-Based Logic

FeatureWeb3 Backend (API)Blockchain (Smart Contracts)
Change ManagementCan be updated easilyEvery change requires a new contract deployment
CostTraditional hosting feesHigh gas fees + costly audits
Data StorageCan store large datasetsLimited and expensive storage
SecuritySecure but relies on centralized infrastructureFully decentralized & trustless
PerformanceFast response timesLimited by blockchain throughput

Reducing Web3 Costs with AI Smart Contract Audit

One of the biggest pain points in Web3 development is the cost of smart contract audits. Each change to the contract code requires a new audit, often costing tens of thousands of dollars.

To address this issue, Nextrope is developing an AI-powered smart contract auditing tool, which:

  • Reduces audit costs by automating code analysis.
  • Speeds up development cycles by catching vulnerabilities early.
  • Improves security by providing quick feedback.

This AI-powered solution will be a game-changer for the industry, making smart contract development more cost-effective and accessible.

Conclusion

Web3 backend development plays a crucial role in scalable and efficient dApps. While full decentralization is ideal in some cases, many projects benefit from a hybrid architecture, where off-chain components optimize performance, reduce costs and improve user experience.

In future posts in this Web3 backend series, we’ll explore specific implementation details, including:

  • How to design a Web3 API for dApps
  • Best practices for integrating backend services
  • Security challenges and solutions

Stay tuned for the next article in this series!