ALLO - The Capital Allocation Layer of the Tokenized Internet
A VC/DAO hybrid Studio for Bold Builders & Transformative Capital Allocation Mechanisms
1. Introduction: Why Allo.Capital Exists
What is Capital Allocation?
At its core, capital allocation is about cultivating regenerative flows of value, ensuring that commitments, resources, and services circulate to sustain the whole ecosystem. Imagine it as the mycorrhizal network beneath a thriving forest—where nutrients, water, and signals continuously move between fungi and plants, supporting the health of the entire system.
Traditional finance operates like rigid conduits, directing resources through banks, investors, and grants, often in ways that extract more than they replenish. In contrast, grassroots economies are living systems—built on mutual commitments, shared stewardship, and decentralized resource pooling. Instead of mere allocation, they emphasize continuous reciprocity, where commitments are seeded, nurtured, and exchanged over time, allowing communities to co-create abundance.
As assets become digitally expressed (“tokenized”), we have the opportunity not just to move money differently, but to reimagine economies as ecosystems of trust, where value circulates like nutrients in a thriving landscape, ensuring that no one is left in scarcity and that the collective well-being flourishes.
The Problem
Today’s funding models are plagued by several challenges:
- Inefficient Allocation: Capital flows toward short-term speculation rather than long-term value creation. Good projects often can’t get funding while money sits in speculative investments.
- Lack of Transparency: Funding decisions remain opaque, controlled by centralized entities. Communities can’t see how their money is being used.
- Limited Access: High-quality builders face significant barriers in accessing capital, often based on who they know rather than what they’re building.
- Misaligned Incentives: Short-term profit maximization undermines long-term sustainability. Success metrics focus on wrong outcomes.
Our Vision and Mission
Vision:
Allo.Capital is dedicated to building the capital allocation layer of the tokenized internet.
By integrating a hybrid DAO + venture studio model with minimally structured DAO governance, and innovative tokenomics, we aim to optimize on-chain & off-chain funding to be faster, smarter, and self-sustaining.
Mission:
Decentralize Capital Allocation – Enable community-driven funding for builders looking to solve for the inequity/diversity and innovation in current funding mechanisms to enable organizations to expand their funding models.
Innovate in Funding Mechanisms – Explore the frontier of capital allocation mechanisms - create products and research that promote this and get funded
Sustain a Self-Funding Treasury – Utilize Revnet fees, token swaps, and protocol revenue streams.
Establish Thought Leadership – Drive new models of capital allocation & DAO governance innovation.
Key Innovations
Dual-Layer Capital Model: DAO Treasury for early-stage funding, Professional Fund for scaling growth-stage investments.
Minimal Viable Governance (MVG): Strategic time-boxed decision-making to prevent governance bloat.
Dual Obscured Token System: $ALLO = Governance | $rALLO = Revenue-backed token.
2. DAO Structure: The VC Studio(ish) Model
Overview
Allo.Capital’s structure is built on a dual model:
- DAO Treasury: Provides early-stage funding for projects, research, and contributor rewards.
- Professional Venture Fund: Managed independently to invest in mid-stage, high-growth projects while returning profits to the DAO treasury.
Key Components
- Dual-Layer Capital Model:
- DAO Treasury: Funds early-stage, high-risk projects with token swaps, protocol fees, and Revnet revenue.
- Professional Fund: Invests in growth-stage projects using traditional venture capital mechanisms, ensuring regulatory clarity and operational efficiency.
- Minimal Viable Governance (MVG):
Governance is designed to be lightweight, with time-boxed decision-making that prevents governance bloat and focuses on strategic oversight rather than day-to-day operations. - Token System:
- $ALLO: Primarily a governance token.
- $rALLO: A revenue-backed token issued via Revnet, convertible into $ALLO, ensuring sustainable yield and value capture.
Operational Flow
- Early-Stage Projects: Community-led proposals receive initial funding from the DAO Treasury.
- Growth-Stage Investments: A separate professional team (via the Allo VC Fund) invests in validated projects, with a portion of the gains flowing back into the DAO treasury.
| Funding Type | Managed By | Purpose | Revenue Source |
| DAO Treasury | Allo.Capital DAO | Incubation, Research, Contributor Rewards | Token swaps, Protocol Fees, Revnet Revenue |
| External Fund | Professional Fund Managers | Growth-Stage Investments | LP Contributions, Carry Fees |
Key Decision: The DAO does NOT govern the professional investment fund. Instead, the VC fund operates independently, ensuring regulatory clarity while maintaining alignment via carry-sharing and token incentives.
3. Governance & Operations
DAO Responsibilities
- Treasury and Incubation Strategy:
- Overseeing early-stage capital allocation experiments.
- Funding research, community engagement, and innovative funding models.
- Community Engagement:
- Managing decentralized deal flow and contributor onboarding.
- Leveraging community intelligence through Allo Scouts and Research Guilds.
The DAO governs the treasury and incubation strategies, while the venture fund is managed professionally. Governance is scoped to strategic decisions, not micromanagement.
DAO handles:
- Research, incubation, and early-stage capital allocation experiments.
- Community engagement, deal flow sourcing, and category leadership.
- Revenue-sharing, staking(?), and Revnet-powered funding models.
Professional Fund handles:
- Traditional high-ticket venture investments.
- Scaling high-impact projects.
- Finding high-value opportunities.
Governance Model:
- $ALLO holders govern major treasury decisions (not day-to-day ops).
- DAO leadership stewards execution (avoiding community-driven hiring mistakes).
- Time boxed evaluation cycles kill/continue projects based on traction.
** Internal Team (Currently Owocki & Rena):**
- Treasury oversight & sustainability.
- Core Team Hiring (if any)
Key Decision:
Governance is scoped to strategic funding decisions and accountability, not micromanagement.
4. The Funding Lifecycle & Ecosystem Structure
The Fountain (Community OS)
- The foundation of the DAO, containing governance tools, onboarding, and incentives.
- Ensures minimal viable governance (MVG) to enable faster execution.
- Houses contributor onboarding, research hubs, and decentralized deal flow.
Key Functions:
- Contributor Onboarding → Ensuring smooth entry into the DAO with clear pathways to participation.
- Minimal Viable Governance (MVG) → Prioritizing speed and autonomy over bureaucracy.
- Community Rituals & Recognition → Maintaining culture, lore, and long-term engagement.
- Allo Scouts & Research Guilds → Facilitating decentralized deal flow and community intelligence gathering.
Key Decision:The Fountain should NOT be overcomplicated—governance is only applied when needed to keep things moving. Each research area is built around the needs of its constituents, balancing efficiency, risk mitigation, and experimentation.
Research & Intelligence Pillar (Defining the Future)
- Funds category creation, research reports, and experimental funding mechanisms.
- Supports swarms & pods (AI research, capital allocation theory, novel incentive structures).
- Bridges academic research with practical implementation in capital allocation.
Software & Product Pillar (Building Infrastructure)
- Develops protocol(s), tooling, and smart contract infrastructure.
- Converts research insights into funding infrastructure for builders.
- Ensures DAO-backed projects integrate seamlessly with external funders.
Key Decision:Each research area is built around the needs of its constituents, balancing efficiency, risk mitigation, and experimentation.
Project Funding Lifecycle
| Stage | Funding Source | Description | Output |
| Early-Stage Builds | DAO Treasury | DAO funds new builders & research prototypes | Concepts, MVPs |
| Partner Builds | DAO Treasury + External BD Intake | External partnerships develop Web2/Web3 integrations | Pilots, Commercial Integrations |
| Mid-Stage Growth | Allo VC Fund | GPs invest in validated projects moving to market | Scaling Solutions |
| Ecosystem Maturity | Revenue-Generating | Revnet & token swaps feed back into DAO | Self-Sustaining Treasury |
Key Decision(s):
- The VC fund does not guarantee investment in DAO projects—it invests independently while remaining accountable to the community through carry-sharing.
- The DAO must define funding limits for early-stage builds to prevent overcommitment to projects without clear paths to traction.
How Funding, Equity, and Tokens Flow
* **Community-Led Projects:**
1. Proposals are funded by the DAO Treasury and progress through defined milestones (MVP → pilot → adoption).
1. Contributors propose experiments or early-stage projects.
2. DAO provides initial funding via Treasury.
3. Projects progress through MVP, pilot, and adoption phases.
* **Mid-Stage Scaling:**
2. Independent decisions by GPs in the Allo VC Fund, with a portion of carry fees reinvested into the DAO.
4. GPs decide independently on investments—there is no auto-transition from the DAO.
5. A portion of carry fees (profits) from successful investments flow back into the DAO.
* **Sustainability Through Token Swaps & Revenue:**
3. Upon successful incubation, projects swap a percentage of tokens (typically 5-10%) with the DAO.
4. Revnet-powered models generate recurring fee-based revenue that supports ongoing treasury growth.
6. Projects that exit incubation swap a percentage of tokens with the DAO.
7. Successful Revnet-powered models generate fee-based revenue.
8. These flows ensure long-term sustainability without relying solely on inflationary tokenomics.
| Funding Stage | Source | Token Swap Terms | Flowback to DAO? |
| Early-Stage Builds | DAO Treasury | 5% - 10% of project tokens | Yes (held in treasury) |
| Mid-Stage Growth | Allo VC Fund | VC deal terms (negotiated by GPs) | No direct guarantee |
| Mature Projects | Self-Sustaining | Revnet Fee Capture & Revenue Share | Yes (fee-based) |
Key Decision: DAO funding does not guarantee VC investment
5. Tokenomics & Financial Sustainability
TL;DR:
$ALLO = Serves as the governance token, facilitating decision-making and staking(?) incentives within the ecosystem.
$rALLO = A revenue-backed token issued only when capital enters the system, ensuring that new token creation is directly tied to real revenue flows.
Revenue Streams & Treasury Flow (Fake modelling)
| Revenue Source | Projected Contribution (Year 1-3) |
| Revnet Fees (1-2.5%) | $2M - $10M |
| DAO Treasury Yield | $500K - $2M |
| Token Swaps from Incubated Projects | $3M - $15M |
| Institutional LP Contributions | $5M - $50M |
| Total Estimated Revenue | $10M - $75M |
Key Decision: The DAO treasury must balance early-stage funding allocations with long-term revenue sustainability.
Revnet Issuance & Sustainability
Initial Seeding → $10M in the Revnet from the DAO Treasury.
Issuance Process → Each capital inflow mints a proportional amount of $rALLO based on the net revenue generated.
Conversion Window → $rALLO redeems into $ALLO over 6-12 months.
Revnet Fee Capture → Every redemption incurs a 1% - 2.5% fee, which funds the DAO.
Key Decision: The DAO must decide how aggressively to seed the Revnet without risking treasury depletion.
Revnet Issuance Model
- Capital Inflow:
- New capital through grants, investments, or token swaps triggers the issuance of $rALLO.
- Issuance and staking(?):
- The system mints $rALLO proportional to the net revenue generated.
- Holders may stake $rALLO to earn yield from treasury revenues or convert it into $ALLO by paying a conversion fee (typically 3%-5%).
- Treasury Sustainability:
- Conversion fees, along with protocol fees, are reinvested into the treasury.
- This ensures that the treasury grows in tandem with network activity and capital flows.
Key Insights
- Anti-Inflationary Measures:
- Revnet ensures that $rALLO is issued only when revenue exists, preventing unnecessary inflation.
- Sustainable Yield:
- Staking(?) rewards derive from real capital inflows—not from additional token emissions—ensuring long-term value for participants.
- Dynamic Adjustments:
- The DAO retains the ability to adjust staking(?) yields and conversion rates in response to capital flow changes.
The Role of Revnets in Allo.Capital
Revnets allow Allo to:
Align token supply with actual capital movement.
Ensure the treasury doesn’t deplete due to inflationary emissions.
Make staking(?) rewards sustainable by using protocol revenue instead of new issuance.
Introduce self-balancing treasury mechanics through conversion fees.
How $rALLO Issuance Works in the Revnet Model
Unlike traditional token models, $rALLO is only created when new capital flows into Allo’s funding infrastructure.
Step-by-Step Issuance Process:
Capital Enters the System
- Users allocate capital through Allo’s funding rails (grants, investments, token swaps).
- Examples: A grant round moves $500K through Allo’s infrastructure, triggering Revnet-based issuance.
Revnet Issues $rALLO Based on Revenue
- The system mints $rALLO equal to the net revenue generated from transaction fees.
- Example: If a funding round generates $10K in fees, then $10K in $rALLO is issued.
Users Choose to Stake or Convert
- Staking(?): Locking $rALLO generates yield from treasury revenues.
- Conversion: Users swap $rALLO for $ALLO, paying a 3%-5% fee (which funds treasury).
Treasury Fees Recycle Capital
- Conversion fees + staking(?) returns are reinvested into the treasury, funding new builder incentives.
Technical Considerations for Revnet Implementation
Smart Contract Considerations:
- Automated Issuance Logic
- $rALLO is minted only when revenue hits treasury smart contracts.
- Contracts verify fee collection before issuing new tokens.
- Conversion Limits to Prevent Market Disruptions
- Daily or weekly conversion limits to prevent mass liquidations.
- Vesting schedules for large conversions to control flow.
- Security & Risk Mitigation
- Multi-sig control over treasury contract upgrades.
- Bug bounties & smart contract audits before public deployment.
Ensures Revnet issuance is mathematically sound and secure.
Reduces risks of sudden token overflows or liquidation cascades.
6. Treasury Flow Model: Financial Breakdown
Year 1 Model (Based on $1M Capital Flow)
| Revenue Source | Projected Annual Flow | $rALLO Issued | Conversion Fees (3%) | Treasury Growth |
| Protocol Fees (0.5%) | $5,000 | $X | $X | $X |
| Revnet Fees (2%) | $20,000 | $X | $X | $X |
| Token Swaps (5-10%) | $50,000 - $100,000 |
Key Insights:
Revnets prevent unnecessary inflation by only issuing $rALLO when revenue exists.
Treasury sustains itself through conversion fees + protocol fees.
Token swaps create long-term value exposure for the DAO.
Conversion Fees & Treasury Sustainability
Conversion fees ensure $rALLO is not dumped all at once while creating a sustainable treasury income source.
Conversion Fee Model
- Base Conversion Fee: 3% on $rALLO → $ALLO swaps.
- High-Volume Conversion Fees: 5% for large swaps to prevent sell-offs.
- Staking(?) Hold Bonus: Lower fees for users who stake before converting.
Prevents token flipping while funding the DAO.
Encourages staking(?)-first behavior for better ecosystem participation.
Treasury Growth Projections & Long-Term Strategy
Scaling Beyond Year 1
| Year | Capital Flow Estimate | Protocol Fees (0.5%) | Revnet Fees (2%) | Treasury Growth |
| Year 1 | $1M | $5,000 | $20,000 | $125,000 |
| Year 2 | $5M | $25,000 | $100,000 | $500,000 |
| Year 3 | $10M+ | $50,000+ | $200,000+ | $1M+ |
As capital flow scales, treasury growth becomes self-sustaining.
DAO governance will adjust staking(?) yields & conversion rates as needed.
Takeaways
Revnets prevent inflation while ensuring capital alignment.
$rALLO issuance is tied to real revenue, NOT speculation.
Treasury grows through a combination of Revnet fees, protocol fees, and token swaps.
Staking(?) and conversion mechanisms create a balanced long-term incentive model.
7. Staking & Proof of Flow
TL;DR:
Proof of Flow: A staking-based funding model where token holders signal funding priorities.
Staking Rewards: Fee-sharing from Revnet & additional $ALLO issuance.
Prevents short-term dumping while rewarding active governance.
| Staker Type | Rewards | Time-Locked? |
| Core Contributors | staking(?) yield + bonus incentives | Yes (vesting) |
| Builders (Funded) | Fee-sharing via $rALLO and direct funding | No |
| Community Stakers | Revenue-based rewards | Yes |
Key Decision: Staking rewards must be aligned with governance incentives, ensuring participation without excessive dilution.
8. Category Leadership & Competitive Advantage
Allo.Capital is creating the category of onchain capital allocation. This section outlines our path to category creation and sustainable competitive advantages.
Step 1: Define the Category—Position capital allocation as a core infrastructure layer of Web3.
Step 2: Own the Narrative—Build research, reports, and media to establish thought leadership.
Step 3: Deliver Excellence—Fund and incubate the best builders in capital allocation.
Step 4: Build the Ecosystem—Grow network effects through incentives, staking(?), and partnerships.
Network Effects
- Each additional builder strengthens the infrastructure
- Growing protocol fees strengthen treasury sustainability
- Cross-pollination of ideas between builders
- Compounding value capture through token mechanics
Competitive Moats
- Technical Moats
- Novel funding mechanisms and primitives
- Data-driven capital allocation optimization
- First-mover advantage in key integrations
- Battle-tested smart contract infrastructure
- Economic Moats
- Fee capture from all capital flows
- Sustainable token model with real revenue backing
- Clear incentive alignment across stakeholders
- Growing treasury providing strategic capital
- Network Moats
- Strong builder ecosystem creating composability
- Deep partnerships driving network effects
- Active research community expanding possibilities
- Engaged token holders aligned with long-term growth
Key Outcome: By 2028, Allo.Capital targets becoming the dominant infrastructure layer for onchain capital allocation, defined by:
- $100M+ in annual capital flow
- 20-25x revenue multiple justifying token valuation
- Network of 50+ active builders
- Sustainable fee generation supporting treasury growth
9. Quality Control: Raising the Caliber of Builders
Ensuring that only the highest-caliber builders progress through our funding stages is critical to Allo.Capital’s success. To achieve this, we implement a rigorous, multi-stage evaluation framework and combine professional oversight with selective community engagement. Our approach borrows key learnings from Orange DAO and integrates best practices in operational governance and risk management.
Builder Evaluation Framework
We define clear progression stages for every builder, with specific expectations and evaluation criteria at each phase and how much funding should be allotted:
| Stage | Expectation | Focus & Objectives | Duration | Requirements | Success |
| Hallucination | Idea stage | Idea Generation: Validate the problem and spark early research. | 1-3 Weeks |
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| Hypothesis | Early concept | Conceptual Clarity: Develop a coherent hypothesis and outline potential solutions. | 1 Month |
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| Prototype | Proof of Concept | Proof of Concept: Build an early tangible prototype to test your idea. | 1-3 months |
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| MVP | Functional product | Market-Ready Prototype: Develop a minimally viable product with real-world validation. | 3 Months |
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| Pilot | Early traction | Early Traction: Scale the MVP to achieve initial market traction and ecosystem fit. | 6 Months |
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| Scale | Product-market fit | Product-Market Fit: Expand operations and solidify sustainable revenue generation. | Ongoing |
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*Note: These durations and funding amounts are indicative. Final amounts and timelines will be determined by the DAO’s governance process, in consultation with further advisory. *
Key Decision:
- Quarterly airdrops to top builders to systematically mine the design space.
- Enhanced emissions & staking(?) incentives for high-impact projects.
- Only top-tier contributors progress through funding stages.
10. Builder & Researcher Workflows
Builder Workflow
Awareness → Engages via social media, community forums, industry events.
Exploration → Reads Allo’s docs, past projects, and success stories.
Engagement → Joins Allo community, workshops, and hackathons.
Application → Submits proposals with minimal bureaucracy.
Onboarding → Accepted builders get resources, mentorship, and funding.
Development → Uses Allo tools, mentorship, and community support.
Launch/Growth → Gains Allo-backed distribution & additional funding.
Advocacy → Successful builders mentor others, growing the network effect.
Why? Avoids governance bloat, focusing on high-quality talent acceleration.
Researcher Workflow (Future)
Awareness → Encounters Allo’s research initiatives, Summoning Ceremony, DAO Design Competition.
Exploration → Reads Allo’s research portal, studies mechanisms.
Engagement → Joins research discussions, interacts with DAO members.
Proposal Submission → Submits research topic via structured proposal process.
Evaluation & Funding → If accepted, receives milestone-based funding payouts.
Integration & Implementation → Works with the Allo team to incorporate findings.
Publication & Advocacy → Shares research publicly or via DAO-backed media.
Mentorship & Future Contributions → Engages long-term via advisory roles or Intelligence Pillar leadership.
Why? Makes Allo the intellectual hub for capital allocation, systematically funding what matters.
No open research grants at inception – all research is internal & strategically aligned.