ARR Burn Curve

Mechanism to fairly price licenses

The spirit of the Open Token License model is not to unfairly burden enterprises wanting to innovate on top of our source code. Thus we graduate token license costs to ensure license never rises above a manageable % of enterprise ARR (annual recurring revenue).

Calculating Burn Amount

The RAIR Association calculates the cost in RAIR tokens as follows:

  1. Determine the average weekly average trading price for RAIR tokens on relevant DEX and CEXs using a trusted pricing oracle.

  2. Ingest self reported enterprise ARR into the token bonding curve. Diligence will be done to ensure this is an fair representation of actual ARR to the best of our abilities.

  3. Determine the appropriate number of RAIR tokens required to generate a valid license and update NFT creation smart contract to accept values >= that number.

for onchain entities wanting to license RAIR. ARR calculations can be more easily performed by looking directly at onchain activities.

annual is flexible. anytime within a corporate calendar year. E.G. Startup grows enough revenue to qualify for SME tier in month 11. Perpetual license will be generated from that date through to the end of the following 365 days. ARR value will be taken from the average monthly revenue over a 12 month period to smooth data.

Token Curve

To not unfairly burden enterprises near each step function tier, we use the following function to generate a smooth pricing curve by increasing ARR share slightly as enterprise value grows.

TierARR StartARR End% Arr

startup

$0

$2,000,000

0.00%

SME

$2,000,000

$10,000,000

0.10%

Corporate

$10,000,000

$100,000,000

0.125%

Public*

$100,000,000

--

*%

Vendor**

**%

Example Token License Cost

  • Example 1: Startup -> SME. 3m ARR. RAIR token price .03. (3,000,000 x .1% / .03) = ~3000 USD license or ~100k RAIR tokens to burn.

  • Example 1: SME -> CORPORATE. 3m ARR -> 70m ARR. RAIR token price .08. (70,000,000 x .125% / .08) = ~87500 USD license or ~1.1m RAIR tokens to burn.

Public*

The one size fits all ARR model begins to break down at scale. E.g. will Microsoft really spend .1% of their 300B in ARR to acquire a license. Given such, association to determine which business subunit is utilizing the source code and apply a sufficient RAIR token exchange rate for acquiring a valid license.

Vendors**

Similar logic applies to Vendors RAIR has integrated with. There is a direct benefit to being installed out of the box as a RAIR integration. As such vendor licenses are also open to more complex contractual agreement with the assocation that a standard fixed % of ARR model.

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