What is Ator Protocol? (Overview, Consensus, ATOR Tokenomics)

Ator Protocol, also known by the market ticker ATOR, is a way to reward users for hosting the Tor network.

Ator is a way to encourage the adoption and hosting of the Tor network, which also further decentralizes and secures the Tor network.

Presently, users host the Tor network for free.
However, Ator looks to create and distribute specialized relay nodes.

These nodes payout ATOR tokens to the users but also contain all that is required to run a Tor network node.

But, is this just some name recognition, or does this project have some weight?

Today we find out!

Ator was founded in 2022, with its technical whitepaper going live on GitHub in early 2023. The project is still in development, with completion of the roadmap scheduled for some time after the first quarter or 2024.

The ATOR token itself is an ERC-20 token, released on the Ethereum network. Though, what makes Ator really special is its ATOR Relay.

The low-power, autonomous computing device is built to run as a node for Tor, and potentially several other distributed privacy protocols too.

While a network relay, including one for running the Tor network, can be done on a personal computer, it is not efficient at doing so.

The Ator device has been created as a high-efficiency, low-powered, non-technical option for those who want to host the Tor network and be rewarded for it.

Perhaps unsurprisingly for a cryptocurrency that is attached to the Tor network, not much is known about the founders.

With that in mind, Tor is probably a good place to start when talking about ATOR.

The Onion Router, more commonly known as Tor, is a web browser, similar to Google Chrome or Firefox, that utilizes verifiably open-source technology, along with some clever software tricks, to protect your anonymity while using the web.

Although Tor has received unjust negative press in recent years, it is worth remembering that Tor provides a much-needed service that helps protect our democracies as it provides a safe route for journalists and whistleblowers to disrupt information while protecting their identity.

So, while the media may associate Tor with criminal activity, it is worth remembering Tor was actually developed and released to the public by the US Navy.

But, now we know what Tor is, so what exactly is Ator?

Ator is essentially a project that aims to distribute its Tor relay nodes. These are small router-like devices that are specifically designed to host the Tor network in an energy-efficient and user-friendly manner.

Currently, setting up a Tor node requires some technical know-how, however Ator wants to make their nodes the crypto equivalent of plug-and-play.

Ator sees itself as a way to incentivize the adoption of the Tor network by rewarding users with ATOR tokens for hosting the servers for Tor’s millions of daily users.

But how does Ator work exactly?

Unlike most other networks, with Ator Protocol, you are rewarded ATOR tokens for successfully hosting and encrypting data for the Tor network.

To achieve this, Ator runs two mechanisms.

First, ATOR is an ERC-20 token, so this means it runs on the Ethereum network and uses a Proof-of-Stake based consensus mechanism.

To quickly recap, Proof-of-Stake is an alternative to Proof-of-Work and confirms its network’s transactions by selecting a validator to confirm the transactions, rather than make the entire network compete to solve a puzzle first, like with Bitcoin’s Proof-of-Work.

The benefits are it uses much less energy and can scale more efficiently than Proof-of-Work based networks.

On the other hand, an ERC-20 token is a token creation blueprint that ensures a token will be compatible with the Ethereum network.

Now that we know the first out of two mechanisms that Ator Protocol runs on, let’s explore the second one, which also happens to be the one that makes Ator unique.

Aside from creating a physical, easy-to-use node that hosts a decentralized network such as Tor, and in addition to creating a way that encourages new users to adopt and host the Tor network, further making it more secure for its user, it also handles its token distribution differently than most Proof-of-Stake protocols.

This is because the data used from the physical Ator relay node also runs its own consensus mechanism, formerly known as Proof-of-Uptime.

Although, since the second quarter of 2023, they have begun referring to this as Consensus Weight.

So what is Consensus Weight?

Essentially Consensus Weight is what you have put into the network.

Factors such as how much bandwidth you’ve used, how much data you’ve encrypted, your server uptime, and more, all play a part in how much you are rewarded.

This Consensus Weight data is stored on Arweave, a blockchain storage solution, which ensures the validity of the Consensus Weight data.

This data is then correlated to the distribution of the newly released ATOR tokens.

Those who have put more into the network, receive more of the reward, with Arweave being the immutable ledger on which the Ator relay data is stored, so it cannot be manipulated after the fact.

But how about the tokenomics?

The total supply of ATOR is 100,000,000, and it has been allocated as follows.

45% went towards providing liquidity for the ATOR/WETH Liquidity Pool on the Uniswap DEX.

10% has been allocated to the baseline relay rewards, vested with a weekly release schedule based over 2 years.

A further 10% was allocated for the development, team, and outreach, and is also vested over 2 years.

Another 10% went towards Centralized Exchange listings, partnerships, and development. Though this 10% is currently locked.

The final 25% was available for sale as a raise of funds. The funds generated from this were put towards the development of the protocol and the cost of hardware.

Only 3 wallets hold over 2% of the total ATOR tokens. Two of these wallets are likely the wallets involved with the 45% used towards liquidity, and the 10% locked for centralized exchanges and future partnerships.

The third wallet is the MEXC exchange, which was the first centralized exchange to list ATOR token.

Otherwise, all wallets hold less than 2% of the total ATOR supply.

In conclusion, although still in development, Ator has a legitimate use case that can provide benefits to millions of people who already utilize the Tor network.

If you’re already hosting a Tor network node, which many thousands of people already do, why not do it for a little income as well?

Though, of course, nothing is ever guaranteed in crypto even less so, for projects still in development.