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# System prepended metadata

title: SIGMA Pool

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# SIGMA Pool
## What is the SIGMA pool?
AlgoDAO’s SIGMA Pool is a specially-designed liquidity pool funded with project tokens every time a new project completes a successful seed financing or IDO through AlgoDAO.

The SIGMA pool can be described as a reserve of all the project tokens incubated through AlgoDAO. It is collectively owned and operated by members of the AlgoDAO community. And the best part, AlgoDAO members can claim these project tokens.

The final supply of $SIGMA tokens is 100,000,000 tokens that is released every block over a 10-year period with a per-epoch decreasing emission rate. The emission rate function slows down the release rate of the tokens to ensure an even distribution over the years.

[Learn more about how the SIGMA pool works here](https://medium.com/algodao-fi/introducing-the-sigma-pool-algodaos-special-purpose-reserve-pool-f645c2fece7)

## How does AlgoDAO’s SIGMA Pool work?
When projects are about to be incubated on AlgoDAO, they commit to contributing a percentage of the total tokens to be sold during the IDO towards supporting the SIGMA Pool.

On the successful completion of a seed funding round on AlgoDAO, the project will deposit 10% of their project tokens sold during the seed funding into the SIGMA pool. Similarly, when projects successfully complete an IDO round on AlgoDAO, they deposit 30% of the project tokens sold during the IDO in the SIGMA pool.

For example, if a project wishes to raise US$200,000 during an IDO by selling 400,000 tokens (at an effective token price of US$0.5), 30% or 120,000 tokens will go to the SIGMA Pool. However, it is important to note that both the 10% and 30% are DAO-governed parameters subject to change.

## What is SIGMA minting?
SIGMA minting is the process of claiming the project tokens accruable to the $SIGMA tokens that you have farmed.

Remember that the SIGMA Pool contains project tokens from all projects that successfully completed a seed or IDO funding round on AlgoDAO. The $SIGMA tokens farmed represent an index basket of the projects incubated on AlgoDAO. After you have staked $ADAO to farm $SIGMA tokens, SIGMA minting is how you convert the SIGMA tokens into the actual project tokens.

To “claim” the project tokens you need to burn your $SIGMA tokens. Burning $SIGMA tokens is simply the process of executing a burn function that removes them from circulation by sending them to an unusable wallet address, where they can never be accessed again.

Once you have successfully completed SIGMA minting, you will receive a pro-rata percentage of all the project tokens sitting in the pool at the time of the minting based on the number of $SIGMA tokens you have relative to the ADAO members.

## What is SIGMA farming?
SIGMA farming is simply the process of staking $ADAO tokens to farm $SIGMA tokens. You need to stake $ADAO tokens to qualify for SIGMA farming. AlgoDAO members who stake $ADAO tokens can expect to receive a pro-rata distribution of $SIGMA tokens, which are released at fixed time-step (block, hour, minute, second…).

The more $ADAO tokens you stake, the more $SIGMA tokens you can farm as the farming function pro-rate your $ADAO stake relative to the $ADAO staked by other users and the amount of $SIGMA tokens due for distribution based on the rate emission rate.

