Nym Tokenomics

Nym Network is composed of two main elements, the Mixnet represented by Nym Nodes routing and mixing the data packets, and Nyx blockchain distributted accros validator set, using smart contracts (based on cosmwasm (opens in a new tab)) to monitor and reward Nym Nodes by querying API endpoints and distributing NYM token to operators according to work done by their nodes. All Nym nodes and validators are run by decentralised community of operators.

• Nym tokenomics are based on the research paper Reward Sharing for Mixnets (opens in a new tab)
• For a more comprehensive overview, token live data and supply graphs, visit nymtech.net/about/token (opens in a new tab)
• To read about rewards calculation, visit Nym Node rewards page
• To understand the implementation and release plan, see Nym operators roadmap

NYM Token: Incentivise Stability & Secure Reputation

Besides the Mixnet itself, Nym Network is secured by its own blockchain Nyx (IBC on Cosmos) with a native token NYM.

NYM token key features

• Incentives: Distribute rewards to decentralised nodes based on mixing and routing (work). This dynamic ensures that the network is as robust as possible - the nodes are chosen every hour according to their performance.

• Network take over defense: Another decisive factor for a node to be chosen to the network active set is reputation. Reputation is a size of stake (delegation) where delegators earn proportional percentage of nodes rewards. Nodes without reputation are not chosen to take part in the network active set.

• Centralisation defense: Any node can only have a certain stake (called stake saturation) to earn maximum rewards, increasing stake level per node leads to decreasing rewards for the operator and all delegators. This feature makes it more difficult for whales to over-stake their nodes or to attract more delegators (stakers) as they would become dis-advantaged.

To learn more about rewards calculation and distribution, read the next page Nym Mixnet Rewards.

Utility

NYM token is a first and foremost a utility to secure Nym Network.

Nyx blockchain's validators run API to monitor the network and node performance. Based on the live input the operators and stakers of the working nodes get rewarded. The network is adjusted and re-randomized in the beginning of each epoch (60 min) composing the best performing nodes with the highest reputation.

This creates an incentive for people to operate Nym nodes as quality and reliable service. The reputation system also works as a network defense against a large adversary take over or sybil attacks.

Node reputation is calculated by delegation. Delegation is a stake done by NYM token holders on top of nodes they want to support to join the network as it compensate the stakers with APR. Therefore there is an incentive for NYM holders to stake their token on top of nodes which they believe will perform well.

To prevent a whale takeover and centralisation, the revenue grows alongside nodes stake size only until a certain point, after which the rewards per staker start to decrease. We call this mark node stake saturation.

Thanks to Nyx blockchain API monitoring, the flow is dynamic and constantly optimized based on live metrics. Below is a detailed explanation and reckoning of Nym tokenomics logic.

Tokenomics

Summary in Numbers

Below is a table with token supply distribution.

To get live data, visit Nym token page (opens in a new tab) or see how to query API endpoints.

Calculation & Explanation

To get a full comprehension of node operators rewards calculation and delegators APR height (opens in a new tab), we need to understand some basic logic behind the numbers presented. This chapter covers some of the most essential variables in Nym tokenomics flow.

 ┌───────────┐   staking   ┌───────────┐   sum of      ┌───────────┐
 │           │   supply    │           │   nym nodes   │           │
 │circulating│   scale     │  staking  │   in rewarded │   stake   │
 │  supply   │   factor    │  target   │   set         │saturation │
 │           ├────────────►│           ├──────────────►│           │
 └───────────┘             └───────────┘               └───────────┘

Supply

NYM token is capped at 1b. Visit Nym token page (opens in a new tab) to see live data and graphs.

Staking target

A number of aimed NYM tokens to be staked in the network. The staking target a is multiplier of staking supply scale factor and circulating supply.

Staking supply scale factor is currently it's set to be

50.0%

The value of this variable can be changed to optimize the metrics of the network. With a current circulating supply of

803_103_234

Stake saturation

Node reputation in a form of self bond or stakers delegation. Stake saturation is calculated as:

With current circulating supply of

803_103_234

Active set

Nym Network needs an optimised number of nodes to route and mix the packets. This healthy balance lies in between being too congested - which would detriment speed and user experience - on one side, and having too little traffic per node - which would could weaken anonymity - on the other.

The way how we approach this challenge is different for Mixnet (5-hop) and dVPN (2-hop) mode.

In both cases, the selection algorithm also looks whether the node runs with Terms & Conditions accepted AND if it's not a legacy binary version. In case either of these criterias are not met, the node will have be excluded from the rewarded set selection.

To read more about rewards calculation, please see next page Nym Operators Rewards.

Query Validator API

We have available API endpoints which can be accessed via Swagger UI page (opens in a new tab). Or by querying the endpoints directly:

curl -X 'GET' \
  'https://validator.nymtech.net/api/v1/circulating-supply' \
  -H 'accept: application/json'sh
 
curl -X 'GET' \
  'https://validator.nymtech.net/api/v1/circulating-supply/total-supply-value' \
-H 'accept: application/json'sh
 
 
curl -X 'GET' \
  'https://validator.nymtech.net/api/v1/circulating-supply-value' \
-H 'accept: application/json'sh
 
curl -X 'GET' \
  'https://validator.nymtech.net/api/v1/epoch/reward_params' \
-H 'accept: application/json'sh

The unit of value is measured in uNYM.