Mining incentives, reward sizing, and tokenomics question

Nodes & Mining
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#1

Hello everybody. I was wondering if anyone could help me to understand how the reward size is determined? On the block explorer, I noticed the current reward value I see over and over is 11.41552511 NKN. Does this value fluctuate based on network traffic, total supply, or size of data relayed? How is there sufficient incentive for miners to keep the network healthy and strong? At current prices, it doesn’t seem profitable to run nodes on cloud hosting. I’m running 15, and realized that at the average NKN reward rate, it’s not exactly profitable… :frowning:

Can anyone help me understand the tokenomics a bit better? What will be the catalyst for the growth and adoption of the NKN token itself?

Thanks :slight_smile:

#2

The mining reward (currently 11.4+ NKN per block) is computed using the economical model we published. Basically the total mining reward each year is a pre-set value (starting from 18M first year and linearly decrease), and evenly distributed among all (1576800) blocks in the year.

In additional to the mining rewards, there are a few other source of income:

  1. Transaction fee
  2. Mining bonus address (MBA). Some income (like name registration) will go to MBA and increase the future mining rewards.
  3. Provide direct service and earn rewards (like tuna, nCDN, etc). We will have a version in the future that includes such services so that node can earn more additional rewards.
2 Likes
#3

In my opinion, the reward per block should increase, because most mining on servers purchased by discount coupon such as Digital Ocean, Google Cloud, among others. But when the coupon runs out, many people will no longer have us.

Each knot must be more profitable than $ 5 a month to monetarily encourage people to have knots.

#4

The reward per node is not determined by us, but is determined by the number of nodes in the network. To be more precise: reward per node = total reward in network / number of nodes in network. If reward per block doubles, people will simply run twice more nodes to keep the single node reward the same. In short, network size will be dynamic to keep mining just profitable with a small margin. This is basically the same for every single blockchain network.

1 Like
#5

From my research on this forum, I see that nkn mining today is not profitable. If 1 nodes (vps) earns 11nkn per month max. Then you have to hope that the price goes up.

#6

I don´t get how, with the numbers you put there, there is “583,666,666 NKN - Circulating Supply” according to nscan.io…

Where did the rest of that coins came from? :confused:

#7

I think the number came from coinmarketcap, which is not accurate because they only consider token to be circulating if it has been moved. Tokens that are never moved are not considered as circulating even if they are. Please refer to the official economic model for most accurate info.

1 Like
#9

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