Nodle Network Updated Tokenomics v1.1 Release Date July 28th 2022 — Part 2 of 4
Welcome to part two of a four-part series covering Nodle’s updated tokenomics documentation, which was released on July 28th, 2022. The remaining two parts in this series will be posted over the coming weeks, so watch this space for updates.
The Token Issuance
The 12.6 billion remaining tokens are periodically issued to reward edge nodes (smartphones running the SDK), network operators (agents operating the network and the oracles ensuring edge nodes behave properly), and collators for their participation in the network.
Initially, the infrastructure needs to be built. A limited supply entails scarcity, which gives the first movers a competitive advantage in building the network’s supply. When the network gets built, there is competition on the supply side, as the network builders are fighting for the subsidy.
Once the infrastructure is built and operational, there needs to be demand for the infrastructure to remain valuable. The network will not achieve its goal if the demand cannot compensate for the subsidy. Therefore, as demand for the network grows more substantial, the issuance will slowly decrease until rewards from the demand side take over to incentivize network participants. 90% of tokens will be issued nine years after the start of the Nodle parachain in May 2022, whereas the final tokens will be issued five years after.
The token issuance follows an S-curve defined per the formula:
Where:
The S-curve for the issuance of coins ties to a normal distribution of tokens over the course of the issuance, as here:
Both curves draw three different phases:
➡️ Phase 1: network growth. As the network grows, token issuance, although small, can fairly reward early adopters with a balance mechanism built-in: the smaller the network, the stronger the incentive for early nodes to join and contribute. Nonetheless, if the network grows too fast, individual nodes will receive fewer rewards as the issuance is fixed and predictable. This mechanism allows for keeping the growth of the network under control, as the network needs to learn itself and iterate to bring all the necessary tools, dashboards, and security to allow a safe scaling.
➡️ Phase 2: acceleration. Once the network matures, as the number of nodes accelerates, so do the available rewards. At each reward event, nodes still share a fixed allocation of tokens. Nonetheless, as the value of the network increases with Metcalfe’s Law*, rewards from demand start to significantly add to the rewards from the issuance, still encouraging the growth of the network. Beyond this, demand drives the value of the utility token higher.
➡️ Phase 3: equilibrium. The network reached the critical size that enables economically sustainable network use (asset tracking, device connectivity, swarm computing, etc.). The reward for participating slows gradually as demand takes over to reward the nodes.
*Metcalfe’s law is an empirical law formulated by George Gilder in 1993. It states that the value of a telecommunications network — whether the telephone network or the internet — is proportional to the square of the number of connected users of the system. It was later applied to leading social networks.
View the complete Tokenomics.
About Nodle
Nodle connects the physical world to Web3 by using smartphones as edge nodes. The edge nodes read devices and sensors in the physical world using Bluetooth Low Energy (BLE) and connect that information to the blockchain. Creating a geolocation-based layer one that can be used by many unique applications built for the hyper-connected, mobile-oriented world we live in, including real-time asset tracking. Nodle creates an economic model that is secure, private, and scalable. Anyone with a smartphone can join the network in return for Nodle Cash tokens ($NODL). Nodle provides insights for consumer electronics manufacturers, enterprises, smart cities, the finance industry and beyond. Since its creation in 2017, Nodle has become one of the world’s largest wireless networks by number of base stations. To join, download the Nodle app for iOS or Android.
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