Midnight’s tokenomics and incentives model is designed with fair access as a core pillar from the beginning, setting the tone for how the network is launched, governed, and sustained.
The newly released tokenomics and incentives whitepaper lays out the network’s foundational economics: how resources work, how rewards will be earned, and how the NIGHT token is distributed to make the network open to as many people as possible.
NIGHT: the utility token
NIGHT is Midnight’s utility token and the driving force behind the network’s tokenomics, with a supply of 24 billion tokens. It powers the generation of DUST (the capacity resource), fuels participation incentives, and supports future governance. The whitepaper outlines its core attributes, properties, and introduces its multiple roles in the ecosystem, including:
- Resource generation: holding NIGHT will generate DUST, the Midnight network capacity resource used to power transactions and smart contract execution.
- Block production rewards: NIGHT will be distributed as a reward to incentivize block production via a protocol-managed token Reserve.
- Decentralized governance: over time, NIGHT will enable holders to take part in decentralized, on-chain governance, helping to shape the protocol’s future.
- Ecosystem incentives: it is expected that a NIGHT on-chain Treasury will be used to fund Midnight ecosystem growth activities and projects that are selected via future on-chain governance mechanics.
DUST: the renewable shielded resource
DUST is the shielded resource that powers transactions on Midnight. It is perpetually generated by holding NIGHT, allowing users and developers to plan network usage without guessing at future costs or spending utility tokens to power network transactions. DUST also works to prevent denial-of-service attacks on the network.
The whitepaper covers the role of DUST, its relationship with NIGHT, and the basic mechanics behind the resource’s generation and decay mechanisms, including:
- DUST generation and capacity.
- DUST designation and transaction enablement.
- DUST decay and double-spending prevention.
Cooperative tokenomics
Midnight’s cooperative tokenomics model is designed to enable multichain architecture and to allow the network to become a truly interoperable layer that evolves as a connecting tissue across many different networks.
The whitepaper envisions mechanisms for expanding network access and enabling a multichain Web3 future, including:
- The concept of a capacity marketplace to expand network access.
- Potential capacity marketplace models, both off- and on-chain.
- How these marketplaces could enhance the on-chain Treasury.
Incentives: block production rewards
The Midnight network will leverage Cardano’s robust proof-of-stake system for consensus and security. The tokenomics and incentives system is designed to achieve sustainable and predictable network operations. The whitepaper covers:
- Block producers: Midnight block producers and the role of Cardano SPOs.
- Block production rewards: how block producers are rewarded for producing blocks and validating transactions.
- Calculating rewards: how network parameters interact to dispense block rewards sustainably and predictably.
Fair NIGHT token distribution
The paper introduces the NIGHT token distribution framework called Glacier Drop: the free, multi-phase distribution mechanism designed to bootstrap a broad and diverse community around Midnight. The token distribution will shape the network’s future, and the goal is to build an ecosystem that’s resilient, diverse, and fair, where builders and users alike have a real stake in the network. Highlights include:
- Three distinct claim phases, starting with the Glacier Drop phase.
- Eligibility and mechanics of each phase
- Key milestones and expected timeline of the distribution
Stay tuned, more details on the distribution will follow.
Explore Midnight tokenomics and incentives
Midnight is designed to work for more people: fair distribution, predictable performance, and cooperative tokenomics for a network that will deliver rational privacy. Read the whitepaper for a comprehensive understanding of how tokenomics and incentives support a more open, resilient and useful network.