Proposed Path Forward for NAM Utility & Namada Sustainability

Ecosystem & Strategy
1

Namada provides exceptional privacy not just for the NAM token, but also for a wide range of MASP assets supported assets like ATOM, OSMO, TIA, USDC, UM, NTRN, NYM, and soon ETH, SOL, and many more.

However, delivering this level of privacy comes at a cost and we simply cannot provide it for free forever.
If people truly value the privacy Namada offers, there must be a fair exchange, which means creating real, sustainable demand for NAM.
That’s the only way a fair market strategy can support both the NAM token and the broader Namada ecosystem.

** Suggested Improvements to Boost NAM Utility and Network Sustainability**

1. Make NAM the exclusive fee token.

Fees should be paid only using NAM no more paying fees in MASP tokens . This will immediately create real demand for NAM and give it clear utility within the ecosystem.

2. Prioritize NAM shielding with the highest rewards.

should enable rewards for shielding NAM and should offer a higher APR than any other MASP assets. Introduce exclusive incentives for NAM shielders to encourage long term holding and usage.

3. Implement transparent fee burning.

Burn 100% of collected fees on a monthly or quarterly basis, and publicly display this metric at https://metrics.namada.net. This introduces deflationary pressure and strengthens value for holders.

4. Combine staking + shielding rewards for NAM.

Launch a program that lets users earn enhanced rewards by both staking and shielding NAM encouraging participation while securing and decentralizing the network.

5. Launch liquidity mining for NAM pairs.

Deep liquidity is essential. Launch incentives for NAM based LPs on major DEXs. Tech alone isn't enough without liquidity and market making, even the best product will struggle.

This will help [RFC] Incentivize NAM LPs on DEX

6. Introduce MASP Access & Asset Limit Auctions.
Instead of allowing any project into the MASP for free via governance, introduce a competitive auction system. Projects can bid for inclusion by purchasing NAM and either locking or burning it. For projects already in the MASP, run asset limit auctions if they want to increase their usage capacity. Namada offers the most advanced privacy technology in the crypto space if teams want access, they should compete and pay for it. This not only adds value to the MASP but also creates real demand and upward pressure on NAM.

Namada’s privacy technology is world class far ahead of competitors.
But to succeed long term, the NAM token must have real value and utility.

These proposals can help align incentives across all stakeholders: users, infra providers, and long term investors ensuring the project remains both viable and fair.

We believe in Namada and want to see it thrive but that depends entirely on making NAM truly useful.

7 Likes
3

Very good, the above solutions are all good, but I feel that they lack marketing and a large number of basic users. The destruction mechanism is good, but I feel that it only has the effect of single destruction, while the issuance promotion I submitted does have the effect of triple destruction and increases the user base at the same time.

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please feel free to post your edit to point #3

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First, if the newly issued tokens can be shielded, and the issuer is willing to use shielded addresses to send and receive airdrops, can we increase the number of users on a large scale? Why would the issuer be willing? Maybe it is to get more fees or to cooperate together. Or is it a good idea for the team to issue meme coins with nam culture to increase the user base?

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That’s a great idea and definitely worth considering. Extending MASP to support NFTs and meme tokens could attract more users and use cases. Typically, changes like this would be introduced and implemented through governance proposals. but yes it will help

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i am in namada discord you can reach me there . thanks

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Guys here you need a good marketer, not just accept any changes in the network, but you need a whole strategy.
Example: We have been involved as the first validators of Solana since before it was traded. We watched how the network evolves and what direction the blockchain is going in and what price is going, in brief for those who are not familiar:

  1. marketing was launched
  2. serum exchange (open source) was launched.
  3. FTX and Alameda
  4. Launch and development of JitoClient
  5. Mem tokens and the hype on them, which is still going on.
  6. launch of sites for instant token creation online (log in only from your wallet and pay the commission).

And then people began to pull up with the development of meme snipers, dex and the launch of projects on Solana as a fast blockchain (Jupiter, Raydium, etc.)
And all this brought and still brings people, which creates a constant demand for tokens! Not a one-time !!!

And always, always attracted venture capital companies and their capitals, which invested millions, to develop and publicize Solan and its ecosystem. Now Validators are being cut back, reducing the steak share thereby opening up opportunities for big players and price increases.

Which of these could be taken for Namad

  1. Create meme tokens - maybe even with shielded account - do PR, advertise new tokens.
  2. Creating a completely anonymous decentralized exchange, where you can buy Atom, Eth, Osmo, etc. from an encrypted account, I don’t know how much real balance the buyer has.
  3. All transactions with MASP and ibc should be done only in NAM.
  4. It is possible to reduce the % of masp, so that staking works (useful for validators).
  5. Allocation of grants for development of NEW web3 tools using the advantages of Namad.
  6. Attracting Ambassadors
  7. Attracting developers - including the possibility of smart contracts to work with memtokens.
  8. NFT of course

Well, this is in brief and minimal = ) You need to take working strategies and not look for new ones in the hope of growth or just connecting new channels for MASP.

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At the worst end VPN service where you need to buy NAM for use, and these NAM burn!

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I agree on all points.
I would add 2 more.

A)
Shielding should be a paid service in Namada (at least in the long run)

At very beginning shield rewards could be enabled not just for NAM but for the other assets to attract more users and let them appreciate the privacy that Namada offers, but in future it should not be for free for the other assets.

At the end of the day, the service offered by Namada is all about shielding and as such it should be a paid service (with NAM).

Paying with NAM (for having the shield services) plus burning those fees, would be an additional mechanism to drive the NAM price up.

B)
Adaptive Fee to include the NAM price as part of the model

Currently, transaction fees in Namada are extremely low relative to the current value of the NAM token.

This proposal suggests adjusting transaction fees to account for both the complexity of the transaction and the market price of NAM.
By doing so, we can prevent fees from becoming either excessively expensive or too cheap (as they are today) as the value of NAM fluctuates over time.

3 Likes
16

Hey,

Seeing some great suggestions! I was thinking about ways to introduce more utility two days ago but was a bit hesitant to come forward with it, because I find tokenomics a tricky concept. I’ve seen many projects with interesting concepts still fail miserably.

Thanks for bravely stepping forward @cryptosj :)!

Some ideas will share common ground with above mentioned ones. The core concept I was primarily focused on was to introduce a relationship between the amount of NAM a user holds and the APR they receive from shielded rewards.

Here follow several independent models that could be explored, discussed, remolded, discarded, fused together or whatever. I’ll try to introduce the ideas in a modular fashion, that way they remain simple ideas that could be built and improved upon:

  1. Tiered APR
    Users receive higher shielded APRs by holding more NAM, with rates increasing in predefined tiers (e.g. 0–100 NAM, 101–500 NAM, etc.). This creates a simple, but predictable system.

  1. Proportional APR
    Shielded reward APRs could scale continuously based on the amount of NAM a user holds. This could be based on a participant’s delegations, shielded NAM or transparent NAM; where delegated NAM is the most valuable (has more weight APR-wise), followed by shielded and transparent balance. This encourages participants to increase their stake in order to access the full benefits of the system.

    (To maintain fairness and avoid excessive returns for large holders, this model could include an APR cap. Or let it work similar to a PD Controller.)

  1. More value shielded requires more NAM
    This one is closely related to 2. but emphasizes the idea that a person doesn’t just get more value out of the system by only shielding foreign assets. The user has to hold NAM in a proportional manner to benefit fully from shielded rewards. I’ll leave the ratio undefined. But this prevents whales of freely sucking us dry. That sounded very graphic, uhum.
  1. Minimum NAM threshold
    This idea has already been fleshed out by others above. But a minimum NAM holding could be required to access shielded rewards at all.
  1. Lock-up multipliers
    Rather than just holding NAM, users could choose to lock it up for fixed durations (e.g. 3, 6, or 12 months) in exchange for an APR boost. This would incentivize long-term commitment and reduces the circulating supply.

  1. Protocol-wide metrics
    APR rates could be influenced by protocol-wide metrics, such as: the total amount of NAM staked or circulating supply. For example: the more we collectively stake/lock, the higher the shielded reward APR would be. Conversely, if fewer users stake NAM, APRs would decrease to encourage more protocol-wide participation. This feedback loop could reinforce the health of the ecosystem as a whole. Go team spirit, go :)!

    This is a tricky one to consider though, since more stake does decrease our normal staking rewards. And if shielded rewards were to gain the more we stake, the two systems would clash with one another if the calculations are not on-point.

  1. Redeem rewards, burn a portion
    A burning mechanism linked to shielded rewards has been mentioned above already. But just want to add that perhaps it’s interesting to make shielded rewards be something that needs to be redeemed instead of it automatically getting accumulated and deposited to a user’s address. That way shielded rewards don’t immediately become a part of the circulating supply. Redeeming would then deduct a small NAM fee which would effectively get burned.

  1. User health (a gamification model)
    I’m sorry fellow SE comrades. I had to do it.

    APR boosts could be linked to a health score reflecting a user’s overall engagement with the network. This score might include factors like:

    • Amount of NAM staked
    • Participation in governance voting
    • Validator uptime or other node operation metric (if applicable)
    • Other community or protocol achievements (might be @Gavin’s lane who tends to come up with amazing ideas).

    This model gamifies participation and rewards “healthy” users who contribute meaningfully. But I do have to say I’m very hesitant about this idea (SE PTSD alert). Practically, this might be too much to implement, not many of us use only one wallet address (it would force people to only shield into one to benefit, which is a security concern in itself) and linking addresses I believe none of us wants to see happening. So there are just a lot of factors to consider with this approach, but wanted to put it out there as it may spark an idea in others.

Thanks again @cryptosj for taking the initiative to start this discussion. Also the rest who are coming through with awesomeness!

ZEN

1 Like
17

@zenodeapp Thank you so much for sharing these ideas I truly appreciate them and really love all of them :heart:. I hope the team will start taking these suggestions into consideration.

2 Likes
18

Thanks for putting together these suggestions.

On point #1:
I have to disagree, I think it is preferable to pay fees in any asset from a ease of use perspective - I’ve already IBC’d OSMO without any NAM in an account, it’s really good UX and should lead to greater Namada adoption, which is core for the value proposition.

The IBC tokens you need to spend significantly more for gas than what you would using NAM and these tokens can then be used to buyback NAM. Doing this preserves the UX as well as drives value for NAM.

On point #2:
This incentivizes NAM holders, but I don’t think it drives up adoption of Namada in the long run.

It is a tricky point though because the MASP shielded pools are meant to create the foundation for shielded transactions, which drives Namada adoption - but at the same time, we don’t want users to just shield their non-NAM assets to get the yield if there is no adoption of MASP shielding (and thus the fee accrual to NAM).

It might be worth tuning the MASP rewards so that they give a reasonable APR at a reasonable TVL for each asset which is in line with the current usage - i.e if we’re giving 10% APR at $20M MASP but doing $2k/day in shielded traffic, that doesn’t seem like a good use of rewards.

#3 - Definitely a good idea.

#6 - This is tricky - it’s a good idea on one side in that it creates NAM demand - but the current design is that shielded traffic and use of the MASP drives fee’s and then creates NAM demand.

By gating the MASP we potentially reduce the NAM demand through fees and also introduce other issues because a lot of these tokens are decentralized and their user base is therefore widespread.

Namada’s value prop is that specific users looking for privacy can use the MASP, this would be a smaller subset of the various asset’s holders than would be needed for a community pool spend approval, some tokens don’t even have a community pool (ETH).

My view is that more assets are better in the pools, but that incentives for the pools need to be demand driven - if there’s no demand there should be very low cost to NAM for MASP rewards to that token.

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#3 - Definitely a good idea. But I think a better mechanism should be adopted. The idea of ​​#3 is outdated. Better attention related to marketing should be adoptedI have submitted relevant ideas. The growth of users is continuous, and the creation of transaction fees is unlimited.

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Inflation rewards should not appear. I think deflation rewards should be adopted, or even rewards that are several times more than deflation. Some ideas cannot be discussed, so just leave them here.

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Why Binance can bring in so many new users? First, I think we understand the needs of users. Users just need initial tokens to get high profits. What do users contribute? They contribute handling fees. In the same way, can we copy them and use their handling fees as donations to the investment dao for specific new users? We can also give users high profits through investment or management of the investment dao. At the same time, can we specify the growth of our users every time? An application that considers users will definitely be followed. In the future, the handling fees contributed by users, holding nam, and the market effect brought by the activities will increase many times, and it will be a very short time, and it can continue to grow for a long time.

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hello! as per the Validator Circle :yellow_circle: conversation, here’s the forum post I promised: NAM Utility & Namada’s Path to Success

ideally this helps to address some of the points raised here

fyi i’ve also opened a discord hot topic here for realtime chat