Symbol Tokenomics

About Symbol Tokenomics

The Symbol public chain is a self-sustaining economic ecosystem involving node operators, harvesters, investors, users, and the XYM token. In this way, it’s similar to many decentralised blockchains, but there are important differences that make it easier for anyone to earn rewards. Here are the basics of the system.

Blockchain: Symbol
Native currency: XYM
Initial Supply: 7,842,928,625 XYM
Maximum Supply: 8,999,999,999 XYM
Inflation Rate: Pegged to bitcoin inflation
By running node, can earn block rewards. This is called harvesting in Symbol
Holders can earn block rewards by “Delegated Harvesting” to a node, even if they do not run the node.

XYM Supply and Inflation

Symbol was developed under the codename ‘Catapult’, the next generation core engine for the public blockchain NEM, which started development in 2014, with the aim of improving performance, enhancing functionality and consensus algorithms. This was completed and the new public blockchain released on 17th March 2021 with the core engine ‘Catapult’ is Symbol.

Users who held XEM, the native currency of the NEM blockchain, and who wished to be granted XYM through a procedure called opt-in, or users who held XEM on some exchanges that had opt-in, and also who held XEM at the time of the snapshot (NEM block high 3,105,500, 12th Mar. 2021 04:29 UTC), 7,842,928,625 XYM were granted at public chain release. The maximum supply of XYM was 8,999,999,999,999 and a further 1,157,071,374 will be supplied as an inflation reward. The rate of inflation is approximately the same as the rate of bitcoin inflation and will be supplied over the next 100 years. As with harvesting rewards, Symbol rewards are released per block creator and are based on the PoS+ (Proof of Stake+).

Proof of Stake+（PoS+)

PoS is a well-known algorithm in the blockchain, but Symbol uses PoS+ with some improvements to PoS. And Symbol uses the term harvesting rather than mining when describing block rewards earning.

PoS+ lets nodes create blocks based on their XYM stakes, which are holdings. The more tokens held by a node operator, the higher the chances of creating the next block and earning harvesting rewards. Symbol adds some improvements with PoS. PoS+ calculates a score for each node operator based on the size of their stake and other factors, such as recent network activity and the stakes that other users may delegate to them. In this way, PoS+ attempts to incentivize usage, competition for low fees, and other desirable behaviour. You can read details on how PoS+ is calculated in the（Symbol whitepaper）

Nodes

Node operators all over the world keep the Symbol protocol robust and decentralised. For keeping the system running, node owners earn rewards below.

Node operators earn transaction fees based on their own XYM stakes.
Node operators earn inflationary rewards, which are added to the transaction fees. Together these are called block rewards.

Node operators can set up their nodes locally or on cloud services.

*For more information on setting up a node, see "How to construct a Symbol node"

Block Rewards

Since Symbol’s blocks are confirmed several times per minute, rewards are frequent. Block rewards consist of inflation rewards and transaction fees. The chances of earning a block reward are based mainly on the amount of the operator’s XYM stake, as well as other factors like network activity. Both node operators and anyone else with a XYM wallet can earn block rewards.

The higher an account’s XYM balance, the higher the chance of it earning a block reward. Even those who don’t run a node can earn block rewards by delegating their stake to a node (Delegated Harvesting).

Delegated Harvesting

XYM holders who don’t operate nodes can also earn block rewards by utilising your account's importance score, such as XYM holdings (with a minimum 10,000 XYM holding requirement) delegated to a node. This is called delegated harvesting. The Importance Score of the delegator is added to the Importance Score of the node account to which it is delegated. Holders who delegate their stake retain full ownership of their XYM and never expose their private keys.
When delegated harvesters earn a block reward, the node operator who processed it earns 25% and the delegated harvester earns 75%. In this way, a node operator can greatly increase their earned rewards, and all holders can participate in rewards whether or not they run a node.

*For more information on Delegated Harvesting, see"Symbol Wallet Operation Details"

Transaction Fees

Node operators can set their own minimum fees for which they wish to process transactions. The lower the fees accepted, the more transactions they will be able to process. Generous node operators may even choose to process transactions for free if they wish. This creates competition among node operators.

Total Node Income

To summarise, node operators will earn income from block rewards (inflation + transaction fees) based on their own stakes and a 25% share of delegated stake block rewards.

Inflation Rate

Symbol’s inflation is mapped to bitcoin’s inflation with one difference. Bitcoin halves its rewards every four years. Symbol also drops its reward rate by half every four years, but instead of a single big drop, these reductions are spaced out to occur every quarter. This gives the same overall inflation as bitcoin, but with a more gradual decline.