What is NEM (XEM)?

Deep Dive

1. Technology & Architecture

NEM uses Proof of Importance (PoI), a consensus algorithm that evaluates users’ network contributions (e.g., transaction frequency, XEM holdings) to determine their eligibility to validate blocks. Unlike Proof of Work or Proof of Stake, PoI incentivizes active economic participation rather than passive wealth accumulation. The platform is non-Turing complete, prioritizing security and scalability over complex smart contracts.

Its Eigentrust++ reputation system identifies and isolates malicious nodes, enhancing network reliability. The Java-based NEM Infrastructure Server (NIS) supports lightweight clients, enabling efficient node operation.

2. Core Functionality

NEM’s mosaics let users create customizable tokens (e.g., loyalty points, shares) with mutable or immutable properties, while namespaces provide branded domains (e.g., company:asset) for organizing digital assets. Features like multisignature wallets and encrypted messaging cater to enterprise needs, such as supply chain management or document notarization (Apostille).

The Mijin fork offers a permissioned blockchain for private networks, used by institutions like financial platforms and governments for audit trails and asset tracking.

3. Tokenomics & Governance

XEM’s supply is capped at 8.999 billion, with harvesting (similar to staking) requiring a minimum 10,000 XEM vested balance. Vesting occurs gradually (10% of unvested tokens daily), encouraging long-term holding. Transaction fees are burned, creating deflationary pressure. Governance is community-driven, with updates like the 2021 Harlock hard fork focusing on enhancing media and payment use cases.

Conclusion

NEM is a blockchain ecosystem balancing public accessibility with enterprise-ready private solutions, distinguished by PoI and modular asset tools. While its technical innovations remain relevant, how will it adapt to competing platforms offering broader smart contract flexibility?