Question 1

What is ETN?

Accepted Answer

ETN is the native cryptocurrency of the Electroneum Smart Chain (ETN-SC). It can be transferred between accounts and is also the only payment asset used when users submit on-chain transactions or deploy or call smart contracts to pay for computation. ETN-SC is an EVM-compatible blockchain: transaction requests are validated by the network, change the EVM state after execution, and are committed to the blockchain. Therefore, “using ETN” may mean either making an ordinary transfer or paying for the execution of smart contract code.

Question 2

Why is ETN required to execute transactions on the Electroneum network?

Accepted Answer

Using ETN-SC requires ETN because the network allocates limited computing capacity through pricing. When users broadcast a transfer or contract call, they must provide ETN to pay Gas; the required fee depends on the computational resources consumed by the operation and the network-wide demand for computing resources at that time. This mechanism makes requesters bear their own computation costs. If an application submits a resource-intensive or infinitely looping call, the transaction stops when its available ETN is exhausted, rather than occupying shared computing resources indefinitely at no cost.

Question 3

How does ETN-SC process transactions and reach consensus?

Accepted Answer

ETN-SC uses Istanbul Byzantine Fault Tolerance (IBFT) consensus. The signatures of proposers and voting validators jointly protect block contents; for a transaction to change the EVM state recognized by the network, it must be validated, executed, and committed to the network. The fee mechanism is connected to this process: a transaction request provides ETN compensation to enable validation, execution, commitment, and propagation work, while making the abuse of computing resources costly. A transaction is not completed merely because it is “broadcast”; it becomes a completed state change only after being processed and committed by the network.

Question 4

How is ETN minted and burned?

Accepted Answer

The quantity of ETN is affected by both minting and burning. The protocol mints new ETN as block rewards whenever a block is confirmed through consensus; users cannot mint ETN themselves. On the other hand, the base Gas fee portion of the fee paid for every transaction is set according to network transaction demand and permanently burned. When network demand is high, a block may burn more ETN than it mints; therefore, block rewards alone cannot determine the net change in quantity over a period.

Question 5

Why is the base Gas fee burned?

Accepted Answer

Burning the base Gas fee reduces the ETN that remains in circulation after that portion of the fee is paid, and can reduce block producers’ incentive to manipulate the base fee: if producers received the base fee directly, they could distort the fee market through self-generated transactions or off-chain rebates. Burning does not mean fees are zero. Users still need to provide ETN for transactions, and the ultimate cost depends on the computation required for execution and network demand. The amount burned and block rewards jointly determine the result of “newly issued minus burned” during a period, but neither alone can predict ETN’s market price.

Question 6

What is the relationship between gwei, wei, and ETN?

Accepted Answer

gwei and wei are both smaller units of ETN. 1 gwei = 10^-9 ETN, or 0.000000001 ETN; 1 wei = 10^-18 ETN and is the smallest unit of ETN. Gas costs are often expressed in gwei for readability, while a transaction’s value field and many technical calculations are often denominated in wei. Unit conversion changes only the representation, not the actual amount of ETN transferred.

Question 7

How can ETN be used besides paying network fees?

Accepted Answer

In addition to paying Gas, ETN can be used in supporting applications as collateral in lending markets, a unit of account in NFT markets, and a payment method for services or real-world goods. Whether it can be used depends on whether the specific application integrates ETN, rather than being determined automatically by the ETN-SC protocol alone. When ETN is transferred to a smart contract address, that ETN can also be used to pay Gas when the contract executes code. Here, the asset’s use is determined by the contract code and call conditions; users should distinguish an ordinary transfer to an address from a transaction sent to a contract that triggers code execution.

Question 8

Does holding ETN represent an ownership interest in the project company?

Accepted Answer

No. ETN is a fungible crypto asset, not equity in an Electroneum-related company; holding ETN does not represent an ownership interest in a company or create a fixed right to repayment or future profit sharing. Therefore, the network asset’s use cases, on-chain fee mechanism, or application integrations cannot be interpreted as a company promise of dividends or repayment to holders. The rights boundaries used to assess ETN’s on-chain functions and to assess corporate equity are different.

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