Question 1

What is NIL?

Accepted Answer

NIL is the utility token of Nillion Network, used to access the decentralized storage and computing infrastructure provided by the network and to participate in the network. It does not represent ownership, equity, or rights to revenue or profit distributions in Nillion, Nillion Association, or any other entity. Holders may use NIL within the functions expressly provided by the protocol: to access network services, participate as validators or delegators, and, after staking, participate in governance related to the network's technology or operations. Token governance is not equivalent to corporate governance rights in the association or any other entity.

Question 2

What is NIL used for in the network?

Accepted Answer

NIL is used to access Nillion's decentralized storage services and supports protocol interactions between users and the network. The network positions itself as infrastructure for permissionless computing and storage, so the token's use concerns service access and protocol participation rather than a claim on the project entity. When users need network services that require NIL, NIL forms part of that service-access model; when participants wish to take part as validators or delegators, they enter a different participation mechanism. The two uses serve different purposes: the former is for using the network, while the latter is for participating in network operations and related coordination.

Question 3

How can holding NIL enable participation in the network?

Accepted Answer

NIL can be used to participate in the network as a validator or delegator. Validators directly undertake the validation work specified by the protocol; delegators delegate NIL to participants, thereby supporting their network participation. Both are forms of protocol participation, not corporate interests that arise automatically merely from holding tokens. NIL governance participation is connected to staking and the Blacklight Staking Mechanism. This governance covers the network's technical and operational decisions; eligibility, available matters, and specific procedures depend on the protocol rules and participation interfaces deployed at the time.

Question 4

How are NIL node rewards generated?

Accepted Answer

Blacklight node rewards come from NIL's annual inflation: the mechanism allocates total annual rewards for all Blacklight nodes equal to 0.5% of supply, or 5 million NIL in aggregate per year. The 0.5% refers to the reward issuance source and annual total, not a separate promise of 0.5% to each node. The amount actually received by a particular node depends on the eligibility, validation work, and allocation rules of the Blacklight mechanism at that time. Therefore, “5 million per year” describes the size of the total reward pool for this category of nodes and cannot be directly converted into a fixed return for an individual node or delegator.

Question 5

Why does NIL appear on Ethereum?

Accepted Answer

NIL's migration from nilChain in the Cosmos ecosystem to an ERC-20 token on Ethereum is part of Nillion's move to an Ethereum architecture. The migration ratio is 1:1: NIL balances on the former nilChain correspond to an equal amount of Ethereum NIL, rather than an additional issuance of a separate asset. Transfers could be made through the IBC bridge while both networks operated; after nilChain stopped, the system exported balances using the chain-stop height or the final snapshot immediately preceding it, created a Merkle tree with Cosmos accounts and allocation amounts as leaves, and published the root on Ethereum. This allows claim eligibility to be verified against the established balance set after the old chain stops.

Question 6

How is unmigrated NIL on the old nilChain handled?

Accepted Answer

After nilChain stops, claiming unmigrated NIL requires proving both the old account's balance eligibility and control over that account. The claimant submits a Merkle inclusion proof to the Ethereum contract and uses the corresponding Cosmos private key to sign the specified Ethereum receiving address and claim parameters. The contract first uses the immutable Merkle root to verify that the balance belongs to the snapshot, then verifies the Cosmos-key signature, and prevents duplicate claims through a one-time claim record such as an index or bitmap; only after verification does it release an equal amount of ERC-20 NIL to the specified Ethereum address. This process allows 1:1 claims after the old chain stops while preventing others from redirecting balances to their own addresses.

Question 7

Does holding NIL mean owning equity in the project?

Accepted Answer

No. NIL is a token for network functionality and participation; it does not grant holders equity, ownership, revenue sharing, profit distributions, or corporate governance rights in Nillion, Nillion Association, or any other entity. NIL holders may participate, within the protocol-defined scope, in governance of the network's technical or operational matters; the object of this protocol governance is network mechanisms, and it does not become shareholder rights in the project entity.

Question 8

How can migrated NIL be distinguished from the old nilChain asset?

Accepted Answer

NIL on Ethereum is an ERC-20 token, and the contract address listed in the official migration guide is 0x7Cf9a80db3B29eE8efE3710AadB7b95270572d47. The old NIL was the native token of nilChain, so there is no old Ethereum contract address. Before transferring, receiving, or interacting, verify that the network and contract address match the official migration guide; during migration, exchanges may independently suspend deposits and withdrawals, with specific timing determined by each platform.

Question 9

Does NIL's transferability guarantee liquidity or service availability?

Accepted Answer

NIL is freely transferable, but transferability does not mean there will always be sufficient liquidity or guaranteed value. The official white paper expressly warns that the token may partially or completely lose value and may not always be transferable or liquid. In addition, if a project fails or stops, a utility token may not be redeemable for the goods or services it purports to provide; therefore, access to network services, node participation, and secondary-market trading are different contexts, and the ability in one must not be treated as a guarantee of another.

Question 10

What does the migration mean for NIL holders and network participation?

Accepted Answer

The migration places NIL in the Ethereum environment to coordinate staking, validation, and node operation around NIL, while the computation handled by Nillion continues to target privacy by default. The change is that the participation and coordination layer moves to Ethereum, rather than repricing old nilChain balances at a different economic ratio. For existing holders, the most important change in asset status is that native balances on the old chain correspond to 1:1 ERC-20 NIL under the migration framework; claims after the chain stops are completed through snapshots, proofs, and signatures rather than relying on the old chain to continue producing blocks.

Question 11

How might network use and migration affect how NIL is understood?

Accepted Answer

NIL's price or tradable supply does not automatically change merely because “the network is used for privacy-preserving computation.” Intermediate factors that may affect market expectations include whether users actually need network services, whether participants need to obtain and lock or delegate NIL, new issuance from node rewards, and whether holders can smoothly use and transfer the ERC-20 version after migration. All of these factors are affected by product adoption, protocol rules, participant behavior, and market liquidity. Service demand or a technology upgrade alone does not equal token purchase demand and does not constitute a price or return commitment.

Question 12

What is the difference between service users, validators, and delegators?

Accepted Answer

Validators directly participate in network validation work; delegators delegate NIL to participants to support network participation. Both differ from users who hold, pay, or transfer NIL solely to use storage or computing services. Therefore, when evaluating a feature, first distinguish whether you are a service user, node participant, or delegator: the required actions, applicable rules, and potential rewards or risks are not the same.

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