Question 1

What is SHM?

Accepted Answer

SHM is Shardeum's native utility token. Shardeum is an EVM-compatible Layer 1 network; users use SHM to pay gas fees for on-chain transactions and smart contract execution, and network participants can also use it for staking. SHM therefore connects network usage costs, node security, and the token economic model. “EVM-compatible” means contracts and development tools intended for the Ethereum Virtual Machine can be used subject to the relevant compatibility conditions, but it does not mean that Shardeum and Ethereum share the same chain, fees, or security model.

Question 2

What is SHM used for?

Accepted Answer

SHM's core uses are paying gas fees and participating in staking. When sending assets or calling a smart contract, the initiator pays in SHM for the fees required for network processing and computation; users who want to participate in network security can delegate SHM to validators, or run and stake a node themselves if they meet the network rules. The two uses apply to different situations: gas fees are the cost of each on-chain operation, while staking provides economic participation for validation services. Whether rewards can be earned, the actual reward amount, and the specific conditions for delegation depend on network rules, node status, and the selected service arrangement; simply holding SHM should not be regarded as fixed income.

Question 3

How do SHM gas fees work?

Accepted Answer

Transactions or smart contract execution on Shardeum require SHM to pay gas fees. Fees reflect the resources the network consumes to process transactions and computation; a simple transfer and a contract call involving more computational steps may require different costs. In the token economics described in the whitepaper, all transaction fees are burned. This means fees paid by users do not simply remain in a fixed fee pool: after payment, the fees leave the circulating supply. The final amount paid still depends on the resources required by the transaction and the network's fee conditions at the time; the cost of a transaction cannot be inferred from “burning” alone.

Question 4

Can holding SHM be used to participate in staking?

Accepted Answer

Yes. Holders can delegate SHM to validators or run and stake nodes themselves to participate in network security. Delegation enables holders who do not personally operate validator nodes to participate in staking; running a node also requires taking responsibility for node operation and complying with network rules. Staking rewards are not generated automatically and continuously simply by locking tokens. Validator nodes must enter the active validator set and properly perform their duties; the whitepaper states that entering the active set from the standby pool involves randomness, so even a normally operating node may not receive rewards during certain periods.

Question 5

Why does the SHM supply change?

Accepted Answer

SHM is not a fixed-supply token. One side of its model is dynamic issuance for validator rewards, while the other is the burning of all transaction fees; during a given period, their relative sizes determine whether supply increases net, decreases net, or is close to balanced. Therefore, SHM's long-term circulating changes cannot be judged from the initial supply alone. Network activity affects the amount of fees burned, while issuance for validator rewards adjusts with network demand; both are necessary to understand supply changes.

Question 6

Why is SHM's initial supply approximately 59.76 billion tokens?

Accepted Answer

Following the denomination adjustment, SHM's initial supply was approximately 59.76 billion tokens. The official FAQ states that the adjustment was made in 2025 at 1:240: each unit of the original token corresponded to 240 post-adjustment units, with allocation proportions unchanged. This type of denomination adjustment changes the unit of account and the representation of token quantities; it does not create a larger relative share for any holder out of thin air, nor should it be confused with subsequent dynamic issuance. When understanding supply, the initial denomination adjustment, reward issuance, and transaction fee burning should be considered separately.

Question 7

How is SHM's initial allocation structured?

Accepted Answer

Based on the post-denomination-adjustment initial allocation, SHM sales account for 36.72%, the team accounts for 30.6%, the foundation accounts for 22.44%, and the ecosystem and airdrop account for 10.23%. These figures describe the proportional arrangement of initial tokens across different categories. Initial allocation is not the same as circulating supply at a given point in time, nor does it directly indicate the tradable amount in each category. The actual available supply is also affected by that category's release arrangements, holder behavior, subsequent reward issuance, and transaction fee burning; the materials do not provide complete release parameters applicable to the current version here.

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