Midnight Network Is Trying a Bizarre Economic System: A Token of Power, a Token of Usage

A majority of blockchains have a straightforward rule. One network. One token. A single-purpose asset. It secures the network. It pays transaction fees. It is the hypothetical commodity that people make transactions. But @MidnightNetwork is trying out a very different concept. Midnight divides the system in two instead of a single token performing all of the tasks. Power in the network is one representation. The other is the capability of using it in reality. This initially is unsoundly complex. However, the concept of it is quite practical. The primary key of the system is named $NIGHT . This is what people possess, trade and govern themselves. It ensures the network is secure, enables one to vote and is the economic engine of the ecosystem. And here is where Midnight does something weird. NIGHT does not exist when users communicate with the network. Rather, the automatic creation of a second resource (DUST) is generated when $NIGHT is held. The network is actually powered by DUST. It is reused to make transactions as well as execute smart contracts. Each time a person communicates with Midnight, it burns DUST instead of the primary token. Imagine that it is a power station. NIGHT symbolizes possession of power plant. The electricity it generates is called DUST. You do not torch the power plant to power your house. You spend the energy that it produces. The same reasoning is used by Midnight to apply to blockchain economics. Constant production of NIGHT generates DUST that is used by the users when they are interacting with the network. The longer the night one has, the higher the amount of dust capacity that one produces in the long run. This division forms an alternative form of economy. The majority of the blockchains make people to continuously use their tokens to pay transaction fees. It refers to investment and fuel being one and the same. The more one does, the more he or she has to purchase to continue functioning. Midnight attempts to eliminate this pressure. The capital stock remains undepleted and the working fuel replenishes itself. This in theory would have resulted in a system where the developers and applications are able to forecast how much it would cost to run more easily. They do not have to be concerned with the changing gas prices but on the DUST produced by their NIGHT holdings. Another interesting side effect is present. Since DUST is created by NIGHT and utilized internally, it is not created to be a freely traded token. It is more of a network resource than it is a speculative asset. In that design, speculation and real use are to be separated. It is yet to be determined whether or not this model will be long-term effective. Experiments in token economics are not new to crypto history and most of them failed. But Midnight is experimenting with one of the most widely accepted blockchain design assumptions. Perhaps a token should not accomplish everything. Perhaps networks are effective when the ownership is different and the use is different. In case such a concept turns out to be effective, the Midnight weird two-layer economy may shape the way other blockchain implementations draw up their tokens. #night