What is NEM (XEM)?
XEM is the native token of the NEM platform. NEM is considered to be one of the earliest Non-Turing-Complete chains in the crypto world. It provides developers with an environment to build decentralized applications (dApps), Web3 solutions, and other blockchain-based projects.
Unlike some popular blockchains that use novel programming languages, NEM was written entirely in Java. NEM is known for implementing a new type of consensus mechanism, Proof-of-Importance (PoI), which is more energy-efficient. In March 2021, NEM also launched the NEM Symbol public blockchain.
What is the Story of NEM?
NEM is operated by the NEM Foundation, a non-profit organization based in Singapore. However, the identity of who founded NEM is unknown. It aims to provide full decentralization and community-based management.
75% of the entire supply was issued to the stakeholders during the launch. All tokens were distributed evenly to avoid XEM price manipulation and maintain equality between all holders. These measures were also taken to prove the company's dedication to running a decentralized network.
NEM launched in March 2015. At that time, the XEM price was a fraction of a penny, balancing around $0.0003. The asset was not significantly volatile throughout the first several years of its run, with the price not exceeding its fractional value.
The volatility of the asset increased in late 2017, marking the beginning of a new trend. In January 2018, it experienced significant growth, finally passing the threshold of $1, with the NEM price peaking at just over $2.
In December 2021, the NEM blockchain underwent a forking event, leading to the creation of Harlock. This was a community-driven effort to improve the network and its potential for mass adoption. The same year, the network also launched the public blockchain platform NEM Symbol.
What Are the Key Features of NEM?
The maximum supply of NEM coins is capped at 9 billion, meaning that the asset is deflationary. The NEM price is expected to increase as the supply grows more scarce.
The NEM crypto blockchain is dual-layered and supports smart asset development. This means that the network can be used to build layer 2 solutions, including user-defined tokens known as mosaics.
NEM was written using the Java programming language. It was developed to be a Non-Turing-Complete blockchain. This means that it supports basic scripting functionalities for smart contracts and doesn’t support loops, recursions, and non-self-terminating processes.
Non-Turing-Complete blockchains are typically easier to audit and avoid network congestion. This is seen as an advantage over Turing-Complete networks, such as Ethereum, which often experience slow transactions and even risk smart contract exploitations.
The NEM crypto ecosystem has pioneered a unique consensus mechanism known as Proof-of-Importance (PoI). It’s a complex tool that covers a number of criteria to prevent the concentration of wealth that Proof-of-Stake (PoS) networks experience. Due to its mechanics, PoI is more cost-efficient than Proof-of-Work (PoW).
Proof-of-Importance is based on the users’ commitment to NEM. All users are either vested or unvested. Which category you belong to depends on how many tokens you hold. A vested user must have at least 10,000 vested XEMs to start generating new blocks and receive rewards in transaction fees.
The second important part of the PoI system is that actively trading assets grants the vested users a higher trust score. Therefore, if the tokens are actively in circulation, not only does the NEM price value increase, but users also contribute more to the network itself. If a user proves to have contributed to the NEM community, they receive token rewards.
