NKN is the native cryptocurrency of the New Kind of Network (NKN), an open-source, peer-to-peer network that allows internet users to share a network connection and bandwidth in exchange for rewards paid in NKN.
The NKN token is an ERC-20 utility token that serves as an incentive and payment system for services on the network. The token was released in an initial coin offering in April 2018, with an initial supply of 1 billion NKN. Thirty-five percent of NKN tokens were made available during the launch, with ICO participants able to purchase 4,150 NKN for 1 ETH. Additionally, 17% of the token supply was reserved for the NKN Foundation in order to make strategic investments in building the NKN ecosystem. Eighteen percent of the token supply was distributed to the founding team and community developers.
The remaining 30% of the tokens were reserved for mining rewards. NKN token miners are rewarded for duties called “traffic relay” and “block maintenance.” In the first year after NKN was released, NKN produced 18 million NKN tokens in mining rewards. The mining rewards system follows a deflationary pattern, decreasing rewards by 500,000 annually for 25 years.
NKN reached its all-time high of $1.48 in April 2021 following the project’s announcement that NKN would be listed on the Binance exchange. In addition to offering support for NKN, Binance offered a 30% annual percentage yield (APY) for staking NKN tokens on the platform. Daily transactions on the network hit 729 after the listing, up from a daily average of 20 to 30 before.
The token hit its all-time low of $0.006411 in March 2020, coinciding with a massive drop in the crypto market that saw bitcoin lose 50% of its value in two days.
How does NKN work?
The New Kind of Network (NKN) white paper states that the blockchain network is designed to revolutionize technology by becoming the Uber or Airbnb of the communication service business without a centralized entity. NKN seeks to create a shared, open network that is always available and can dynamically scale.
To do so, the NKN system enables users to run nodes by downloading the NKN program on their devices. Once the program is downloaded, users can mine, or earn, NKN tokens by running a program node and participating in the network. NKN uses a “proof-of-relay” (PoR) mining algorithm to randomly select a small number of fixed data packets as “proof” before sending that data to other nodes for payments and rewards.
NKN uses the available bandwidth and internet connection of the node’s device to provide internet communication access for others. In order to gain access to the network, network users pay NKN to the network for the bandwidth they use. The fees are then received by the node operators, or miners, who can sell their NKN tokens through exchanges to future network users.
Today, NKN powers several projects using this decentralized network technology. For example, nMobile is a decentralized messaging service that uses the NKN network to create an encrypted, private messaging system. NKN’s nConnect offers a remote access system for computers that connects users to remote desktops or file systems from multiple devices.
Key events and management
NKN was founded by Yanbo Li, Yilun Zhang and Zheng Li in January 2018 as a way to decentralize the delivery of digital content. Previously, the three worked in big tech companies like Google, Nokia and Qualcomm. The founders were inspired by Stephen Wolfram’s book “A New Kind of Science.” Following the launch of the NKN public test network, “Koala,” Wolfram joined NKN in December 2018 as a technical adviser on the project.
NKN released its public mainnet, NKN v1.0 Narwhal, in late June 2019, just over a year after the token’s initial launch. Current token holders still include original ICO participants and venture capital firms, including Fenbushi Capital, Arrington XRP Capital, BlockVC and Okex Capital.
NKN has secured several partnerships. In March 2020, NKN formed a partnership with China Mobile, the largest mobile carrier in the world, to work on projects ahead of the launch of 5G. Less than a month later, video-streaming platform iQiyi, which is owned by Chinese tech company Baidu, partnered with NKN to boost the platform’s speed and reduce its energy consumption.
In October 2020, NKN announced that it had won a commercial contract with Synology China to further develop its nConnect product.