NEM (XEM): tokenomics, risks and score
An early chain with a proof of importance consensus that weighted both holdings and transaction activity, best known now for the exchange hack that involved it.
What NEM is, and what it does
This is a base blockchain. It runs and secures its own network, and its token is what you pay to use that network and what secures it.
What the XEM token itself does: It can be staked to earn rewards, though a large part of those rewards is newly issued token rather than earned revenue.
Where it runs: NEM. Mechanism: Proof of importance. It has been running since 2015, so roughly 11 years.
The facts
- TICKER
- XEM
- SECTOR
- Layer 1
- CHAIN
- NEM
- LAUNCHED
- 2015, so around 11 years of operating history
- MECHANISM
- Proof of importance
- MAXIMUM SUPPLY
- 8.999 billion
- VALUE CAPTURE
- Staking only
- UPGRADE CONTROL
- Team controlled
- VESTING
- Complete
- LIQUIDITY BAND
- Micro cap. Thin, often a single venue or pool. Treat the quoted price as indicative only.
How the score breaks down
Each dimension is explained on the directory page, and the reasoning behind it is taught in the Academy research process.
Supply and value capture
A hard maximum supply that cannot be raised without the agreement of essentially every participant. Holders can stake to earn rewards, though much of that reward is newly issued rather than earned revenue.
The founding team retains control over upgrades or parameters. Ownership is moderately concentrated. A handful of large holders could move the market.
Where it is strong and where it is not
- Has operated for around 11 years and through at least one full bear market
- Supply is capped, so holders are not diluted indefinitely
- Audited, with published reports
- Fully open source, so the code can be independently reviewed
- Upgrade control sits with a small group, so the rules can change
- Thin liquidity. Check order book depth before assuming you can exit
- Has 1 recorded incident on its history
Incident history
The Coincheck exchange lost roughly 530 million dollars of XEM held in an internet connected wallet without multisignature protection. The failure was the exchange's, not the protocol's.
Our read
The main risk
Effectively dormant ecosystem, and its name remains associated with one of the largest exchange thefts on record.
Before you buy anything
Check the contract address against the project's own documentation rather than a search result or a screener link, since impersonation tokens with identical names and logos are listed constantly. Check the order book depth before assuming you can exit at the quoted price. And write down what would make you wrong before you buy, not after. The Academy thesis module covers why that single habit protects more capital than any indicator.