Improved Nym node reward scheme

Nym gateway nodes to gain rewards in new incentive system

Author: Nym

June 4, 20248 mins read

Nym gateway nodes to gain rewards in new incentive system

The Nym network is powered by a decentralized community of node operators, and Nym is working closely with them to fairly reward their work.

Languages: 中文 // Türkçe // 日本 // Française // Bahasa Indonesia // українська мова // Español // Português // Tiếng Việt

The advantage of a decentralized model for privacy is clear: a multi-hop network through independent, globally dispersed, and unlinkable servers. The challenge of decentralization, however, is how to ensure that a diverse network of operators will perform well with high traffic levels and paying customers. This is where node incentives come into play.

Nym nodes are rewarded for providing privacy, but also in proportion to their role, performance, and reputation. The network has five layers of nodes: entry gateways, three layers of mix nodes, and exit gateways. In the current network setup, only mix nodes have been rewarded from the mixmining pool, with gateways instead receiving temporary service grants. An improved reward scheme means that nodes serving all five layers will be included in the reward set.

Below are some of the major developments that have happened in the past month which improve the performance, capacity, and sustainability of the mixnet. This includes network performance tests, the first operator town hall, the very first community vote, a new Delegations Program, and a new and improved rewards scheme for nodes. This is all in lock-step with the roll-out of the NymVPN app which will be the first commercial application to run on the Nym privacy platform.

What makes a decentralized privacy infrastructure so unique? Spoiler: it’s the strength of community.

New heights in network performance

The Nym network is possible because independent operators run Nym nodes: they are supply side providing users worldwide with genuine privacy online. And Nym nodes have recently been gearing up to service a real demand: Nym’s very own NymVPN app, which will soon be the first commercial product to run on the Nym mixnet and test its strengths.

The Nym operator community is collaborating closely with the Nym core team to ensure that the quality of network service is up to scratch. In the months leading up to the start of the NymVPN alpha testing phase, Nym has been regularly organizing a series of “Fast & Furious” tests to pump high volumes of traffic through the network. In the process, nodes have helped Nym learn a lot about what the network can do.

The good news? The network didn’t even break a sweat. The bad news? We didn’t hit the upper limit, so it is still not clear just how much traffic the Nym network can withstand. To help us pump even more load into the network, we may need to call upon the Nym community to help us DoS or DDoS our operators. Keep an eye out for an upcoming date to discover the limits of network capacity!

Meanwhile, the Nym R&D team is continuing work on measuring and improving the number of clients that nodes can service. Recent measurements show a doubling of capacity when using an upcoming new packet format, but more on that soon!

Delegations Program for new node operators

Operators compete on performance, reputation, and (soon) location to attract traffic to their nodes and be rewarded for their work. But competition has its limits, and it is sometimes necessary to nudge specific behaviors and the overall network towards a more egalitarian and pragmatic distribution of resources.

The new Nym Delegations Program serves just this purpose. It is designed to bootstrap new, high quality nodes by delegating NYM stake from the company treasury. This enables high performing and geographically needed nodes to be included in the “active set” and have a chance to get rewarded for their work.

Anyone can run a Nym node in principle. But in order to be included in the “active set” and actually route and mix traffic, a node needs to perform well and have a good reputation (or stake). The Delegation Program also incentivizes the operator community to set up nodes in required locations, to prioritize certain VPS providers, and to meet specific requirements to ensure the best quality of service for end-users.

Staking rewards from official delegations go to a community treasury, the Squad Wealth Fund, which in turn supports Nym community initiatives. Nym’s rewards system, which is set to be updated, also aims to better incentivize top-performance for Nym nodes..

Gateways to be rewarded

A gateway is a node that permits entry to or an exit from the Nym mixnet. Until now, these nodes have not been part of the Nym rewards system, instead receiving small grants for their work. However, they play a crucial part in enabling quality VPN service, and so rewards are more than warranted.

Incorporating gateways into the rewards system will involve a technical change to how each node is structured inside the network. As per our roadmap, Nym is moving ahead with “smooshing” together the previously separate node binaries into a single node binary called the Nym Node l. Essentially every Nym node will be able to function as an entry gateway, mix node, or exit gateway, depending on how they are set up by their operators. This enables the mixnet not only to randomize all its nodes at every epoch (each hour!), but also to assign node roles based on mixnet users’ demand.

As worldwide coverage and location selection is an important feature for most VPN users, the Nym nodes who opt in for both gateway roles will be able to generate a lot more rewards for their operators. With the Nym VPN around the corner, there has never been a better time to start operating a Nym node.

Updated rewards scheme

To further reward nodes that facilitate higher loads of traffic, and who bear different operator risks, nodes will now be additionally compensated for the quantity of work done and proportionally rewarded for operating gateways.

All nodes perform essential functions in Nym’s 5-layered mixnet. However, since exit and entry gateways are directly exposed to the open internet, they generally bear a higher burden and experience more issues than regular middle-layer mix nodes do. To recognize this difference, exit gateways will receive the higher percentage of a reward per a ticket, followed by entry gateways and mixnodes.

NymVPN has two routing modes: a more private 5-hop mixnet mode, and a faster 2-hop dVPN mode in which data packets are only sent between entry and exit gateways. Depending on whether a node is routing traffic through one or the other, the rewards per ticket will be proportioned differently: for each ticket, five nodes are involved in mixnet traffic compared with the two for the dVPN mode.

These rewards are in addition to the hourly rate for mixmining, and are intended to incentivize nodes to offer high-performance and not simply the act of mixing or routing.

For a breakdown of the new Nym rewards scheme and the math behind it, check out Igor Smirnov’s presentation at the recent town hall (starting at 29:43m). This includes models for Nym rewards broken down in terms of node popularity, whether or not a node is running an entry or exit gateway, and which VPN mode is being serviced. Keep in mind that the figures in the presentation are projective estimates.

Privacy takes a village

The mixnet ecosystem that Nym is building isn’t just any privacy product: it’s a global network of service-providers who believe that only a decentralized infrastructure can provide actual privacy protection for people around the world. In fact, centralized privacy services often pose more risks to users than protections, and in many cases actively violate our privacy. As Nym says, privacy loves company, and it takes a village to safeguard it. Nym is working to incentivize doing so.

Nym is excited to keep working with its community of providers, hearing your feedback and ideas, and further developing the rewards scheme so that the Nym project is both equitable and sustainable. If you’re interested in joining us, learn how to operate a Nym Node. If you’re already on board, check out and contribute to the new community forum.

A lot is coming, so stay tuned!