Incentivising privacy: meet Prof Aggelos Kiayias, veteran cryptographer, cryptoeconomist and Nym…

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Founding member of the Nym advisory board and veteran cryptographer Aggelos Kiayias will be joining Nym for a special Twitter Spaces session at 5PM CET on 20 July, where he will be available to discuss the Nym mixnet, Nym token economics, and the future of crypto and the private internet.

Prof Aggelos Kiayias is a key figure in Web3, contributing scientific advancements to the industry since the very beginning. The crypto community might best know Aggelos for the proof-of-stake consensus algorithm Ouroboros, named for the auto-cannibalising tail-devouring reptile from antiquity, first released in 2017 and created with an ultra-low energy, sustainable footprint in mind, and deployed in the Cardano and Polkadot protocols.

Aggelos Kiayias is also one of the brains behind the Nym token economics. Working with Nym Chief Scientist Claudia Diaz and CEO Harry Halpin, they developed the incentive model designed to scale and sustain privacy as a global public good. The mixnet reward-sharing scheme incentivises node operators and other contributors to Nym, enabling a sustainable business model and helping the network to scale according to demand. The motivation is nothing less than to transform the economic logic at the core of the internet: from incentivising surveillance in the data economy to instead incentivise privacy through token economics.

“Crypto” — where cybersecurity and economics meet

The word “crypto” used to be short for “cryptography” and was primarily the concern of cyber security experts and computer scientists. Cryptographic techniques were popularised with the invention of Bitcoin, transforming the short-hand to also refer to cryptocurrencies and the manifold world of tokens. The early intention of this adoption of cryptography into economics, and economics into the world of computer science, was to secure decentralisation and enable scale. While decentralisation and scale continue to be core values, security and in particular privacy has become a major problem.

As Edward Snowden said when the Nym mainnet was switched on in 2022, privacy in the cryptocurrency space, especially in Bitcoin, remains an “open disaster”. And a large part of the problem is the network layer: the very issue Nym is fixing and where Kiayias helped to develop the incentives to keep the Nym mixnet operational and contributors rewarded.

Aggelos is a key figure contributing to the original core aims and ambitions of crypto, namely to mobilise economic theories to serve the needs of cybersecurity in decentralised systems — not least as director of the recently established Blockchain Technology Laboratory at Edinburgh University. Not only a hands-on advisor to Nym, Aggelos is also Chief Scientist at IOHK and chair in Cyber Security and Privacy at the University of Edinburgh. In this sense, he brings the true meanings of the word ‘crypto’ together: crypto as in ‘currency’ as well as in ‘cryptography,’ as a means to secure decentralised infrastructure and the privacy of people using them.

The network topology of Nym itself is organised through the token economics of the system, by mix node operators ‘bonding’ their mix node by staking NYM tokens. These bonded tokens, combined with the stake that other people might delegate, determines a mix node’s reputation. In this sense, the token economics of Nym underpins the decentralisation of the system, while also ensuring it can scale according to demand.

The early Nym testnets Finney and Milhon in 2020 and 2021 trialled these token economic innovations, with the mainnet finally going live in early 2022. Kiayias, Diaz, and Halpin published their ‘Reward Sharing In Mixnets’ paper in 2022, detailing a system to incentivise mixnet node operators and reward them for their contributions with the NYM utility token, in exchange for their bandwidth and maintaining a good reputation. Ultimately, this system rewards those providing a quality service with good mixes, and keeps the Nym mixnet operational in an economically self-sustaining way. Today, there are tens of thousands of contributors to the Nym ecosystem, using this mechanism by bonding their mixnodes or staking on other people’s nodes.

Aggelos Kiayias continues to work closely with Claudia Diaz in optimising the token economics of the Nym mixnet. They are currently working on decentralised measurements in the mixnet. This will facilitate a decentralised and more accurate measurement of mix node performance, which in turn can help to optimise the mixnet and ensure more fair reputation, selection and rewards processes.

Kiayias is deeply knowledgeable with over 100 publications in journals and conference proceedings. He has received research grants from a wide variety of international bodies including the EU’s Horizon 2020 programme, and Panoramix where he worked alongside Harry Halpin and Claudia Diaz among other esteemed partners.

Join Nym and Aggelos Kiayias on Twitter Spaces at 5PM CET where he will be available to answer questions, including:

• What is the difference between Ouroboros and Nym token economics?
• Why did he start working on Nym?
• What is he working on with Claudia now?
• How can token economics drive privacy?
• How does the Nym token economics support decentralisation?
• What are the main factors that affect APY of mix node operators and stakers?
• How will the Nym mixnet deal with price volatility of the NYM token?
• What major technical developments in crypto is he excited about?
• What are some of the biggest challenges in crypto and how can we solve them?

Join the conversation on Twitter Spaces at 5PM CET.

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