A brief history
NEM was created by a Singapore-based non-profit organization called the NEM Foundation in March 2015 as a fork from the NXT platform, another popular blockchain-based virtual currency. The goal of NEM is to become a platform that can support everything from custom tokens to supply chain tracking protocols. NEM refers to this as its Smart Asset System (SAS). With SAS anyone can use NEM to create a token, publish data to the blockchain, create custom infrastructure, or set up multi-signature security systems. Additionally, NEM uses a unique consensus mechanism called Proof-of-Importance (PoI). NEM’s PoI mechanism gives more importance to how much one is invested into the NEM system. To vote to approve transactions on the NEM blockchain, an investor must hold at least 10,000 XEM which they must hold for a certain amount of time. Each day that an investor holds XEM, 10% of their XEM becomes “vested.” Once the vested amount exceeds 10,000 XEM, the investor can start harvesting/mining. When it comes to validating a block, the PoI system rewards network participation. The more that a harvester uses the network, the greater the chance they’ll be selected to validate a block.
XEM in practice
XEM is the native utility token of the NEM blockchain which serves multiple vital roles in the ecosystem. Users vest XEM to gain voting rights and block approval rights. XEM is also used to pay harvesters for validating transactions. There are two ways for users to participate in harvesting. Normal harvesting on regular nodes requires users to hold at least 10,000 XEM for a certain amount of time. Additionally, there are high-performance super nodes that can receive larger rewards. To become a super node, a user must meet the minimum system requirements of holding at least 3 million XEM. In addition to the transaction fees, 140,000 XEM is divided among super nodes every day.
