NEM ecosystem and fees


Hello everybody.

This is my very first post on NEM official forum. I did write the same post on reddit and someone proposed me to copy the same content here to see if i can have any documented answer. So here is the post :

It looks like the NEM community is great, i’m sure i will get interesting answers. As english is not my mother tongue, i will probably make many mistakes and i’m sorry about it…

I’d like to introduce myself talking about how i got into cryptocurrencies and why, as an average internet user, i thought it would be useful. I somehow can represent the main target of tomorrow’s market, the “mass of individuals” with no particular technical knowledge.

I started to buy cryptocurrencies in 2017, before the “crazy market” we all knew at the end of the year. I first bought some Dogecoins before i understand it was mainly a community coin which didn’t have a real daily life or business usage plan (i don’t want to hurt their community but from here it’s what it looks like). I decided to learn the basics about cryptocurrencies and blockchain to be able to make the right choice. I wasn’t able to get the maths but i got how it works roughly. I was looking for THE cryptocurrency, the one which will be much better than others, the one which might be used by anyone for many kind of purpose. The one which is eco-friendly, easy to use and with a promising future.

I spent a lot of time on coinmarketcap and checked first 250 cryptos to understand what is different, better or worse in one or another. Then i started to invest in Burstcoin. It is eco-friendly, minable by anybody with a hard disk, provide smart contracts and had a plan for future improvements. But the best members of the team behind just left and it’s not clear what is going to happen. They hid they were doing dual mining on their pool with a copy of Bitcoin using proof-of-capacity (it hurts when you trust…). I eventually understood that the most important in cryptocurrencies is the team, the trust and real life usage.

I was disappointed and wanted to quit the crypto market until i look in detail at NEM. It is centered on real life usage, it is user friendly with an easy to use interface, its POI is sustainable and it has many great features and great projects.

I really like this crypto but there is something i think could be improved, tell me if i’m wrong : the fees.

I’m not the first one to point out this problem : it costs several NEM to make a transaction or to do anything like create a mosaic.

It is the way it should be, right ? I mean, there must be some money to give to those who are securing the network.

I thought it had to be this way until i see Skycoin project (i heard NEO is doing something similar) : there are two currencies. The main one is the coin itself. The second one is naturally created when you own some coin : each hour you get 1 coin hour for each Skycoin you keep in the wallet. To avoid the inflation of the “coin hour” the network burns half of the coin hours you have when you make a Skycoin transaction and the coin hour allow you to operate everything on the network. You don’t pay any Skycoin to make a transaction, you “burn” half of your coin hours. That’s all. Completely free.

I think it’s a great idea as it doesn’t really cost anything to make a transaction. Burn half of coin hours also prevent spam on the network. Coin hours have a value (like NEO gas) and they are sold on market exchanges.

I know the main NEM target is companies. They have money, they were about paying to get the same services if they were centralized. NEM allow them to drastically lower the fees to have a much more secure database, it’s already very good compared to what they would have without the blockchain.

But i think that the future of cryptocurrency must include both individuals and companies. As for individuals, since most centralized banking transactions are free of charge today, why would people pay to get this kind of service ? I’m a crypto enthousiast and i care about decentralization, but do you really think that most of people do ?

Bitcoin make people think they got the digital gold because of scarcity so they accept to pay miners fees. It is different when you bring a coin which is made really to be used as is to operate different kind of things.

What do you think about it ? Could something like “coin hours” be implemented on NEM ? Sorry if i’m asking a stupid question…

Thanks in advance.

Edit : i got some answers on telegram, but i think it’s interesting to get new answers as it can bring new point of view of what fees should be and how to pay them.


Technical Discussion?
Please summarize the main points.


Is is possible to change the fees system so we don’t pay using NEM but another kind of coin created by owning XEM ? Just like NEO Gas. Only nodes with 10 000 XEM or more can earn more XEM harvesting, i understand this may be related to security but this “barrier” centralise the money into the wealthy people’s hands.

If you create a second coin by “staking” the first, you allow everybody to pay the fees without using the currency you paid for. As the second “currency” can be “burnt” when you use a service, you avoid the spam but people feel like they didn’t spend their own money on it.

As it seems to be idealistic but promised by other coins, i wanted to know if it was possible and economically a good choice. I think i didn’t make a mistake to ask such a thing here as it requires to technically completely change the way XEM are distributed and rethink the whole ecosystem.


Short answer is that NEM has a better solution. You want transactions to be free, but you are looking at it not from a user’s perspective, but from an “investors” perspective. For an end user to use the NEO blockchain for free (assuming that they ever move away from the federated model), they would have to purchase and hold NEO to get free gas. This adds an extra step for any user to get on the chain. NEM Catapult will allow for companies developing on NEM to pay the tx fee’s for their users by using “aggregate bonded transactions”. Users would never have to even know that there is a token, they just use the blockchain based service that the app or company is providing. The added benefit of this for the public blockchain is that it will create an economic incentive at the design phase to put as few transactions on chain as possible. If you have free transactions, spam aside, you will have many more transactions per block necessitating a much more centralized system of nodes.


Interesting. It seems that i have to think differently to get how a blockchain could be used by end user.

I just thought about the price of a mosaic rent 100 xem per year and i find it a little bit expensive in a bull market. As we are in a deep bear market, it doesn’t really matter but do you think the rental price will be modified if the market goes better ? Who decide such a thing ? Can it be automaticaly calculated by the network ?


I agree with re-structuring the fee system in NEM. I believe NEM should separate their systems for dedicated parties like food services, e-commerce, etc so that fees only apply to specific parts/operations instead of the whole infrastructure of NEM. If I open up a faucet using our token under NEM, I (or the customer, using catapult) will have to pay fiat/or NEM in order to release funds per transaction. I believe a better solution for that is (like what Nationapub said) take fee’s from the mosaic for each transaction.


wait a minute, so with catapult … if the users can pay for fees in USD in exchange of NEM can they use any other coins like btc & eth to convert to NEM for fee’s as well?


I think this is a very interesting idea to explore further on.

We could have nodes that run as community servers, that would harvest fees from any mosaic transacted, and other federated nodes with higher stakes (aka higher chance of harvesting the next block/faster processing speed) that will harvest only if the transaction contains a filtered list of mosaics. It will be interesting to see how the market plays out with different tiers of mosaics for different processing speed.

*Edit to add some ideas


Absolutely! that’s a brilliant idea as well.


THat would mean that I could create a mosaic with ten billion supply and a a 1/1000 tx fee and spam to the network for years with just a few xem to create the namespace. This makes no sense.

I think this convo is a little bit out of place. The core developers are making decisions based on their consultations and years of experience. It’s pretty unlikely that randoms on the forum are suddenly going to crack it and force the devs to change the whole design of the new chain.


Need to wait and see with catapult. This is a issue, not just that but fixed transaction fees will become a problem too.


at the end of the day, theres actual businesses out there (like my business) that’s serious about building on the nem blockchain and sees where the fee structure is can be a problem. I already found a solution, I just felt like I should express the road block I encountered and a possible future solution as an (serious company) built on the blockchain.

I believe if your mosaic is worth 0.0002 and nem is worth 0.0002 using catapult to convert your own crypto into nem to pay for fees make senses because there both worth the same. Maybe you see something different but I think nem should re-structure the fee structure for companies with tokens that have worth who can actually benefit the ecosystem which can be determined by an application or voting system in NEM.

Please keep in my mind that this is an open forum for all nem adopters


The process for submitting improvements is here.

Discussion on core development and specifications should be done here.


maybe check the current catapult fee system. Fees primarily depend on the transaction size and on a multiplier set by the node. (–> Mosaics won’t cost 100XEM)
effective_fee = transaction::size * block::fee_multiplier

I think it could be interesting to allow nodes accepting other mosaics as well at some point because it should be as easy as possible to use the NEM blockchain and all complexity (holding 2+coins) hinders adoption.


Yep, you are right it’s a free forum.

What you are suggesting is also enabled by aggregate transactions.


If other coins give you sollution, why do you support NEM in that case?


Let me make a comparison which i think has some relevancy.

You like a country, you decide to stay and live in.
One day, you go abroad and see new ideas and new way of thinking.
You are wondering if the same way of doing something would be good or not for the community who is living in “your” country.
You come back and ask your countrymen about these ideas. You just ask and if someone explain to you it’s not possible here and why, you are ok. But maybe just the process to add something new will enlarge your countrymen’s horizon and allow a better tomorrow.

I didn’t say that other coin consensus or ecosystem is better than NEM. If i did so, i would’nt waste my time here. I’m here because i believe in NEM, in the projects around, in the community, in the structure. I lack of technical knowledge and i can see now that when you move a problem from somewhere to somewhere else, it is still a problem, but the way you introduce it to investors is different so you may convince them to bring more money. More money means more users, and so on.

It is a tough time for NEM. When you look at NEM potential, it should be ahead of NEO or Ethereum. Am i a betrayor if i decide to look at what other coin developpers are doing so they attract more investors ?