It’s worth looking at the reward per node in different growth scenarios to understand the sustainability of the model. For the network to be successful, it needs to provide geospatial availability where the demand is, which will widely evolve over the lifetime of the network.
For example, for the asset tracking smart contract, most assets will come from the logistics supply chain, with a high density of smart devices to be tracked in urban areas, in hubs such as commercial harbors, or in controlled environments such as construction sites.
These sites will require a high density of nodes to capture the required data, while other areas will work with a best-effort network. Consumer use cases (such as geolocalized airdrops of NFTs) will not require geospatial incentivization at all. For that reason, in the first phase of the network, the purpose of the rewards will be to incentivize a broad coverage of urban zones, which growing demand will then naturally shape.
With this model in mind, and taking into account a conservative range for a BLE antenna (30 m in urban dense areas, although in rural areas it can go up to 200 m), we want the network to be able to incentivize enough nodes to cover all urban areas on Earth at least once a day. The market will then shape this idealistic target, as all areas are not equal from the standpoint of the demand.
The number of daily active nodes is actually higher than the number of smartphones connected daily to the Nodle network, because statistically, the Nodle SDK will run as several distinct nodes on the same smartphones, in case the smartphone runs several apps embedding the SDK (for example, the Nodle Cash app and another partner app). We estimate the target is then in the vicinity of 300 million smartphones. As a reference, leading mobile advertising networks claim they can reach more than 2 billion smartphones daily.
Scenarios for Network Growth
At any given time, average rewards for edge nodes will depend on the size of the network. For reference, we can highlight three hypothetical scenarios for network growth leading to 300 millions daily active nodes, and project what it means in terms of reward for individual nodes:
- A hypergrowth scenario, in which the network grows too quickly. The risk is to issue all coins before the network is mature enough to generate enough demand to reward the network contributors, in which case the network would be at a risk to recede.
- A target scenario for which we design the issuance. In this target scenario, the network reaches maturity in about 12 years, over the duration of the issuance.
- A worst-case scenario, in which the network grows slowly. The risk is to issue all coins before the network has reached the minimum coverage to sustain demand.
In each scenario, the supply of NODL at each reward event remains fixed (on top of which the Nodle project has reserves to adjust rewards, and demand will also fund edge nodes). Based on the size of the network, the reward per node will vary. Whether these rewards match minimal edge nodes expectations (for example competing with monetization they expect from other mobile monetization options) will depend on the price of the token: