With the Namada mainnet launch coming soon, we decided to take a deeper look into the network and explore its economics in the context of Chainflow.

What is Namada

Namada is a Proof-of-Stake (PoS) Layer 1 that focuses on shielded asset transfers and interchain asset-agnostic data protection. In simple terms, this means that Namada is a blockchain designed to prioritize privacy and enable private transactions of fungible tokens and NFTs across any chain, including Ethereum.  

The network offers a number of benefits like shielded transfers through novel zk-SNARKS, fast ZKP generation, low transaction latency and near-zero fees, a trustless Ethereum bridge and IBC compatibility, and data protection as public good. 

Namada’s PoS mechanism

The PoS mechanism Namada uses is called Cubic Proof-of-Stake (CPoS). It enables validators and delegators to benefit from an upgraded version of the F1 fee distribution mechanism, cubic slashing that encourages validators that operate multiple nodes to deploy more diverse and uncorrelated setups; improved PoS guarantees, transaction fees payable in multiple assets, etc. 

The CPoS mechanism offers several advantages: 

• Improved security: it promotes network security and diversity among validators. Unlike some PoS mechanisms that may lead to uniform validator setups, CPoS discourages uniformity. This makes Namada more resilient to common vulnerabilities and enhances the overall security of the network.
• Incentivized participation: The CPoS system incentivizes participation from both validators and delegators through rewards, encouraging active engagement in securing the network.  
• Fair distribution of rewards: Unlike traditional PoS systems where the distribution of rewards may favor larger stakeholders, CPOS ensures a fairer distribution of rewards. By incorporating cubic elements into the reward calculation, Namada prevents the concentration of power among a few participants, promoting decentralization and inclusivity.
• Auto-compounding rewards: Automatically compounded rewards make Namada more efficient in processing PoS state changes and improves the delegators’ UX. 

Public Goods Funding 

At least 10% of inflation will be allocated to Public Goods Funding by a set of governance elected stewards through:

• Continuous Funding, distributed per epoch basis for a quarter
• Retroactive Funding

PGF acts as an incentive mechanism for further contributions, while also increasing Equitability in society. The projects funded must be those that would otherwise have a hard time getting funding and are EV+ for the collective whole. 

Namada’s ethos: Maximizing the collective interest

Namada's positive sum economics is designed to create a blockchain ecosystem where all participants, including users, validators, delegators, and HODLers, can benefit collectively. 

This approach is rooted in a cybernetic, feedback-driven model that emphasizes privacy, low transaction fees, and a community-focused culture. By aligning the interests of all stakeholders through its tokenomics and incentivization mechanisms, Namada aims to foster a decentralized, fair, inclusive, and equitable environment. 

This economic model not only supports sustainable growth and long-term value creation but also ensures that the benefits of the blockchain are accessible and distributed equitably among all users, contributing to a more balanced and just digital economy.

Namada's positive sum economics and Chainflow's core values—decentralization, fairness, inclusivity, and equitability—share a profound alignment in their approach to building and sustaining blockchain ecosystems. Let's explore how these concepts interconnect.

Decentralization

Namada: Emphasizes a decentralized economic model through its Layer-1 blockchain, which is designed to protect privacy and ensure that all participants can benefit from the system. Its cybernetic, feedback-driven design aims to adapt and optimize system performance in a decentralized manner, serving the community's collective interests.

Chainflow: As a decentralized network infrastructure provider, we at Chainflow inherently value the decentralization of blockchain networks. This aligns with Namada's efforts to maintain a system where decisions and benefits are distributed across the network, rather than centralized in the hands of a few.

Fairness

Namada: Implements an economic model that seeks to align the interests of all stakeholders, including users, validators, delegators, and HODLers. This approach is inherently fair, as it ensures that the system's benefits are accessible to all participants, regardless of their role or investment size.

Chainflow: We believe in the principle that everyone should play by the same rules, no matter their size. This principle is echoed in Namada's design, which aims to provide an equitable platform where the rules are transparent and apply equally to all, ensuring fairness across the ecosystem.

Inclusivity

Namada: By focusing on low transaction fees and privacy, Namada makes it easier for a broader audience to participate in the blockchain space. This inclusivity ensures that more people can access and benefit from the technology, regardless of their geographical location or economic status.

Chainflow: We value inclusivity by supporting a network infrastructure that enables wide participation. Namada's approach to lowering barriers to entry and protecting user privacy directly supports our goal of creating an inclusive environment where everyone can contribute and benefit.

Equitability

Namada: The positive sum economics model is designed to maximize the collective interest, which inherently includes a focus on equitability. By ensuring that the system rewards all participants fairly and equitably, Namada promotes a balanced ecosystem where success and resources are shared.

Chainflow: We holds the core value that everyone should be able to participate in shared work and success, regardless of their resources. Namada's economic model, which seeks to distribute rewards in a manner that is equitable for all stakeholders, mirrors this value by creating a platform where the wealth generated within the ecosystem is accessible to everyone.

The sustainable growth and long-term value creation emphasized by Namada's economic model reflect a commitment to fairness and equitability over time. Chainflow's focus on the long-term viability of the networks it supports ensures that the benefits of blockchain technology are distributed fairly among all participants, promoting a balanced and just ecosystem.

Namada & Chainflow: a shared vision

In summary, Namada's positive sum economics and Chainflow's core values both envision a blockchain ecosystem that is decentralized, fair, inclusive, and equitable. 

Our approaches ensure that the benefits of blockchain technology are not only widely accessible but also distributed in a manner that aligns with the principles of a just and balanced digital future. 

This shared vision underscores the potential for collaborative efforts between platforms like Namada and infrastructure providers like Chainflow to foster a blockchain environment that truly benefits all participants.