Economics

Namada users pay transaction fees in NAM and other tokens (see fee system and governance), so demand for NAM can be expected to track demand for block space. On the supply side, the protocol mints NAM at a fixed maximum per-annum rate based on a fraction of the current supply (see inflation system), which is directed to three areas of protocol subsidy: proof-of-stake, shielded pool incentives, and public-goods funding. Inflation rates for these three areas are adjusted independently (the first two on PD controllers and the third based on funding decisions) and excess tokens are slowly burned.