In @MidnightNetwork , the token $DUST was created to be used as a fee when applications operate on the network. Simply put, when a transaction is made or when a smart contract runs on Midnight, the system needs a type of “fuel” to process that work. $DUST is the token used for this purpose.
Separating $DUST into its own token helps the system operate more clearly and flexibly. The main token of the network, $NIGHT, has a different role, such as participating in the ecosystem or activities related to the network. Meanwhile, $DUST focuses solely on paying fees for technical activities on the network.
This design also simplifies the use of the Midnight network for users and developers. They can build and run applications without needing to directly use the main token of the ecosystem for every activity.
$DUST exists to serve as the “operational fee” for the Midnight network. It helps transactions and applications running on the network to be processed, while the main token still plays its own role in the ecosystem.
$DUST is what?
$DUST is simply “fuel” for you to use the Midnight network. It is not a coin or token to buy, sell, hold value, or invest in. It is only used to pay transaction fees, execute smart contracts, and do everything on the Midnight network. Without $DUST, you cannot do anything on this chain.
Why did Midnight create its own $DUST?
Because Midnight wants to truly protect privacy. When you transact with $DUST, all sensitive information (who sent, how much, when, to whom) is concealed using zero-knowledge technology. Outsiders looking at the blockchain only see that transactions occur, but do not know the details. At the same time, fees calculated in $DUST help stabilize costs, not directly affected by the price fluctuations of $NIGHT.
$DUST is created how?
You must hold $NIGHT (the main token of Midnight). When holding $NIGHT, you designate a specific address to receive $DUST. From then on, with each new block, the system automatically sends $DUST to that address, proportionate to the amount of $NIGHT you are holding.
- The more $NIGHT you hold -> the faster you receive $DUST.
- There is a maximum limit for each address. When full, it stops generating, if you use some, it will continue to generate again.
- You can let $DUST generate for yourself, or designate it for someone else (for example, a dApp wanting to sponsor fees for users).
What important features does $DUST have?
- Cannot be transferred: You cannot send $DUST to someone else like you would with regular money.
- Does not hold value: No one can buy or trade $DUST. It is merely “fuel” to run the vehicle, not gold to hoard.
- Gradually decreases if not used: If you move $NIGHT elsewhere or disconnect, the $DUST at that address will automatically decrease towards 0 over time. This prevents anyone from hoarding too much.
- When it's used up, it's gone: Each time a transaction fee is paid, $DUST is burned permanently, it does not return.
How are transaction fees calculated?
Fee = network congestion level × transaction weight + minimum fee.
- Minimum fee: to prevent spam.
- Congestion level: increases when the network is busy, decreases when it is quiet -> keeps fees reasonable, not too high when few users.
The goal is for the network to always run at 50% capacity, avoiding congestion or spam attacks.
Quick comparison of $NIGHT and $DUST
- $NIGHT: like a “solar panel” – you hold it, it continuously generates $DUST, can be transferred, used for voting, receiving rewards, and can be traded on exchanges.
- $DUST: like “electricity” from a battery – only used to run the network, cannot be transferred, holds no value, once it's gone, it's gone.
In summary, holding $NIGHT automatically gives you “fuel” to use Midnight without needing to burn $NIGHT or worry about strong price fluctuations. If the dApp is good, they may sponsor $DUST for you, meaning you use the network almost for free. This design helps Midnight protect privacy while being easy to use for businesses and regular users, without falling into the situation of exorbitant fees like many other chains.
If you hold $NIGHT from the Glacier Drop or claim later, just leave it be, the system will automatically generate $DUST for you. When the mainnet goes live, you just need to set up the address to receive $DUST and you're done.
