Key Insights
- NYM’s price rebounded in Q4’24, increasing 32% QoQ to $0.10, reversing its previous downward trend. The market cap closed the quarter at $84 million.
- Nym executed a $1 million buyback, repurchasing 10 million NYM ahead of the NymVPN launch. This initiative reduced token oversupply while increasing the company treasury.
- Nym implemented upgrades, introducing equalized reward distribution for node operation across mixnet layers, enabled zk-nym issuance rewards, and a perpetual NYM token buyback mechanism.
- Node operators’ share of total rewards increased to 24%, up from 13% in Q3, following adjustments made in September 2024. These changes introduced a minimum profit margin for operators, aligning incentives toward long-term network reliability.
Primer
Nym (NYM) is an open-source, incentivized, and decentralized physical infrastructure (DePIN) protocol that protects privacy at the network level of any application, wallet, or digital service. As a mixnet, Nym protects against traffic pattern analysis and metadata surveillance. Nym is a tool that facilitates private end-to-end internet communication between users and the web with metadata protections. In addition, Nym is building a proprietary application on top of the mixnet, NymVPN. As such, it is not exclusive to blockchain-related activities. However, the Nym mixnet is closely linked to the NYM token, which runs on the Nyx Cosmos-based appchain to enable permissionless ‘bonding’ of new mix nodes to the Nym network and to pay for mixnet services.
Nym addresses a frequently neglected component of the internet’s technology stack: the transport layer. True privacy is achieved from the bottom up, starting with the transport layer. Both conventional Web 2.0 applications like Telegram and blockchain-related applications such as wallets — and even entire networks — can benefit from Nym’s modular network stack. Unlike other privacy solutions, Nym’s mixnet employs a unique architectural approach that enhances anonymity proportionally with the growth in network participation. For a full primer on Nym, refer to our Initiation of Coverage report.
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Key Metrics
Performance Analysis
Financial Analysis
The NYM utility token serves the following functions for the Nym mixnet and the underlying appchain:
- It grants users access to the Nym mixnet, which provides network layer privacy for transactions and communication.
- Paying the appchain transaction fees.
- Pledging by mix node operators as an initial reputation score to bond their node to the network.
- Rewarding Proof-of-Mixing to mix node operators.
The token and the appchain blockchain serve the economic function of the NYM mixnet, the DePIN protocol responsible for private communication.
This quarter, NYM’s price bounced back up after a steady decline in Q2 and Q3. NYM price increased 32% QoQ from $0.08 to $0.10. The market cap also grew 32% QoQ, closing at $84 million. NYM was initially distributed as a native Cosmos ICS-20 token and an ERC-20 token, which were bridged to Ethereum via Gravity Bridge for Coinlist users. At the end of Q4, the ERC-20 NYM supply stood at 120 million, or 15% of the total 807 million circulating supply.
Ethereum ERC-20 NYM can be bridged to native Cosmos NYM through centralized exchanges such as OKX and bridges such as Gravity Bridge.
Last quarter, Nym Technologies released an NYM Swapper app that allows the exchange of NYM tokens between the native Cosmos-based app chain and Ethereum’s ERC-20 tokens via MetaMask and Keplr wallets. This tool simplifies the bridging process and allows users to easily stake tokens on Nym nodes for rewards and manage delegations across the two blockchain ecosystems.
Rewards
The protocol incentivizes operators (who run Nym Nodes or Nyx validator nodes) and delegators with Nym rewards to bootstrap the network and incentivize security. Total rewards denominated in NYM decreased by 24% QoQ, while rewards denominated in USD decreased by 25% QoQ despite the NYM token’s price appreciation. Reward distribution decreased from a 12-month high of 2.26 million NYM in March 2024 to 1.36 million NYM in December 2024.
The total rewards drop is likely due to the halving of the number of rewarded mix nodes and the inclusion of entry and exit gateways in the reward set. Gateways typically have lower stake committed, as they are entities that have only recently started acquiring stake and subsequently receive lower rewards. Meanwhile, only half the number of mix nodes are rewarded per epoch now, resulting in a lower aggregate total of distributed rewards.
In addition, poor performance is now more heavily penalized when selecting nodes for the active (rewarded) set. If mix nodes with very high stake have less-than-perfect performance and are penalized, this impacts the aggregate rewards distributed more significantly than nodes with lower stake but perfect performance. This means that if nodes with lower stake perform better, this decreases the total rewards distributed.
Operators were awarded 24% of overall fees in Q4’24, while delegators received 76%. This continues a shift over the last two quarters of increasing the percentage share of rewards for node operators. In Q2’24 and Q3’24, operators were awarded 9% and 13% of the rewards, respectively, while delegators were awarded 91% and 87% of the rewards, respectively. In Q4, delegators earned $335,700, while operators received $103,900. This change in reward distribution is a continued result of the parameter adjustments introduced in September 2024, which affected node operator costs and profit margins. The new parameters introduced a minimum profit margin for operators. The profit margin for operators is the operator’s revenue after their costs have been covered, with the remaining rewards going to their stakers.
Node operators compete with one another to attract delegations from the community. Nodes with lower PMs are thus more attractive to delegators because they offer a higher delegator- APY. Left unchecked, this competition can lead to a “race to the bottom” in which node operators cannot remain competitive by setting a PM that yields adequate operator rewards. This parameter change sets the following ranges:
- Profit margin (PM): 20% – 50%
- Operator cost (OC): 0–1,000 NYM
Mix Nodes
The Nym mixnet is supported by a decentralized and permissionless network of mixing nodes known as mix nodes. The network uses a client-server architecture and is not P2P to enable end-users to use the network without necessarily running a node. The primary purpose of mix nodes is to route and mix traffic through the mixnet securely.
As of the end of Q4, there were 670 total nodes available. The network selects 240 nodes (120 gateways and 120 mix nodes) to be active in each epoch to optimize reward distribution and system efficiency. The number of active nodes can scale with demand, and the parameter can be adjusted through governance (though the Nymtech team initially set it). The selection of active nodes happens once per hour, and the topology continuously changes to ensure that unreliable or underperforming nodes are removed from the network. The selection is fully decentralized and is based on a mix node’s reputation (measured by its total stake in NYM tokens) and performance.
At the end of Q4, the total NYM delegated to mix nodes reached 208 million NYM, up 5% QoQ. In USD, delegated NYM rose from $15.7 million to $21.8 million, up 38% QoQ. NYM holders can delegate directly through the Nym explorer with familiar Cosmos tools like the Keplr browser/mobile wallet or the Nym native wallet.
Ecosystem Analysis
Tokenomics
In November, Nym initiated a $1 million token buyback ahead of the NymVPN launch. The buyback aimed to reduce token oversupply, contributing to downward price pressure while strengthening the Nym treasury. Over the course of a month, Nym repurchased over 10 million NYM tokens, with the acquired assets directed towards core goals, including:
- Marketing efforts to increase awareness of NymVPN.
- Incentives for network operators to improve mixnet reliability.
- Subsidized access to NymVPN for journalists and activists requiring advanced privacy protections.
Beyond its immediate objectives, the buyback also acted as a trial run for a proposed perpetual buyback mechanism. On December 18, Nym detailed its plan for a perpetual buyback mechanism linked to NymVPN subscription payments. Under this model, every subscription (whether paid in fiat or crypto) will trigger an automated buy order for NYM tokens, which would then be used to generate zk-nyms. These anonymous access credentials separate payment data for Nym services from network usage. The credentials make it possible to de-link different sessions of the same user so that it’s not possible to compile a “pseudonymous profile.”
This system addresses a fundamental privacy issue in traditional VPN services, where user payments can be linked to activity. By design, zk-nyms ensure that payments remain unlinkable from users’ interaction with the Nym network, reinforcing the protocol’s privacy guarantees.
Beyond its privacy function, the perpetual buyback mechanism establishes a direct link between NymVPN adoption and NYM token demand. A portion of subscription payments will be continuously converted into NYM, providing a recurring source of demand that scales with NymVPN usage. Additionally, these buybacks contribute to funding network operations and development, aligning incentives between token holders and service users.
Nym Network
The Nym network underwent multiple upgrades in Q4, including the Magura and Crunch upgrades. In November, the Magura upgrade introduced structural changes to node operations by requiring all Nym nodes to function as mix nodes while also serving as entry and exit gateways. As a result, rewards are now distributed equally across five layers:
- Entry gateways
- Mix nodes (times three)
- Exit gateways
To further improve network performance, underperforming nodes are removed from the active set unless they run the latest Nym binaries and adhere to updated Terms & Conditions, which include committing to a no-logs policy. Unlike traditional VPN providers that can track and sell metadata, Nym ensures that neither Nym Technologies nor network operators can log user traffic. Since Nym Technologies does not operate any servers within the mixnet, it never has access to user data. Nym’s multi-hop route infrastructure is set up to ensure that no single server has access to both the source and destination of traffic.
In December, the Crunch upgrade introduced several technical improvements to support zk-nym anonymous credentials and enhance privacy-preserving payments on the Nym network. With this update, the infrastructure for zk-nym issuance was established. Zk-nym credentials enable private authentication by verifying a user has a valid subscription while ensuring their sessions remain unlinkable to the user. Additionally, the upgrade introduced a config score, a metric that measures how current a node’s software version is. Nodes running the latest version receive the highest score, while those on older versions receive lower scores, which affects their eligibility for the active set and reward distribution. The network also gained IPV6 support for WireGuard, expanding compatibility for censorship-resistant networking. To maintain strong anonymity, client-side statistics are now aggregated and routed through the mixnet, preventing direct exposure of usage data.
NymVPN
Copilot Insights: What is the NymVPN?
NymVPN is a VPN service powered by the Nym mixnet, designed to offer users enhanced privacy and security. This VPN employs the Nym mixnet and provides options for users to balance speed and privacy by offering a Fast Mode and an Anonymous Mode.
The Nym mixnet is a privacy DePIN that can be leveraged directly through applications that act as wrappers for tailored UX or via protocols that enshrine Nym into their networking layer.
The NymVPN app aims to meet the growing demand for privacy protection in the familiar form of a VPN while maintaining a surveillance-resistant business model.
In terms of the tradeoff between speed and privacy, NymVPN offers two distinct modes to cater to different user needs:
- Fast Mode balances speed and privacy by routing traffic through two independent servers, ensuring efficient protection for browsing, messaging, and streaming activities.
- Anonymous Mode routes traffic through five servers, utilizing advanced onion encryption and network noise techniques. This mode ensures that user activity is extremely difficult to trace, making it ideal for privacy-sensitive activities like messaging, email, and crypto transactions.
NymVPN’s general-purpose scope can potentially onboard many more users than previous Nym integrations (i.e., NymConnect and specific B2B Nym integrations). To increase accessibility, it automatically converts payments across various payment methods, including fiat, Bitcoin and NYM tokens.
Version 2024.12 of the NymVPN was the latest version available at the end of Q4’24 and was operational across major platforms, including Android and Windows. This update introduced zk-nym anonymous credentials, marking a fundamental shift in how users access VPN services. Using zk-accounts, NymVPN ensures no personally identifiable information is linked to user activity. Traditional VPNs require users to trust the provider with their personal data, but NymVPN eliminates this risk by allowing access without revealing any sensitive information.
The rollout of zk-nym credentials reflects Nym’s broader commitment to privacy. By separating payment transactions from service usage, NymVPN mitigates one of the most pressing vulnerabilities in conventional VPN models. These privacy-preserving accounts remove the need for trust, making it significantly harder for third parties to associate a user’s financial records with their network activity.
Roadmap
Nym’s roadmap for Q1’25 included the commercial release of NymVPN in March 2025. This was accomplished on March 13, marking a significant milestone for the project. The release introduced a fully tested zk-nym-based payment system, allowing users to subscribe using debit and credit cards, NYM tokens, or other cryptocurrencies like Bitcoin. Regardless of the payment method selected, zk-nym credentials ensure all transactions remain unlinkable to VPN usage.
In addition to its privacy-preserving payment model, the commercial launch will bring several enhancements to strengthen security and functionality. The introduction of a kill switch will provide an added layer of protection by preventing data leaks in the event of an unexpected connection drop. The implementation of Amnezia WireGuard will improve censorship resistance, making the VPN more resilient in regions with restricted internet access. Furthermore, the ability to select network gateways will allow users greater control over their routing preferences.
Beyond the March 2025 release, Nym has outlined a broader roadmap for NymVPN, with future updates focusing on user experience, security, and accessibility. Efforts to improve stability, reliability, and connection speed will be prioritized, alongside the introduction of split tunneling, an ad blocker, and residential IP options for streaming. Security enhancements such as post-quantum cryptography and expanded Trust Center features targeted to reinforce NymVPN’s privacy model. Additionally, NymVPN plans to expand access for their product by introducing more localized in-app experiences across different regions and supporting a broader range of fiat payment methods.
Community
Nym Squad League Season 3
Nym Squad League (NSL) launched its third season in Q4’24, from October 14 to December 31, primarily focusing on stress-testing and optimizing NymVPN before its official release. This season encouraged participants to generate extensive mixnet traffic by staying connected to the network and using Anonymous Mode in NymVPN. By increasing overall network usage, NSL contributed to refining privacy protections and improving the overall resilience of the Nym mixnet.
To incentivize participation, NSL allocated over 1 million NYM in its treasury, including grants of up to 100,000 NYM. In addition to individual rewards, the program introduced opportunities for developers to build tools and applications within the Nym ecosystem, supporting initiatives such as messaging apps, operator tooling, and the revival of NymConnect. The Squad Wealth Fund further expanded community engagement by distributing NYM rewards through quarterly “Squad League Missions” offering structured incentives for ongoing contributions to the network. A referral program was also introduced to accelerate user adoption, reinforcing community-driven expansion.
Nym at DevCon and Web Summit
Nym participated in two major industry events this past quarter: DevCon in Bangkok and Web Summit in Lisbon, using these platforms to demonstrate NymVPN’s capabilities ahead of its full launch in 2025. The Nym team presented the protocol’s privacy enhancements beyond traditional VPNs, showcasing how the mixnet infrastructure provides resistance against metadata surveillance.
At Web Summit, Nym delivered a presentation on defeating AI surveillance with mixnets, emphasizing how Nym’s technology generates network noise to counter large-scale data monitoring. This discussion was followed by a press conference on post-US election privacy threats, further reinforcing Nym’s advocacy for decentralized and censorship-resistant privacy solutions.
Nym.com Launch and Celestia Partnership
Nym launched Nym.com, a dedicated platform that provides users with direct access to the NymVPN, educational resources on network privacy, and blog updates on ecosystem developments. The site aims to serve as a central hub for community engagement while offering streamlined onboarding for new users.
Additionally, Nym announced a partnership with Celestia, integrating its mixnet technology to secure Celestia’s Data Availability Sampling process. This collaboration aims to protect against selective disclosure attacks, reinforcing Celestia’s consensus security while expanding Nym’s role in onchain privacy solutions.
Nyx
Nyx is a sovereign, general-purpose Cosmos L1 blockchain with built-in privacy features. It was built with various open-source Cosmos technologies, such as the Cosmos SDK. Nyx is currently permissioned, with a Proof-of-Authority consensus mechanism run by 31 active validators as of Q4’24. It is planned to move to a permissionless Bonded-Proof-of-Stake (BPoS) mechanism. Nyx will feature a BPoS Byzantine-Fault-Tolerant (BFT) consensus mechanism when it changes mechanisms.
The primary purpose of Nyx validators is to order transactions and reach a consensus on the network’s state. The state is a directory (or “map”) of all mix nodes and their reputations. While mix nodes mix traffic, validators maintain consensus on the mixnet’s topology, process Nym token transactions, and issue zk-nyms, the privacy-preserving “tickets” that allow users to use the network via the NymVPN app. These Nyx validators are similar to PoS validators on other interchain networks and PoS blockchains in general.
Validators are rewarded for two types of work: block signing and running the NymAPI to monitor performance and issue zk-nym credentials for the NymVPN app. The reward scheme was implemented in February, and validators receive rewards in NYM tokens.
Closing Summary
Q4’24 was up-and-down for Nym with increased price action in the NYM token and improvements to the network on the path towards launching NymVPN in Q1’25 but combined with reduced rewards for delegators and validators. In November, Nym executed a $1 million NYM buyback, repurchasing 10 million tokens to mitigate oversupply and strengthen the protocol’s treasury. The buyback also served as a test case for the proposed perpetual buyback mechanism, which, if implemented, would create ongoing demand for NYM by converting all NymVPN payments into token buy orders.
Network upgrades remained a priority in Q4. The Magura upgrade restructured node operations by requiring all nodes to function as mix nodes while also serving as entry and exit gateways. The Crunch upgrade introduced additional performance enhancements, including rewards for zk-nym issuance and a new node performance scoring system.
NymVPN’s release in March 2025 introduces a zk-nym-based payment system allowing users to subscribe with debit/credit cards, NYM, or BTC, ensuring all transactions remain unlinkable to VPN usage. With these developments, Nym enters 2025 with a strengthened economic model, an evolving incentive structure, and a privacy-focused application poised to drive adoption.
