> For the complete documentation index, see [llms.txt](https://docs.nearby.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.nearby.finance/token/usdnearby-tokenomics.md). # $NEARBY Tokenomics ### Overview $NEARBY is the native utility and incentive token of Nearby Protocol. It coordinates economic activity across all three protocol layers: * Proof of Location * Nearby Mesh * OfflinePay The token is designed to align incentives between users, node operators, witnesses and developers contributing to the network. Total supply is fixed at: **100,000,000 $NEARBY** *** ### Token Design Philosophy $NEARBY is not designed as a speculative asset or purely governance token. Instead, it functions as a **coordination mechanism for physical-world infrastructure**, rewarding participants who contribute to: * Network coverage * Location verification * Communication relay * Offline transaction validation * System integrity and resilience The token’s utility is directly tied to real-world participation. *** ### Token Utility #### 1. Proof of Location Incentives Users and nodes are rewarded for generating valid Proof of Location attestations. Rewards are based on: * Proof validity * Geographic coverage contribution * Network demand in specific regions * Quality of device attestation This creates a distributed incentive system for expanding geolocation coverage. *** #### 2. Node Operator Rewards Node operators provide infrastructure for: * Location signal aggregation * Mesh message relay * Proof validation support * Network connectivity enhancement Nodes earn $NEARBY based on: * Uptime contribution * Data relay volume * Participation in proof verification flows * Geographic importance of coverage area *** #### 3. Nearby Mesh Incentives Participants in the Nearby Mesh network may earn rewards for: * Relaying messages between peers * Maintaining local network connectivity * Supporting event-based communication clusters This ensures that communication infrastructure emerges organically in high-density environments. *** #### 4. Witness Rewards Witnesses play a critical role in both Proof of Location and OfflinePay systems. They earn $NEARBY for: * Signing valid attestation events * Observing offline transactions * Contributing evidence for reconciliation * Supporting dispute resolution processes Witness participation strengthens the trust layer of the entire ecosystem. *** #### 5. OfflinePay Ecosystem Incentives While OfflinePay transactions are denominated in stablecoins (USDC and USDT), $NEARBY is used to incentivize system integrity. Rewards are distributed for: * Valid offline transaction propagation * Participation in reconciliation processes * Witness verification of transaction events This ensures that offline financial activity remains verifiable and secure. *** ### Supply Allocation (Proposed Model) Total supply: **100,000,000 $NEARBY** #### Ecosystem & Rewards - 45% Allocated to ongoing incentives across all protocol layers: * Proof of Location rewards * Mesh network participation * OfflinePay validation incentives * Witness attestations *** #### Node Operators - 20% Allocated to infrastructure providers operating: * Geolocation verification nodes * Mesh relay nodes * Proof aggregation systems *** #### Community & Users - 15% Allocated to early users, contributors and ecosystem growth programs. *** #### Treasury - 15% Controlled by protocol governance for: * Ecosystem development * Strategic funding * Grants and partnerships * Liquidity provisioning *** #### Team & Contributors - 5% Allocated to founding team and core contributors with vesting schedules. *** ### Emission Model $NEARBY emissions are designed to be **usage-driven rather than time-based**. This means: * Rewards are distributed based on network activity * Higher usage areas generate more incentives * Idle regions do not continuously emit rewards without participation This creates a dynamic incentive model aligned with real-world adoption. *** ### Incentive Loop Design Nearby Protocol is structured around a reinforcing incentive loop: 1. Users generate Proof of Location → earn rewards 2. Nodes validate and relay data → earn rewards 3. Mesh participants maintain communication → earn rewards 4. Witnesses observe and verify events → earn rewards 5. OfflinePay enables economic activity → generates network demand Each layer strengthens the others. *** ### Economic Role of $NEARBY $NEARBY functions as: * A reward mechanism for physical-world participation * A coordination layer for decentralized infrastructure * A security incentive for network integrity * A medium for aligning distributed participants It is not required for basic usage of the protocol, but it becomes central to network incentives and infrastructure sustainability. *** ### Sustainability Model The protocol is designed to gradually transition from incentive-driven bootstrapping to activity-based sustainability. Over time, rewards are expected to shift from: * Broad ecosystem subsidies\ → toward * Targeted, high-value network contributions This ensures long-term efficiency and reduces unnecessary emissions as adoption grows. *** ### Relationship to the Nearby Ecosystem Each layer of Nearby Protocol contributes to the token economy: * Proof of Location → generates geographic verification value * Nearby Mesh → generates communication infrastructure value * OfflinePay → generates settlement and transaction integrity value $NEARBY acts as the binding economic layer across all systems. *** ### Closing Design Principle The $NEARBY token is designed around a simple principle: **Participants who make the physical-world network more useful should be the ones who benefit from it economically.** This aligns incentives between users, infrastructure providers and the protocol itself, ensuring that growth is driven by real utility rather than artificial demand. --- # Agent Instructions This documentation is published with GitBook. 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