5.4 Fee Structure & Discounts

Instead of a one-size-fits-all fee that penalises low-value transactions and barely registers on high-value trades, NXT adopts a tiered, usage-weighted model. Every on-chain action incurs two components. The first is the base-chain gas fee, paid in the underlying network currency and subject to its market dynamics. The second is a protocol service fee, denominated abstractly and convertible into either the native chain asset or NXT. By default, users pay the full service fee, but those who hold or stake NXT receive automatic rebates credited at the next block.

The rebate engine is continuous, not cliff-based. As soon as a user’s staked balance crosses a rebate threshold, the new rate applies to subsequent transactions. This fine-grained structure prevents manipulation strategies such as unstaking immediately after a snapshot to dodge lock-ups while still benefiting from favourable rates. Institutional desks can model long-term transactional volume, calculate the optimal stake to minimise total cost, and lock tokens accordingly, providing predictable demand for NXT without forcing speculative exposure. Retail users who transact infrequently may choose not to stake at all, accepting higher fees but avoiding lock periods—preserving flexibility for small holders.

Fee policy changes—adjusting the curve, introducing new action classes, or reallocating revenue splits—must pass governance votes with an additional rate-change delay baked into execution. This cooling-off period gives automated trading bots, custodians, and risk systems time to recalibrate batch operations and prevents governance capture from imposing sudden, punitive costs. All collected service fees route to a transparent treasury contract with parameterised split: a portion funds staking rewards, another replenishes the insurance reserve, and the remainder earmarks grants and operational budgets. Real-time dashboards show inflow distribution, allowing community members to verify that contract logic matches published fee schedules.

To foster healthy liquidity on secondary markets, NXT integrates market-maker incentives. Addressable liquidity pools that meet depth and spread criteria receive partial fee refunds even if their operators do not stake large token balances. This carve-out recognises that liquidity providers already shoulder inventory risk and should not double-pay through high fee loads. By balancing rebates, refunds, and transparent treasury allocations, the fee system converts transactional friction into a sustainable funding engine that underwrites security, growth, and community initiatives without resorting to surprise inflation or opaque off-ledger revenues.