Midnight divides the transaction fee problem into two layers. $NIGHT is a governance asset. DUST is the fuel for executing transactions on @MidnightNetwork , generated automatically from holding NIGHT over time and then burned after each use. This design is correct because it separates the asset value from operational costs, avoiding spikes in fees like Ethereum in 2021.
However, upon closer reading, I see a consequence that the tokenomics documentation does not emphasize enough.
DUST is generated linearly based on the amount of $NIGHT held. Anyone holding 100 NIGHT has 100 times more DUST than someone holding 1 NIGHT. There is no mechanism for adjusting based on actual demand or contribution levels.
A startup wanting to build a healthcare application with a few thousand transactions per day needs to hold enough NIGHT in advance for DUST to accumulate gradually; they cannot just buy it today and use it immediately. If they do not have enough, they are throttled compared to organizations that have already held millions of NIGHT and accumulated DUST beforehand. The choice is to buy more NIGHT from the market or rely on whales to be allocated DUST. It's not a high fee. It is a barrier of assets combined with a time barrier.
I have been closely monitoring Midnight and appreciate their technical design. But this is a point I have yet to see anyone question: network access is being distributed based on held assets, not according to demand or contribution. That is exactly how traditional financial systems operate. Midnight solves the privacy problem. But at the economic layer, Midnight is bringing access back to those who already have assets beforehand.
Can such a system expand adoption from those who genuinely need it, or will it ultimately still prioritize those who have had assets from the beginning?