Recently, I had a phone call with an old player in the blockchain circle, and he sighed, saying: “Now many public chains are just like the owners of empty shops during the cold winter—rent (DA fees) must be paid, but customers (active users on the chain) are not coming, and every day they are losing money, not even making enough to cover the electricity bill.”
This statement precisely hits the pain points of the current public chain industry. Looking through the financial reports of several established L2s, the numbers are shocking: on-chain activity has plummeted, and the days when they could win effortlessly through transaction fees during a bull market are gone. The gas revenue can't even cover the data availability (DA) fees paid to the Ethereum mainnet, so they can only rely on their own funds to subsidize losses. This business model of 'living off daily active users' is like tying one's life savings to the tides; when the tide goes out, you can only run bare.
While the industry is generally caught in growth anxiety, frantically focusing on 'how to attract new users,' the Tokenomics white paper released by @MidnightNetwork presents a mechanism that seems counterintuitive but is eye-opening—On-chain Treasury. This design directly breaks the inherent shackles of public chain economics and is a key to breaking the deadlock in the winter.
Most public chains' treasuries are following the old path of 'robbing Peter to pay Paul.'
In fact, looking at the entire public chain track, the operational models of treasuries boil down to two types, both of which inherently contain risks:
Either they rely on the locked tokens reserved in the early stages of the project, appearing to have funds to subsidize the ecosystem, but in reality, they are using future circulation to pave the way; once unlocked, they inevitably face the risk of a crash, effectively overdrawing current value with future value.
Either they take a cut from user transaction fees, 'cutting off' the earnings of ecosystem participants, which over time can easily dampen the enthusiasm of users and developers, further compressing the ecosystem's growth space.
In simple terms, the vast majority of public chains' treasuries are 'living off the old capital,' either overdrawing the future or consuming the present, completely failing to create a self-sustaining cycle.
@MidnightNetwork 's brilliant move: charging 'vacancy tax' on 'idle blocks.'
Midnight goes against the tide and has introduced a dynamic splitting mechanism that completely rewrites the old logic of 'an empty chain = no value':
When the network's block utilization is low, trading is sparse, and the chain is idle, the unused block space will not be wasted— the system will automatically convert this 'unutilized value' into real funds injected into the treasury.
It is equivalent to imposing a 'vacancy tax' on idle on-chain space; even if no one is trading, the treasury can still steadily accumulate funds. This design directly overturns the industry’s judgment criteria: previously, whether a public chain was good or not depended on network congestion and user numbers; now, looking at Midnight, the emptier the chain and the quieter the market, the more funds the treasury can accumulate.
When the industry warms up and ecological incentives are needed, the 'bullets' accumulated in the treasury can come in handy: funding technological research, providing subsidies to developers, promoting ecosystem implementation… It’s equivalent to writing a set of counter-cyclical economic tools into the protocol itself, allowing the network to accumulate strength in winter and efficiently explode in a bull market.
What’s more worth noting is that the fees generated from the future DUST capacity trading market will all flow back to the treasury. This shows that the Midnight team is not trying to do a one-time deal as a 'crypto project,' but is building the network as a company that can self-generate revenue and operate long-term, shifting the core logic from 'surviving on issuing tokens' to 'self-profitability through the ecosystem.'
Long-term vision: Don't just focus on privacy; pay attention to the underlying architecture.
Currently, $NIGHT has just recently gone live, and the market is mostly focusing on its privacy attributes, seeing it as a core selling point. However, for investors and developers looking towards 2026 and long-term layouts, what needs to be explored more deeply is its underlying economic structure.
Privacy is just Midnight's stepping stone, while the treasury mechanism of 'turning idle assets into income' is its true trump card for surviving longer and going further than established public chains in the current sluggish market. In a time when the industry is struggling for survival, this foresight of counter-cyclical wisdom may be the core strength for public chains to weather the winter.#night
