What is XEM?

XEM is the native utility and governance token of the NEM protocol. Managed by the NEM.io foundation based out of Singapore, the protocol started as a fork of the NXT blockchain, the developers have since created their own blockchain architecture. The NEM foundation was one of the early projects to recognise the blockchain and cryptocurrency revolution to be larger than simply a means of payment. The project moved beyond simply a means of payment with what they call their ‘Smart Asset System’, which supports everything from custom tokens to supply chain tracking protocols. While the blockchain does operate similarly to Bitcoin in that it is a distributed public ledger network, there is a key difference with its Proof-of-Importance consensus mechanism. This mechanism works by making only validators hold at least 10,000 XEM tokens for a certain amount of time. Each day an investor holds XEM, 10% of that holding is considered ‘vested’. Only once there is 10,000 XEM fully ‘vested’, then the investor can begin ‘harvesting’, which is similar to being a ‘miner’ of Bitcoin, to then receive transaction processing rewards. The blockchain is then primarily rewarding those who actually use the network.