Nym Technologies, a privacy-focused Swiss startup backed by Andreessen Horowitz, will buyback $1 million worth of NYM tokens.
Token buybacks, a fairly common practice in crypto markets where a company repurchases its own tokens, aim to constrict supply and bolster the company's treasury.
"This buyback is not just about financial strategy; it's about preparing for growth," Nym CEO Harry Halpin said in a statement.
There are currently around 803 million (out of a total of 1 billion) NYM tokens in circulation, exchanging hands at around $0.06 per token, according to The Block's data page. The token is up over 7% over a 24-hour period. NYM tokens are used for incentivizing node operators, staking, governance and participating in the network's proof-of-mixing consensus mechanism.
The move comes ahead of the launch of the privacy-preserving NymVPN in mid-December. The system uses a decentralized relay network run by community members who are incentivized to join via NYM token payouts. It also incorporates a “Noise-Generating Mixnet” to shield web traffic.
“Network operators are rewarded in NYM for their services in anonymizing user traffic, and each user payment for NymVPN is converted into NYM tokens to delink a user’s payment from their usage of the app. Each new subscription means more NYM buy orders as well as fully anonymized VPN use,” the company wrote.
This initial buyback will also serve as a “trial run” of a “perpetual NYM buyback,” which will grow as NymVPN does.
“The entire point of the NYM token launch was to boot-strap the supply side of the decentralized network of servers that the NymVPN is built on,” Halpin said.
In addition to reward network operators, the funds from the buyback will go towards marketing efforts and expanding the Nym’s techstack.
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