Notes on Relaunch

Why Is the Spacemesh Project Not Living Up to Its Promise?

The Spacemesh project and protocol face several structural challenges that prevent it from reaching its full potential. The primary issues are as follows:

1. Over-centralization
   
2. Incentives to Split Identities
   
3. Suboptimal Home Smeshing Experience

Addressing these challenges is, in our view, the first and most critical step toward any viable future for Spacemesh. But is it enough? What about the use cases, go-to-market strategy, and other factors?

Observing price action as an indicator of collective sentiment, it’s worth noting that Spacemesh was trading at approximately $1 in substantial volumes before the emergence of these three issues. Therefore, we are working under the assumption that addressing these problems—prior to focusing on other features such as AthenaVM and RWA/DEPIN use cases—is a meaningful step toward price recovery.

Furthermore, the recent surge in the tokenization of real-world assets (RWAs) reinforces our belief that there is a substantial market for high-throughput, high-latency, and maximally resilient infrastructure. Such infrastructure, with its low transaction costs, is suitable for both low- and high-value transactions that do not require instantaneous confirmation—particularly relevant for numerous smart contract applications.

How Do We Get There?

We propose a relaunch of our network aimed at addressing the following key areas:

1. Improving Tokenomics
   
2. Reducing Pool Dominance
   
3. Fixing Incentives to Split Identities
   
4. Pruning History
   
5. Enhancing the Smeshing Experience
   

Following the relaunch, we will initiate a concentrated marketing effort to expand the smesher base. As we develop our relaunch plans, we must consider numerous interconnected factors, including whether to re-initialize storage, potential downtime, and securing the overall process. We have identified what we believe to be the optimal balance and will present our proposal to the community for approval during a town hall meeting within two weeks.

Introduction

We acknowledge that significant work remains ahead and that the initial relaunch may not encompass all our aspirations. We also recognize that some community members have raised concerns regarding timing and preparedness.

Nevertheless, we believe that moving forward with the proposed relaunch is a crucial and positive step toward accelerating progress toward our ultimate objectives. This relaunch will deliver improvements across several key areas while allowing for further iterations as we continue to refine our vision.

Moreover, this relaunch marks the beginning of a collaborative process led by the development team, with ample opportunities for the community to review, discuss, and suggest changes to the proposed items outlined below.

Updated Tokenomics

Our original issuance model aimed to minimize supply shocks through long-term inflation, with issuance extending over a thousand years. This approach resulted in a substantial total supply and low per-block rewards, which have negatively impacted smesher profitability, especially during the network’s early stages.

To address this, we are revising the issuance model. The first 10 years will follow the existing plan, after which the inflation rate will decrease sharply. By 2065, the total supply will reach 900 million SMH (a reduction from the original 2.4 billion SMH). This ~2.7x reduction in total supply is expected to increase the value of each coin, thereby enhancing smesher profitability

Split-node Smeshing in Place of Pools

Supporting smeshers has always been our top priority. Unfortunately, large mining pools have made running a full node increasingly challenging for home smeshers. To address this, we have restructured the Spacemesh node to separate the smeshing software from the full node. While the node itself must be trusted, the smeshing service does not.

This change enables us to operate a trusted node on behalf of small home smeshers, allowing them to participate without needing the full resources required to run a node. Although robust tooling to support this setup is still in progress, we are actively prioritizing usability improvements. Community contributions are welcome, and we encourage anyone needing assistance with home smeshing to reach out to us on Discord.

Dissolving Legacy Identities

As we approach PoST v2, which discourages identity splitting and improves smeshing efficiency for unified identities, we encourage users to transition early. We will introduce a bonus for new identities initialized in or after epoch 45 (beginning April 4, 2025). Existing identities will remain compatible with PoST v2, eliminating the need for re-initialization.

The bonus will start modestly and increase gradually to minimize disruption, giving smeshers the flexibility to transition when appropriate. Eventually, the bonus will significantly increase the weight (and reward) of eligible smeshers. Legacy identity holders will face a choice: reinitialize with a unified identity or stop smeshing, as maintaining older identities will become unprofitable.

What Do I Need To Do?

The relaunch will be executed as a hard fork, delivered via a software update to the node. The transition to the new rules will be automated and handled by the node software at the appropriate epoch, with no expected downtime.

To take advantage of the new identity bonus, reinitialize your storage no sooner than epoch 45, using a fully synchronized node. Ensure that a “commitment ATX” from epoch 45 or later is used during initialization. We will provide detailed instructions closer to the epoch to facilitate a smooth transition.

The Path Forward: Growing the Smesher Base and AthenaVM

Upon completing the relaunch, we plan to launch a targeted marketing campaign to engage potential smeshers. We are actively gathering ideas for organic growth and would greatly appreciate community feedback on how to best attract storage owners of all sizes.

In parallel, we are preparing for the release of AthenaVM—a crucial component of our long-term vision. Within approximately six months, we aim to establish a highly resilient, secure, and programmable ledger. While it will initially feature high throughput and high latency, it is well-suited for high-value transactions where robustness outweighs speed.

Real-World Asset Tokenization (RWA)

We believe that the first significant value increase will come from bringing real-world assets (RWA) on-chain—including real estate, financial assets, and healthcare data. These sectors inherently value robustness over speed, positioning Spacemesh as the ideal infrastructure to support tokenization and fractionalization.

We are confident that relaunching the network under these new rules aligns with our core values of decentralization and home smesher empowerment. Together, these measures aim to enhance profitability for home users while encouraging responsible behavior from larger participants to reduce network strain.

We are excited for the future of Spacemesh and are committed to building a more fair, sustainable, and decentralized ecosystem for everyone.