Western World: Supply and Demand of IPFS/Filecoin Tokens
Regarding the IPFS&Filecoin project and related token network benchmarks, Westworld will make the following explanations based on the official white paper.
1. Filecoin's token model is more perfect
Many blockchains mint tokens based on a simple exponential decay model. In this model, the block reward is the highest at the beginning, and the participation of miners is usually the lowest. Therefore, mining in the early stages of the network life cycle will generate many tokens per unit, and then rapidly decline.
In many
cryptoeconomic simulations, it is clear that a simple exponential decay model will encourage short-term behavior during the network startup period, which will adversely affect the Filecoin economy. Specifically, this will encourage storage miners to overinvest in hardware in order to package storage for mining as quickly as possible. It will be profitable to exit the network after consuming these early block rewards, but doing so will result in the loss of user data.
This will harm network users, such as losing data and inaccessible long-term storage, and miners have little incentive to improve the network. In addition, this will also cause most network subsidies to be paid based entirely on time rather than on the actual storage (and value) provided to the network.
In order to encourage the consistency of storage landing and long-term storage investment rather than just rapid packaging, Filecoin introduced the concept of network benchmarks. Instead of minting tokens purely based on the passage of time, block rewards are increased as the total storage computing power on the network increases. In this way, the structure of the original exponential decay model can be retained, and it can be improved during the initial period of network startup. Once the network reaches the baseline, it will issue the same cumulative block reward as the simple exponential decay model, but if the network does not reach the pre-established threshold, a part of the block reward will be delayed. The overall result is that Filecoin's rewards to miners are more closely matched with the utility provided to users by them and the entire network.
Specifically, a hybrid index casting mechanism is actually introduced, that is, part of the reward comes from the simple exponential decay "simple casting", and the other part comes from the "benchmark casting" of the network baseline. The total reward for each period will be the sum of the two rewards. With this mechanism, Filecoin mining should be more profitable. Simple casting additionally incentivizes early miners and provides resistance to vulnerability when the network is impacted. Benchmark minting mints more tokens as the network creates more value. When the network can unlock greater potential, the agreement will mint more tokens to facilitate more transactions. (Western World IPFS Mining Machine: Mariobtc) This will promote the increase of network value creation and reduce the risk caused by too fast coin minting.
The agreement allocates 30% of the storage mining quota for the simple casting mechanism, and allocates the remaining 70% for the benchmark casting. 30% simple casting can provide reaction force and resistance to fragility when the network is impacted. Baseline capacity can start with a small percentage of global storage today, and then it will grow rapidly and reach a higher but still reasonable global storage ratio in the future. Therefore, from a preliminary point of view, the network baseline will start at 1EiB (this number is less than 0.01% of today's global storage capacity), and it will grow at a rate of 200% every year (higher than the 40% annual growth rate of world storage capacity). When the amount of storage provided by the network is about 1-10% of global storage, the community can decide together to slow down the growth rate.
There are many functions that can exceed the benchmark more efficiently and economically, and release more benchmark casting shares. The community can unite to achieve these goals,
● Copy demonstrated higher performance algorithms: less EU data, verification time faster, lower cost hardware, different security
full assumption, so that the longer the life cycle of a sector, and the sector can be performed without repackaging upgrade.
● A more scalable consensus algorithm can provide greater throughput and process more messages in a shorter time.
● More trading order functions that can make the sector last longer.
Finally, it should be noted that although block rewards encourage participation, they cannot be regarded as a resource that can be exploited and abused.
This is a subsidy pool that benefits the economy and participants together to provide seeds and subsidies for the formation and growth of the network. Figure 12 shows the different stages of the economy and the different sources of subsidies.
6.2 Token Distribution
Filecoin token distribution rules are as follows: The minting limit is 2 billion filecoins, called FIL_BASE. In Filecoin's creation block distribution, 10% of FIL_BASE is allocated to financing, of which 7.5% was sold in 2017, and the remaining 2.5% will be used for ecological development, follow-up financing, and other things described in 2017 use. 15% of FIL_BASE is allocated to the protocol laboratory (including 4.5% to the laboratory team and contributors), and 5% is allocated to the Filecoin Foundation. The remaining 70% is allocated to Filecoin miners as mining rewards, “used to provide data storage services, maintain blockchain, distribute data, run contracts, etc.” Over time, these rewards will support multiple types of mining Mining, so this part will be subdivided into covering different types of mining activities.
Storage mining rewards Storage miners are the only group of miners who are allocated incentives when the network goes online. This is also the earliest group of miners who are also responsible for maintaining the core functions of the agreement. Therefore, the largest part of the mining reward is allocated to this group, 55% of FIL_BASE (accounting for 78.6% of the mining reward). This part of the reward is mainly issued by block rewards, which are used to reward the maintenance of the blockchain, run the contract, and subsidize reliable and useful storage. This section will also cover early miner rewards, such as rewards on the space race and other potential storage miner startup schemes, such as faucets.
Mining Reward Reserve In order to build a strong economy, the Filecoin ecosystem needs to ensure that all miners have incentives (such as searching for miners, repairing miners, and types of miners that are temporarily unknown in the future). In order to ensure that the network can provide incentives to other types of miners, 15% of FIL_BASE (21.4% of mining rewards) is reserved for mining reward reserves. The community can use Filecoin Improvement Proposals (FIPs) or similar decentralized decisions in the future Ways to decide how to distribute these tokens. For example, the community can decide to set up rewards for search mining and other mining activities. Just like other blockchain networks and open source projects, the Filecoin network will continue for many years to come Evolve, adapt and overcome challenges. Reserve these token reserves to provide more flexibility for future miners and the ecosystem as a whole. Other unsubsidized mining activities, such as retrieval mining, are also very important to the Filecoin economy. These It can be said that mining activities require a higher percentage of mining rewards. With the evolution of the network many years later, the community can decide whether this reserve is sufficient and whether it is necessary to adjust the unmined tokens.
Market value
Many communities use different calculation methods to estimate the market value of virtual currencies and token networks. But the most reasonable token supply in the market value calculation method is FIL_CirculatingSupply (total circulation supply of tokens). After all, the tokens that have not been minted, unlocked, locked and burned can neither be circulated in the economy nor traded. Using other larger calculation methods such as FIL_BASE is probably a false exaggeration and should not be believed.
The total amount of burning tokens
In addition to the filecoins that were destroyed due to storage failures and consensus failures, some filecoins were also destroyed to pay for the calculation and bandwidth network transaction fees on the chain, which brought long-term deflationary pressure to the tokens. Usually accompanied by the network transaction fee is the message packaging priority fee that flows to the miners of the block. The packaging priority fee is not burned but is directly sent to the miner who packs the message.