Observation | After Filecoin's total network computing power reaches 2.5EB, miner rewards will increase

Filecoin's total network computing power exceeds 2EB

The Filecoin mainnet was launched globally on October 15, 2020, and the total network storage exceeded 2EB on January 22, 2021. Only two months have passed since the last breakthrough of 1EB on November 21, 2020, and it is only less than 0.5EB away from the important base of the network 2.5EB.

According to Filecoin's official economic model, after 2.5EB, the rewards for the entire network will increase, and the rewards for a single T will increase.

This requires the joint efforts of communities around the world to jointly advance the great project of building a distributed network that stores the most important information of human society and builds the next generation of the Internet.

When the Filecoin network's total computing power was 1EB, the 24-hour mining output of FIL coins was about 180,000. Now, on January 26, 2021, the network's computing power has exceeded 2EB, and the 24-hour mining output of FIL coins has reached 270,000.

Filecoin Network Baseline and FIL Release

The release of FIL is divided into two parts: simple supply and baseline supply

Speaking of the network baseline, Filecoin's economic model is complex. It sets a network baseline in the daily release reward. According to Filecoin's latest adjustment, the initial baseline is about 2.5EB.

Filecoin mining is different from Bitcoin mining, and each block reward is different. Bitcoin halving is a sudden halving at a certain height every 4 years; while Filecoin’s reward for each block is different, and it is smoothly halved over 6 years, with a total mining amount of 1.1 billion.

Before joining the network baseline, Filecoin released the total supply in the figure below. After joining the baseline, 30% of the total supply, which we call simple supply, is to ensure that miners can still get part of the reward when the total network computing power does not reach the network baseline. This will be smoothly halved within 6 years, as shown in the curve below:

How is the remaining 70% distributed?

The official network baseline is set to start at 2.5 EiB and grow 100% each year. If the computing power of the entire network has reached 2.5 EiB when the mainnet is launched and has been maintained above the network baseline, then the release of FIL will be like the total supply curve above, with a normal halving every 6 years. However, the reality is more complicated.

In general, the network baseline solves the problem of few miners but high profits in the early stage. It can help the network grow. As more miners join, there will be more rewards. It can be combined with the actual situation to protect the healthy growth of the network.

Once the total network computing power reaches above the 1EB network baseline supply, it will return to normal decay.

According to the "Filecoin Economic Model - Design of Block Rewards": Once the network reaches the network baseline computing power standard, the stable decay mode is officially started, so the subsequent daily supply of mining can use the normal decay rule, that is, the speed of mining Fil in the entire network every day is approximately equal to V day = 30% × 443037 * 0.999685n.

During the simple release and baseline release process, the total daily release will have a historical peak value ; as the scale grows, the total reward will grow, and the increased rewards are mainly divided into two parts: returning to the normal baseline network level, and the delayed release part that did not meet the baseline standard before. However, it is not an infinite growth. When the effective time is close to the natural time, the daily reward will gradually decrease and return to the normal 6-year halving release cycle.

The reduction in Filecoin's single-T output and the increase in the amount of pledged funds are both related to the benchmark storage quantity set by the economic model, and will gradually improve after reaching 2.5EB.

Based on Filecoin's economic model, the 1.1 billion FILs are divided into two parts. 30%, or 330 million, is a simple decreasing model, that is, it is halved every 6 years, just like Bitcoin is halved every 4 years; 70%, or 770 million, is released according to the baseline, that is, it starts at 2.5EB and then continues to be released with a 100% increase. In simple terms, 770 million coins are continuously released based on the growth of data storage on the entire network.

Flower says——

During the process of simple release and baseline release, there will be a historical maximum value. According to the current growth rate, once the total network computing power reaches more than 1EB network baseline supply, it will return to normal decay.

Therefore, it is expected that the golden time for mining will be within 1-2 years after the mainnet is launched.

As the total reward increases, it is predicted that the single T revenue will rise to a certain extent, and then it will gradually decrease slowly (the FIL distributed to the single T revenue will decrease at this time, and as the data continues to grow, the price of FIL coins will inevitably continue to rise). In general, only by deploying computing power in advance can you catch up with the highest growth area of ​​Filecoin single T revenue and enjoy the dividends of the largest number of FIL.

Flower reminder——

Investing is a long-term process! Be cautious when investing and don’t rush into it! Be sure to do a comprehensive investment research before investing!

The emergence of a new project is bound to be accompanied by risks and opportunities. In a new field, we must have a clear enough understanding, obtain information from multiple aspects, identify and extract information, stay sober, and find the official direction, so that we can seize opportunities and avoid risks!