One of the circulation of Filecoin: Investor token release

On December 11, 2020, at the Storage Market Summit co-hosted by Protocol Labs and ETHGlobal, Colin, Head of Operations at Protocol Labs, and ZX, Head of Economic Models, interpreted and shared this. Some of the material in this article is taken from some of the materials they shared.

Due to the large amount of content, this article is divided into several parts for interpretation.

I believe many students have seen the following picture, which comes from the economic analysis report during the Filecoin ICO. From this picture, we can see that the total supply of Filecoin is 2 billion, 30% of which will be released linearly over 6 months to 3 years for investors, teams, foundations, etc., and 70% for block rewards (mining), which will be released in half every 6 years.

This picture does not mention the circulation volume, it describes the supply volume.

However, before the mainnet was launched, after the new economic model was finalized, a lot of things changed. This chart is no longer applicable. These influencing factors include:

• 15% of the block rewards are reserved and will be determined at a later date, so the current block reward ratio has decreased;

• The introduction of baseline supply makes block rewards adjusted by the actual computing power of the network, and the total reward fluctuates within a relatively large range.

• EIP-1559 introduced, large-scale burning triggers supply reduction

Therefore, in the new economic model, neither the supply nor the circulation can be simply calculated. This article will leave this aside and first look at the investors and team part, from simple to complex.

No matter how the mining part changes, the investor's part must be executed according to the contract. This part will not change, is relatively simple, and can be calculated very clearly.

According to the Early Investor Agreement, investors can choose different release periods to obtain different discounts. After the ICO is completed, the proportion of investors choosing different release periods is roughly as follows:

Data shows that more than half of the early investors in Filecoin are 3-year investors, that is, long-term investors who are optimistic about the long-term prospects of the project. This is consistent with Filecoin's entire economic model and vision.

Early investors account for about 7.5% of the total supply. Based on the above ratio, it can be calculated that the number of SAFT investor tokens released each month within 36 months after the mainnet is launched is roughly as follows:

That is to say: in the first 6 months (the current stage), about 10.1 million will be released each month. After 6 months, at the end of the first year, the monthly release will be reduced to 4.6 million. In the second year, 2.7 million will be released each month, and in the third year, 2.4 million will be released each month.

From this we can see that the release of early investors in the first 6 months will have a greater impact on the overall supply and circulation.

Investors account for 7.5%. Another relatively large part is the Protocol Labs, the team and contributors, and the foundation. They account for 10.5%, 4.5% and 5% of the total supply respectively. The total is 20%. This part is released linearly over 6 years.

Then, the theoretical release per month is:

2,000MM * 20% / (12 * 6) ~= 5.5555MM

If this part is added to the above release diagram, the release of the non-mining part becomes like this:

That is to say, within 6 months after the mainnet launch, SAFT investors accounted for a larger proportion of the release, and after that, the main release proportion was mainly accounted for by the Protocol Labs team, major contributors and the foundation.

The development of Filecoin after the mainnet is launched is closely related to the application of this part of the release. We know that the goal of the Filecoin Foundation is to promote the development of the ecosystem. At the same time, the Filecoin team and Protocol Labs have also promised that they will hold Filecoin tokens for a long time. We hope that the Filecoin community, team, and foundation will work together to make good use of these funds, gradually enhance the Filecoin network and value, and realize its great vision.

The figure below shows the total release trend based on the proportion. It will be fully released in 6 years, about 545 million, accounting for about 27.5% of the total supply.

Due to the introduction of baseline rewards, the calculation of block rewards is more complicated.

-- to be continued--

• Let’s talk about Filecoin’s gas fee again

• What’s next for Filecoin: economic model discussion?

• Let’s talk about Filecoin’s transfer fees

• Forest or trees? - Thinking behind Filecoin's economic model