Summary of Q&A on Filecoin’s economic model

Minting Rate ~ Network Utility Rate

Incentivize and reward storage, not just package speed and hardware

Resistant to shocks and fluctuations

Defining network-level KPIs: Network baseline

Defining progress towards achieving KPI: Network Time

Casting rewards based on network progress

If the network remains above the baseline, the minting half-life will be 6 years. Otherwise, early rewards will be delayed until the future.

It is not to set a threshold for small miners

Must be small enough for miners to easily join the network

Must be large enough to ensure network security and improve service quality

Initial storage pledge:

Future revenue based on sectors

Storage staking to cover early failures, fines, and fees

Initial consensus pledge:

Depends on the proportion of sectors stored in the network

Raising the cost of consensus attacks

The process is still under development

Authentication should be simple and open:

Verified users can improve network utility and storage product service quality

The network can be made more decentralized by adding a social trust layer:

Utility-driven social networks are more difficult to centralize than resource-driven networks

Network abuse can be minimized through limited trust, transparency, and accountability

Sector block probability:

Randomly drawn, but depends on the sector's share of the network's weighted byte power

Block reward size

Network weighted byte hashrate and base rewards are based on smoothed moving averages

This pledge provides a minimum service guarantee for storing user orders.

The pledge should reflect the actual consumption of on-chain resources by storing transaction orders:

This raises the cost of self-dealing

This is optional and specific to storage order transactions, separate from per-sector pledges.

Use block rewards as collateral to lower initial collateral requirements

All block rewards before the sector commitment is completed may be destroyed

Sublinear rewards unlocked to incentivize miners to fulfill their commitments

Miners need to stake tokens initially

But it can be obtained from many places (exchanges, lending, space race, etc.)

Many lending scenarios have been launched and are being developed as a result.

The principles and goals of network initialization scheme and mechanism design are two different issues

We are still exploring different solutions to allow miners to smoothly add early storage

We neither control the token price nor predict its trend

Market prices are the result of the judgments and actions of all participants

It is meaningless to talk about price without the dimension of time.

All participants in the economy make decisions based on their own expectations and cycles.

If a sector is in a faulty state, the miner needs to pay a daily sector fault fee for the sector in the faulty state.

As storage miners’ reliability improves above a reasonable threshold, the risk posed by these fees will rapidly decrease.

If a miner fails to report a fault and an unreported fault is discovered on-chain, the miner must pay a sector fault detection fee for potential malicious or dishonest behavior.

If a sector is in a failed state for too long (14 days), the sector is terminated and the miner must pay a sector termination fee (on top of the sector failure fee for several days and potential sector failure detection fees)

Miners can also choose to actively terminate the sector, but they need to pay a termination fee. If there is a storage order provider collateral, it will also be destroyed.

Storage users will not receive compensation for lost files

This is partly because the protocol cannot directly distinguish between storage users and storage providers.

However, miners will have strong incentives to ensure the stability of network storage, and even higher incentives for user data protection.

If users are worried that the incentives of the protocol are not effective enough, they can choose miners who have pledged more transaction collateral to trade.

When Fil is destroyed, the tokens are sent to an address that cannot be used

This reduces the circulating supply of tokens

Many years from now, the future community could choose to reconfigure those tokens through Filecoin Improvement Proposals (FIPs) and hard forks

Require storage miners to remain operational 24/7

This includes consensus, storing data, proving data, receiving data, serving data, etc.

This is a cloud storage service so it must be running 24/7

We wanted to compete with other cloud services with 99.9999% reliability, but the initial penalty mechanism assumed much lower reliability than this.

This is especially important for the top 70% of consensus hashrate.

Urgent feedback from consensus

Problems will happen, so miners need to be forewarned and fix them quickly.

Some issues may take 1 or 2 hours to fix or upgrade

Since the system is constantly improving, there are no final parameters.

The protocol will continue to improve, and new features and new understandings will gradually evolve

Mainnet parameter suggestions will be released soon

The initial proposal of the economic team actually suggested that different BsaeFee and Gas be calculated based on different message types.

However, this solution has other engineering constraints and complexities: it can be considered as a subsequent FIP

Design goals and constraints

On-chain messages consume on-chain resources, so the Gas and BsaeFee used by the messages are destroyed.

There are some incentive issues related to expensive messaging externalities and DOS attacks

The message sender pays a limited fee directly to the miner, which is unrelated to gas usage

When the economy thrives and generates value, participants in the economy profit

Like a single industry country with a currency

There is a net inflow of raw materials (such as hard drives, labor, and collateral in Filecoin) and a net outflow of services provided (such as file storage, certification, and retrieval in Filecoin)

If the product or service provided is more valuable than the raw material inflow, value is created

Whether this value can be reflected in the exchange rate between the country's currency and other legal currencies depends on supply and demand.

For example, when network utility is low, quickly generating many tokens can lead to devaluation.

Storage transaction revenue determines miner income. These transactions are heavily subsidized by the network in the beginning, but the subsidies are given to stable and effective storage to generate real transaction income in the future.