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What problem does Filecoin want to solve?
As a brand-new data storage and distribution network, the Filecoin network expects to provide a roughly distributed, efficient and powerful infrastructure for human information, and store valuable information in the wave of Web3.0.
As the wave of informatization continues to advance, the gap in demand for value information storage created by humans will become larger and larger. The above figure predicts the scale growth effect of global storage data growth. Currently, the top five centralized storage service providers in the world control 77% of the storage market. Any challenger who wants to enter the storage track needs to compete with top competitors in market popularity, equipment stability and potential user stickiness. There is no doubt that this kind of challenge is tantamount to hitting a stone with a pebble.
The Filecoin network currently has enough popularity and corresponding infrastructure in the storage track, and has the potential to challenge the giants of traditional centralized storage service providers. It launches an open participation model. Any competitor who wants to store effective information for human beings can join the Filecoin network as a storage node, as long as they have enough hardware equipment and can connect to the Internet.
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Deep into the underlying logic of the Filecoin economy
The Filecoin economic model is based on data storage. Storage miners play a central role in ensuring consensus on the chain and providing storage services. The Filecoin blockchain uses its block rewards to subsidize consensus participation on the chain and provide available storage services. The current main source of income for miners to participate in mining.
The life cycle of a miner, create a miner on the chain, obtain tokens and commit capacity to the network, start producing blocks when the minimum miner size is reached, conduct transactions with users, upgrade committed capacity sectors to sectors with transactions and get additional of transaction revenue, declare and fix bugs.
Most unrestricted blockchain networks require resources to participate in consensus. Filecoin must also contribute resources to obtain security. Filecoin storage miners are providers of storage services and maintainers of consensus on the chain. Like many other blockchain networks, in order to ensure storage stability and network consensus security, storage miners need to pledge a certain amount of tokens when adding sectors. Rewards for the Filecoin Network
On this basis, in order to minimize the burden on miners, the Filecoin network has designed three different pledge mechanisms:
1. Initial pledge: The initial pledge consists of two parts: storage pledge and consensus pledge. The storage pledge must be small enough to allow miners to join the network while being resilient to early failures, fines, and fees. Consensus pledge depends on the sector's weighted byte computing power (QAP) and network circulation supply. Equivalent to 20 days of block rewards + a share equivalent to 30% of the circulating supply of FIL.
2. Block rewards as pledge: reduce initial token pledge requirements by locking up block rewards. In order to ensure incentive compatibility as much as possible, Filecoin will punish miners who fail to meet the commitment deadline. Therefore, the block reward unlocking scheme is a necessary sub-linear release realized by a short-term delay plus a fixed-term linear release. The initial parameter is that the unlock delay period is set at 20 days + the linear release period is set at 180 days after the delay period.
3. Pledge of storage transaction providers: Establish an incentive mechanism between miners and users to make miners stand out in the market. The agreement requires a minimum pledge to provide a minimum storage guarantee, and if the transaction order withdrawal is terminated, this part of the pledge will be penalized.
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Mining the core elements of the economic model
Filecoin officials believe that many project parties simply decay exponentially. This economic model can only provide short-term economic incentives, but for the Filecoin distributed storage project, if this model is used, it is very likely that storage miners will get Excessive investment in hardware for mining with block rewards. After consuming these early block rewards, the cash out is completed, and the network will no longer be operated and maintained. This will undoubtedly lead to the loss of user data, and it will not be possible to complete long-term safe and effective storage. The miner nodes of the network storage also have no extra motivation to improve the network, forming a vicious circle, which may eventually lead to the premature death of the project.
After Filecoin's own island economy is formed, it is necessary to obtain the common pirate token FIL if it wants to trade with island producers, but the over-issuance of FIL will undoubtedly directly or indirectly damage the interests of all participants.
Therefore, the official decided not to use the traditional time-linear minting of FIL coins, but innovatively adopted the "block reward benchmark minting" method closely related to the network utility to estimate the network utility.
The biggest purpose of this method is to make the speed of FIL currency output positively correlated with the growth rate of network utility, which is more in line with the economic laws of distributed storage projects and more sustainable. The method of "block reward benchmark casting" is chosen to encourage the consistency of storage landing and long-term storage investment rather than just quick encapsulation.
At the same time, this method will increase the block reward as the total storage computing power of the network increases. This not only preserves the structure of the original exponential decay model, but also improves it during the initial stages of network startup. Once the network reaches the baseline, the same block reward is issued as in the linear decay model, but a portion of the block reward is delayed if the network does not reach a pre-established threshold.
According to the design of the Filecoin economic model, the "simple casting mechanism" allocates 30% of the storage mining quota, and the "base casting" allocates the remaining 70%. 30% simple minting can provide reaction force and anti-fragility when the network is impacted.
The baseline capacity for minting shares can start from a small percentage of global storage today, and then grow rapidly to reach a higher but still reasonable proportion of global storage in the future. Initially, the network baseline will start at 1EiB (a figure that is less than 0.01% of today's global storage capacity) and grow at a rate of 200% per year (higher than the 40% annual growth rate of world storage capacity). When the storage provided by the network is approximately 1-10% of global storage, the community can collectively decide to slow down the growth rate.
Filecoin tokens are finite resources. As with consuming any public pool resource, the rate at which tokens are generated in the network should be controlled to maximize the net benefit to the community. The purpose of benchmark casting is to:
1. Reward participants based on the storage provided instead of simply giving rewards exponentially based on joining time.
2. Maintain a relatively stable block reward flow for a longer period of time based on network utility valuation.
In short, the economic model introduces a "hybrid index casting mechanism", that is, part of the rewards come from simple exponential decay "simple casting", and the other part comes from the "baseline casting" of the network baseline. The total reward in each period will be two sum of rewards.
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The Token Distribution and Penalty Mechanism that Investors Are Most Concerned About
Many users who invest in Filecoin are most concerned about the release cycle of FIL, which is related to their investment return cycle. This report details the token release and reward and punishment mechanism.
The official understands and adjusts the incentives for participants based on the concept of a sector’s one-day income. The reward release mechanism is that the unlock delay period is set to 20 days, and the linear release is 180 days after the delay period. This means that the obtained block rewards will be locked for 20 days first, and then released linearly in a 180-day period. It has laid an economic cornerstone for the stable development of the entire network.
Maintaining the security and stability of the storage network is the fundamental purpose of many previous testnet operations, including the current space test. The real security and stability is based on the technology of due diligence of global miners, but if the miner nodes fail to do their due diligence due to evil or negligence, they will also be punished. The unit of punishment is mainly carried out in the mode of sector.
Sector Fault Fee: Equivalent to 2.14 days estimated block reward.
Sector Fault Detection Fee: Equivalent to 5.00 days of estimated block rewards.
Sector Termination Fee: Estimated number of days a sector has received block rewards, up to 90 days.
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Points worthy of attention in later project development
1. The Filecoin network will refer to BTC's BIP and ETH's EIP models to design its own FIP method to govern the future direction of the network, but the details of the FIP process have not yet been determined. After the main network is launched, all parameters and mechanism updates will be determined through FIP.
2. Develop the Filecoin lending model. Token holders can lend their tokens to miners as a third-party pledge, and cooperate with miners to disperse market volatility risks and obtain benefits.
3. General smart contracts may be adopted. The improvement of the Filecoin blockchain will allow the use of general smart contracts and on-chain state machines.
4. Encourage storage miners to commit capacity to the network when there is no storage demand. Sectors without transaction orders are called easy-to-promise sectors. As long as miners prove their supply and storage operation and maintenance capabilities, they can obtain orders when there is a storage demand, thereby obtaining additional transaction revenue
