Announcement: Changes to node payout rates as of December 1st 2023 (Open for comment)

Announcements
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Hello Storage Node Operators!

Important: This includes an announcement of changes to payout rates for storage nodes on all satellites, effective December 1st, and that Storj does not anticipate further payout rate adjustments for the foreseeable future.

Thank you so much for your continued engagement on the forums and elsewhere. Your perspective and insights have been invaluable, as we have gone through this time of change.

Since the changes made July 1st, (announced on June 27th) we have monitored the conversations in the forum and the health of the network and want to give an update on results we’ve observed thus far.

What we did

We announced on June 27th that there would be additional changes to payout rates for storage nodes.

Additionally, over the last few months we have sunsetted the Europe-North-1, and US2 satellites and paid out held amounts to storage node operators (SNOs) who operated nodes on those satellites.

What we observed

To monitor whether the changes to the incentive model would impact the health of the network, we have been monitoring the following dimensions:

Overall node count dimensions Measure on June 26th Measure on Oct. 11 % change
Count of active nodes on AP1, EU1, & US1 22,491 22,078 -1.8%
Median Daily Repair Bandwidth (TB) May 28 - June 26 Sept 10 - Oct 9 % Change
EU1 55.0 4.6 -91%
US1 27.5 12.4 -55%
AP1 12.9 9.05 -30%
Nodes initiating graceful exit (GE) or going offline by satellite Measure on June 26 Measure on Oct 9 Median +/- 1 Stdev April 17 - June 26
Count of nodes that called for GE in the prior 30 days EU1 133 72 89.2 +/- 15.4
Count of nodes that called for GE in the prior 30 days US1 107 73 87.9 +/- 13.5
Count of nodes that called for GE in the prior 30 days AP1 135 73 96.3 +/- 20.5
Count of nodes that went offline in the prior 30 days EU1 548 312 601 +/- 116
Count of nodes that went offline in the prior 30 days US1 613 290 634 +/- 128
Count of nodes that went offline in the prior 30 days AP1 537 313 609 +/- 128

This data shows a few important things:

  • Overall the health of the network has clearly improved since the last change to the incentive structure.
  • The net number of nodes has decreased only slightly over the time period.
  • We measured significant decreases in the amount of repair traffic on the network, showing that the stability is improving.
  • There was no significant increase in nodes calling for Graceful Exit.
  • The number of nodes that are going offline has actually decreased.

Based on the above statistics, the network has remained healthy and we are comfortable with moving forward with additional changes that are required for long-term economic sustainability.

Please read the following FAQ carefully as it details the changes we are planning to make. As always we would love to hear from you and understand your thoughts and/or concerns on these changes. You can share any thoughts you have regarding this in the forum.

The Storj Team

Q: What will the updated payouts be beginning December 1st?

A: We have decided based on the metrics we have been following and the input from the forum, to make the following changes to node payouts: The global payout rates for all Satellites will be as follows

This is the new payment schedule that will take effect as of December 1st, 2023 for all Satellites:

Payment Category Rates as of Dec 1st
Storage (per TB Mo) $1.50
Egress (per TB) $2.00
Audit/Repair (per TB) $2.00

Q. What impact does this rate change have on total payouts?

A: Since the change in payout rates in July Egress and Audit/Repair traffic have accounted for about 18% of total payout rates. So while it may seem like a dramatic decrease to cut the bandwidth payouts by â…” the overall impact of this decrease on total payouts is only a 12% decrease.

Q: Do you anticipate making further changes to the payouts?

A: With this change we do not anticipate a need to make further changes to the node payout rates for the foreseeable future. At these rates we believe that nodes can operate sustainably, and also that Storj can get to a point where we are operating economically as we pull down infrastructure costs, remove test and abuse data, and make adjustments to the Reed-Solomon expansion factor in the future. If it turns out we are wrong about the sustainability of these payout rates then we will of course adjust in order to maintain the health and performance of the network.

Q: What is the best way to proceed if I decide that the new economic model does not work for my situation?

A: If you decide that this new model will not work for you node we encourage you to take advantage of the new graceful exit that we have announced. Essentially you need to just call graceful exit and then wait 30 days before you can safely remove your node and receive your held amount. More detailed instructions can be found here.

UPDATE: We have posted an update here

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A: Since the change in payout rates in July Egress and Audit/Repair traffic have accounted for about 18% of total payout rates. So while it may seem like a dramatic decrease to cut the bandwidth payouts by â…” the overall impact of this decrease on total payouts is only a 12% decrease.

Where are these numbers coming from? I have 7 nodes, and the lowest ratio on any of them is 1:2 download to storage payment. Half of them are about 1:1, some a bit over. This would cut my payouts by one-third to nearly one-half.

Personal numbers aside, egress should be well-compensated IMO. The bottleneck on most residential connections is the upload speed. On top of that, some ISPs in the US charge more for uncapped bandwidth, and an SN will easily push you into the territory where you would need that. For example, Comcast’s second-fastest cable plan is 400 down, 15 up, with a 1.2TB cap. An SNO would need to pay them $30/mo to uncap it - that would require 20TB/mo for the storage alone to pay for the fee! And you’d be dedicating a noticeable chunk of your upload bandwidth.

I think the bigger issue is that it could have an adverse effect on network performance. If someone can lose every upload race and only lose 6% of their payout, you’re not really encouraged to invest in or optimize node performance. A node on an ancient Pi with the slowest USB 2.0 hard drive that never ends up winning an upload race (thus not really contributing to the network except maybe from a DR standpoint) gets paid 94% of what a fast node that wins every race gets? Is that really going to be good for network performance in the long run?

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I was expecting a further cut to egress rates but not quite this harsh and not quite this quickly.

It certainly makes it uneconomic for me to add any further space to Storj and you are essentially now asking SNO’s to run their Storage for 10 months largely for free when combined with withheld… I now expect to see further centralisation to Russia and more European nodes to leave at these rates - perhaps even @BrightSilence will remove some of his nodes at these prices.

You are certainly going to see NO node growth in Australia at these rates.

One can’t help thinking that the drivers here are to push the Commercial Network and push marginal operators to leave given the current free space and new nodes joining all the time.

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Since the whole model is supposedly “use what you have” the 30 day period is not sustainable for me. If I will need the space I will generally need to use it within 7 days.

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oof…anyway, im ready for the repair ingress.

lets hope this does not blow up our mission.

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Hmm, well the rate had to change but wasn’t expecting that low in one step :thinking: it’s a very blunt sword being used to rebalance the SNO population, that will be very concerning for customers. Can appreciate the position Storj is in, but closing new node registrations and paying more for nodes in under represented locations would of been nice to see as well.

I hope the numbers work in your favour, don’t really want to see the SNO’s pushed to a knife edge, so many have invested much time and effort in getting this far.

Will be interested to hear what @BrightSilence thinks, as they did options on what could happen and what might work.

CP

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I wonder how it would look to customers if 80% of the nodes end up in Russia.
It might rebalance the numbers but it certainly will not rebalance the geographic location.
Storj may well end up breaking some of their geolocation agreements at this rate.

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Thanks for letting us know with this announcement. It was obvious dat drastic price cuts were necessary to get more financially healthy. I do have a question though: did you also think of how to attract new SNO’s in the future? In the past, the balance between SNO’s and customers was way off, because of the extreme subsidy SNO’s got, thus making nodes very viable. With these new (more realistic) prices, it became less interesting to spin up new nodes. What organic growth of the network are you aiming for? And is it possible that the growth of amount of data stored outgrows the total network size any time soon?

Thanks again for the headsup and keep up the good work :blush:

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I don’t think numbers of [stable] nodes inversely correlates with cost of living.

It is only vocal minority of a handful of users here who complain that the node payout does not take their kids through college.

Vast majority of other operators who understand the purpose of the project still see it as finite payout for zero investment and continue running nodes.

This is confirmed by the stats presented in the top post.

In fact, this price will improve filtering, cutting out transient get-rich-quick nodes that would not have lasted anyway and attract stable operators. Net win for the project.

The only reason egress is paid is to provide incentive to not throttle the node. That’s it. If incentive to not throttle becomes the whole reason people join— it’s miscalibrated and shall be changed. And it was. Win-win.

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Not cost of living - cost of energy is the main one.
https://storjnet.info disagrees with you. There has been substantial change in the countries with node growth and node loss since the pricing changes started.

I don’t know if you follow the homelab scene or not but people are reconfiguring their homelabs to take account of energy costs in countries where energy cost is high.

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I resent this comment. I made between $6.00 and $7.00 last month and I was ok with that - hardly “get rich quick”

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Yes, but this only matters if you would not have that expense without node. Which is not how it was intended. If using the node as designed — to share unused resources — energy cost is zero. Stuff is already spinning.

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Then what’s the problem? 7 or 5? It’s more than zero ->> profit.

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As I said - people are already reconfiguring their homelabs due to the energy cost. Storj was a way to subsidise that but is becoming less so.

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I can do other things with the storage that are now more profitable than Storj after the changes.

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And that’s the point! If you have other use for the storage — it’s not “unused resources”.

For node longevity the payout shall not be instrumental so to speak. Otherwise people will switch, like you, there willl be more churn.

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As i have said many times I do not believe in subsidizing a for profit company with free resources. There are far too many other worthy projects out there deserving of time and hardware that aren’t trying to make a buck off me.

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I remember. And that’s fine.

To me it sounds irrationally greedy. “If I can’t use these resources — then nobody will!”

I on the other hand don’t mind donating unused resources. I would not do otherwise anything else with them. Why should I be against anyone making use of it? Especially if it pays back for the trouble.

The fact is — most snos don’t care about payout, as evidenced by available data.

I think about it as recycling bottles. You get ten cents deposit back — but this is not why you recycle.(please let not discuss feasibility and economics of plastic recycling)

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Not true. I make resources available to other projects - just not for profit ones. I’m not against sharing resources. I’m against helping others make a profit at my expense.

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Documenting network stats here.

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