Held-Amount and Payouts

New to working with held amounts? No worries! If you just need to see the schedule, you can skip down to the bullet list in the second half of this post. Otherwise, a good place to understand the underlying reasons for having held-amounts at all is our blog explaining why Churn & Burn is Bad for everyone

The short explanation is that the earning potential of a node, our network performance and - most important - file durability are all strongly affected by node operator reliability. We do everything we can to reward a healthy supply/demand balance, including the encouragement of “graceful exit” by storage node operators (SNOs) leaving the system.

You don’t need an upfront stake to start earning STORJ tokens. Instead, there is a 9-month period in which a percentage of earning are placed in a holding account. The funds stay there until a SNO chooses to leave the network. At 15 months, a portion of the balance is returned to the SNO, while the remainder is held indefinitely.

So, that means that if a SNO uses the graceful exit function when leaving the network, the funds are returned to the SNO when leaving the network. We want all departures to be graceful of course! If a SNO leaves without completing that graceful exit, then the funds will be forfeited to offset the cost of data repair caused by the storage node exit.

A helpful way to understand what this all means to you is to check out the table below, which shows the withholding model. The function is structured with a tiered reduction in withholdings as time goes by.

  • Months 1-3 : 75% of storage node revenue is withheld, 25% is paid to the storage node operator
  • Months 4-6 : 50% of storage node revenue is withheld, 50% is paid to the storage node operator
  • Months 7-9 : 25% of storage node revenue is withheld, 75% is paid to the storage node operator
  • Months 10-15 : 100% of storage node revenue is paid to the storage node operator
  • Month 15 : 50% of total withholdings are returned to storage node operator, with the remaining 50% held until the node gracefully exits the network

The withholding model is designed to:

  1. Incentive and reward long term reliable storage nodes

  2. Ensure with fairness that nodes choosing to leave the network do so in a way that’s the least damaging to the network

Want to dig deeper? We’ve collected the most common questions around why and how the process was implemented at https://storj.io/blog/2019/01/sharing-storage-space-for-fun-and-profit/

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The withholding and payout is one thing. . . The other is the increasing loss of value of Storj coins. What Storj has lost in value in the last few days, is quite remarkable. But if you have a look at the loss in value since its introduction . . ., the value can hardly fall much lower. The profitability of many nodes also depends on the value of the Storj coin. Since the introduction of STORJ, I have not seen a similar decline in value for the dollar or the euro.

Have a look here: https://coinmarketcap.com/de/currencies/storj/

You decide whether you take on that market risk. You can sell your tokens the moment you get them if you don’t want to take the risk.

The current drop has nothing to do with Storj btw. It’s a drop seen throughout all the crypto currencies. Unfortunately crypto currency has started to correlate with the stock markets and we’re seeing the impact of a certain human bug going around. Not much we can do about that, though I’m sure that in time it will recover.

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