How the math work out for Storj?

Hello, I read it Storj storj about ~2.8x more of the original data (to be exact 80/29).

But how does that work out for Storj, if you charge customer $4 per TB, but will give node operator 1.5 * 80 / 29 per TB (about $4.13793103 - which is more than $4).

I don’t get this part…

Well 2 things. It starts at 80 pieces, but they drop off when nodes disappear until repair kicks in. The actual amount drifts between 55 and 80 roughly. So on average, they do make some profit on storage. But they have a much bigger margin on egress as well. There is much less overhead on egress and they make $7 and pay out $2 to nodes.

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Look like a very thin ice to walk on, I do hope they succeed though…

Not thin at all. The storage is secured, and the margin that earns, has space to be even safely lowered in the future …

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Haha, if you think that is bad, wait until you learn about how STORJ does S3.
Or read a quarterly report to see that nodes are only a small fracture of total costs.


Hello, are you reference these STORJ Token Balances and Flows Report: Q4 2023? I don’t understand a single thing about this report :frowning: - Is it good or bad?

I guess the question really is: will Storj stay around, should I invest more in Storj…

all in, bro! :joy: its a token for settlements, not investition.


Yes. You may notice two things.

A: Line number 9 → Net network operations or STORJ nodes is only a small percentage of total spending.

B: Line number 18 → They used 34M tokens this quarter and have 59M left.

For A, I don’t know why they sell so much tokens. According to STORJ employees, they are not spending it on Lambos. I could imagine that offering S3 to customers, by having S3 endpoints is expensive. Offering S3 is pretty expensive even if the storage itself would be free.

For B, you would naturally guess that if they continue like that they will run out of token in half a year. But then you are forgetting two things. First STORJ tightly glued to the BTC exchange rate. You may think that it is stupid for a utility token to correlate with BTC. Well, it is what it is.
Second, even if STORJ runs out of tokens, they to a lot of business with fiat. So even then, they have lots of money left. But the fiat side of STORJ is a secret they can’t openly communicate, just like any other business. Well unless you are a publicly traded company, then of course you have to report that stuff.

I try to read the report, still not able to understand most of it, but one thing stood out: line 14.

How could Other take up 31.1, even employee only take up to 1.7 and pay to node operator only 0.6.

I think it only make sense when Other is less than 1?

I think this report does not look transparency enough :neutral_face:?

Could anyone from Storj confirm this?

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Ahh that one is easy. It is very clearly described in this paragraph:

Detail re “Other” Category

It is transferring tokens to fiat to pay for things.

How dare you even think that?!
STORJ is so transparent to you and this is how you thank them?
You do realize that they don’t have to publish this token report?
They just do this out of generosity.
You should be a litte bit more thankful.


Hello, I missed that in the section right below, sorry about that (but they write so much I can’t process that much English).


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my guess is, they exchange it for cash, and sitting on a cash, because they said they dont do anything with the token, so if they say “Others” means its changed to cash. After 2-3 quarters, when the all tokens will be unlocked, they will need that cash to buy tokens back from market to pay SNOs with that tokens. Real fun will begin from that point. Because it will also corelate with situation on the market soo what can happen is rising prices of token. So If You are gambler You can bet on that, i see You have the urge :smiley: @kocoten1992

No, sorry, you was speaking for yourself, I care mostly about if Storj have customer, I don’t care about crypto market increase/decrease at all.

My thinking is: if everyone jump in crypto market and want more money, someone is going to lose, but if other want other thing rather than money (storage - in Storj case, value exchange - in my case), then there will be a sustainable market…

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You are missing something. It is a self balancing thing.

If the value of the token rises, the amount of tokens they have to pay you goes down, so they have to buy less tokens. So as you can see, STORJ could not care less about the price going up. On the contrary, the higher the price, the higher the ICO money, VC money, whatever you wanna call it. You know, real money, $$$, the stuff that you can actually use to buy food and cars.

What you say would only be true, if STORJ would pay nodes in x STORJ token per TB. But they pay you in $ converted to STORJ tokens.

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What I struggle to understands is: what is the scenario where token price does not skyrocket as the service grows?

Storj is a deflationary token by design. The supply is fixed. Service grows, so payments to node operators grow. And it’s not a closed system — value is poured into the system through outside source — customers. Hence, value of the token will have to grow.

Maybe this is extremely dumb, I don’t fully understand token economy.

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Well for now (and I think one more quarter?) Storj has been unlocking ‘free’ tokens at around 30mil per batch? So they were only selling, never buying. And with the Q1 2024 unlock… they’ll still have a couple years worth of SNO rewards in the bank?

But even if they start buying: I don’t see why the token price would rise. Like to make up some numbers… say every month Storj pays SNOs $100k in tokens. SNOs sell those $100k to the market (actually back to Storj). That loop can go on for years. Storj can profitably be making $$$ from customers and doing quite well… but the token price doesn’t benefit from them making a profit, right?

Maybe customers add some buy pressure. Maybe SNOs hodl. Maybe some wallet seeds get lost. But that would account for a slow growth: not a skyrocket.

I don’t know: I haven’t been paying attention :slight_smile: . I think SNOs should sell their entire payout monthly… and when you’re selling 5 minutes after getting your tokens then price doesn’t really matter.

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Right. I guess as long as total SNO payments don’t exceed available token value it can stay stable. Storj wants to keep payments to SNO at $130k/month, so so the forceable future this will be working.

Completely agree, no question about it.

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Getting a crypto, and not to gamble with it!?
You guys don’t know how to have fun :grinning:


On the serious note, I think about it this way: If I did not receive storj, but got USD instead — would I have spent that money to buy storj to gamble on? Probably not. I would in most likelihood have bought something else, something significantly more volatile. Hence, I sell it immediately.

But true, I don’t gamble at all.


Don’t worry, it is not you being dumb, it is the market that is dumb.

Currently the price is mostly pegged to the BTC price.
This is because people use it as a speculative Investment instead of a utility token.
Even some node operators claim to be hodler. These guys and other gamblers are the reason for this.

It is a zero sum exchange with a self balancing act so it does not matter how much the service grows. Let’s assume tomorrow we get a new huge customer. Customer pays 1M$ per month. Total stored amount in the system doubles. Now there are two options.

  1. The new customers pays in cash:
    With a fraction of that 1M$, STORJ will buy tokens to pay us nodes. Double the amount, means they have to pay us twice as much.
    Because of that, next the token price also goes up for the next month.
    Let’s say also double.
    Next month, STORJ gets again 1M$ in cash from that customer. Because the token price doubled, they only have to buy half as many tokens as before. So the price stayed exactly the same for them. It is still 1,5$ per TB, no matter if the token is worth one dollar or 100k.

  2. The new customers pays in tokens:
    Probably not very likely that any serious company would pay in tokens, but whatever I have heard dumber things in my life. So the customer would buy roughly 909090$ worth of tokens, which would get him 1M$ worth of tokens (there is a 10% bonus). He would have bought said tokens from other nodes that sold their tokens on the exchange. So the price would stay the same. Or if the nodes play hodl instead, the price will go up. What happens then is they will get payed less next month, and the customer would have to buy less tokens for the same amount of storage. You see this is a self balancing thing.

You see, some very things are always true, no matter what happens:

  • STORJ pays you tokens worth in $ not in tokens
  • Nodes playing hodel are not very smart. They will jank up the price which will then result in lower payouts for them. That only makes sense if you think of the token as an investment instead of a utility token. Which based on the exchange rate, most people do. That is why it correlates with BTC so strong.
  • STORJ likes hodlers and a higher price. The higher the price, the more real $ they get for their initial 420m tokens.
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