I’m also confused.
I’m talking about tokenomics (the economics of the token), the first post is:
The thread’s title is Open discussion / ideas for updated tokenomics.
Have we gone off into the profitability discussion again? There isn’t anything to discuss there: adjust the price you charge to the clients to reflect your expenses to the SNOs + other infrastructure running costs, I can’t even believe I had to type that.
A change of the payment system using a service provider will not necessarily make things more expensive.
First of all it is important to know, that the currently used token payment scheme is not free at all and has its costs for Storj and the SNO:
Storj bears the transaction fees on L1. These are unpredictable and can be very high. Also from what I assume based on what I have read, the Storj process of payment is a lot of manual work so there is also costs associated with that.
SNO bears any other costs and fees. And from my own experience with exchanges I can tell there are: 1. Costs induced by market price changes, 2. Spread, 3. Transaction fees and finally 4. even withdrawal fees to a bank account.
With a payment service provider everything is different. The cost are fixed and predictable. No more worries if SNO gets a payout or not.
If I get paid directly to my bank account, there is no volatility, no spread and no withdrawal fee. I would be happy to bear the low fees such a service imposes for the sake of being paid directly into my bank account which would mean there would be no cost for Storj. I would still save big with all the other actual costs vanished. Also I would not have to maintain an additional exchange account for the sole purpose of Storj. The provider would let me choose where to get paid and which currency.
Storj could save big too, because the entire process is automated. The payment provider collects and maintains all required information including what is required by regulations and compliance. They even do the invoicing. BTW, this is not only a solution for payment to SNOs. Any payment like worldwide salaries can be executed with such a provider.
And finally the option to choose from is not to stop as long as there are STORJ reserves left. As long as they have reserves, they could continue like before even though it is not recommended. But if switching to such a payment provider they could always sell the STORJ they need to make the payments.
So in total with such a automated mass payment solution it appears that anyone would profit because it can save money and reduce costs, time, manual work and resources for either Storj and the SNO compared to the actual token based system.
The question remains: Why keep using the token that has served its purpose? Why clinging to it when there are other solutions that may be already established, cheaper, better, more predictable and require less work?
The token still serves its purpose to pay SNO. It’s easier to pay them in crypto than in Fiat. If they pay in Fiat the have to process the payment in other ways and even have to pay fees to send money in foreign countries or currency. And currency exchange have pretty high fees sometimes.
That’s why I am talking about using a payment service provider for that like almost every other company that requires a global mass payment solution does.
And it is also why I disagree with your comment. Just as an example: A company I won’t name here lets their global workforce cash out US$ to their bank accounts multiple times per day with less than $2 minimum and transaction fee per transaction. All done fully automated by the click of a mouse button. Payment to SNOs by STORJ token is obviously not easier than that.
As previously said I would be very happy to bear the transaction fee as the cost for receiving STORJ token, converting and finally withdrawing it to a bank account are much higher than that.
Which payment solutions now working with Russia, that on the 1st place by node count? )
You are going around in circles. Storj token is an integral part of Storj Inc. Dropping it would seem like a rug pull and SEC will investigate. Besides the investors (people that bought the token) early on are relying on Storj’s promise to keep using Storj as the utility token its meant to be.
I’ve made a couple posts with earnest ideas. So I hope that means this doesn’t just seem like arguing…
The Securities Exchange Commission has nothing to do with the token: it’s not a security. Maybe NASA would investigate, because the token could no longer reach the moon? 
People who bought the STORJ token aren’t investors (though Storj is a private company that does have real investors). And by definition: investors don’t buy utility tokens: they’re named that way precisely because their primary value isn’t an expected rise in price. And there’s nothing special about STORJ: it can be dropped or replaced at any time: remember we started on SJCX…
Your image does contain ideas that other projects use with their token: so it’s some fresh ideas to consider: awesome!
Дело пахнет скамом, а как иначе это назвать
I like a lot of that brainstorm @Roxor. There’s a lot to unpack there. 
Further Carbon credit representation/integration/certification has some massive fundamental advantages, as per say just selling credit offsets is more than half of Tesla’s current revenue.
ETH was born of smart contracts, and similarly Chia. However, I’m not a proponent to the premise of proof of space; therefore, appreciate the yin/yang synergies you inferred/mentioned. Good stuff.
Lil’ ole STORJ can be a big part of world ecological cooperation n’ stuff, I’m feeling all fuzzy now.
2 cents,
Julio
Are there any guardrails that this brainstorming session need to take into account?
Excellent question, but I am afraid you might not like my answer:
Yes indeed, sending funds to Russia could pose a challenge because they invaded the Ukraine and their war on the Ukraine is ongoing.
This is the cause why payment processors might be reluctant to remit funds to Russia at this time. But I do not know each and every payment processor in the world, so there might be some that still offer such a service. This would be a matter of due diligence and negotiations.
However the bigger issue is that there are official sanctions in place against Russia. With a payment processor who performs all required regulatory and compliancy work and checks, a company is probably better off at times and on the safe side of the law.
My original idea was always to have such a solution work for the majority of SNOs. I have no reservations to let SNOs choose how they want to receive their funds. So chances are, Russian operators would opt in to keep receiving the funds as crypto currency, e.g. a stable coin. But as authorities are well aware that crypto currencies are used by Russia to evade sanctions, in my opinion it is only a matter of time until transfers of crypto assets will be even more restricted or even banned. There are already restrictions today to prohibit any form of dealing with a person who is an asset freeze target, which includes making assets directly or indirectly available to them. Crypto assets fall within this category which means that sending crypto currency to individuals, companies or exchanges targeted by the sanctions is already prohibited.
In the light of the Russian war against the Ukraine, their aggressions against and aggressive attitude towards other countries and the sanctions against Russia in place, honestly I have always wondered 2 things: 1. How Storj makes sure that the anonymous wallet address of a Russian node is not associated with a sanctioned entity and 2. why is Storj with all their values still doing any business with and in Russia. If it was my decision, I would have long ago terminated business in Russia, with Russian individuals and companies completely like many other companies that have exited Russia entirely due to the war Russia has started. And I would have banned any Russian node and node operator already forever.
Yes indeed. Because the situation remains the same and I have not changed my mind when I try to anticipate the future.
I see this exactly how @Roxor has answered. How come that STORJ token is an investment now? I have linked already to a recent discussion where it was said again like always in the past the STORJ token is not an investment but a utility token. And obviously is use cases besides paying for storage are limited. They could be expanded to pay for GPU compute and Object Mount though.
So are you telling me the STORJ token is indeed an investment object which means people are holding it and should hold it for returns by selling it? If so the company should be indeed interested in increasing its value.
I am also with @Roxor that ceasing the use of the token can be done. It is a matter of how it is done. Switching to an already established token like a stable coin could offer so many new options and would not make any difference when Storj needs to buy tokens anyway.
Times are are different now compared to when the the token was invented. The company is running out of tokens and obviously its use is limited otherwise we wouldn’t be brainstorming over tokenomics. The initial idea was great but it wasn’t embraced enough by others and additional potential use cases which makes the STORJ token and the company dependent on a main single purpose.
I am again with @Roxor here:
Now when the company needs to buy back tokens the chosen path is getting more risky. The STORJ token with market prices instead of a fixed value was always risky as the price determined how long the reserves last but at least the company had reserves. Now they are running out of reserves and need to buy back this has changed and this obviously does not make any sense so the entire approach needs to be reconsidered.
As far as I remember, STORJ paid for it‘s acquisitions with STORJ tokens. Also, they are/were paying their employees at least partly in tokens.
I expect as an employee or board member you will not sell every STORJ that you get immediately as you believe in the companies growth. Also many SNO’s don’t do that.
For stakeholders that have a huge bag of tokens, that‘s indeed an investment, even if it’s not defined like that by official institutions.
If nobody would be thinking that STORJ token has any value, everybody would sell everything immediately and price would drop to 0 very fast. So obviously there are many people treating the token as a kind of investment right now.
So please let’s come back to the intended discussion of this thread on additional usecases / tokenomics of the token instead of discussing the whole existence of the token.
STORJ was used to pay Storj Labs investors: “15.1M to pay early investors who were involved with the company prior to the 2017 token sale” as per STORJ Token Balances and Flows Report: Q4 2020
Is it possible to burn STORJ tokens? the idea is to dedicate a percentage of every storage fee to buy STORJ tokens on the open market and burn them permanently, creating a continual deflationary loop tied directly to the platform revenue. This would incentivize holders by linking token scarcity to real network usage.
Maybe they should have sold immediately. Look,
The token value is not tied to the success or worth of the company, the value is not expected to go up and it should be irrelevant for for the operation. So there shouldn’t be any investors or holders:
As token price is not tied to the company’s success but to supply and demand. So when token holders or “investors” expect higher prices, where can they come from? I can see only that they come from Storj when they start buying back tokens and the holders and “investors” will be able to control the supply and Storj is forced to buy. This makes the value of the token suddenly relevant for the operation of the company.
The quotes are showing that everybody including company officials have said in the past that the token is not an investment but a utility token. So what is it really? Does it turn out now that despite the companies claims to be only a utility token, it is in reality an investment asset? This makes a real difference as suddenly the token value does matter.
With an existing stable coin like USDT or USDC this whole discussion about token prices and value would be obsolete and immediately eliminated for SNOs, the company, “investors” and literally anybody else. This would achieve the originally intended goal that the value of the token does not matter.
In my opinion it makes a huge difference for imagining use cases if the value of the token matters or not. But also as I have said before there is no sense in creating use cases for a token that is obsolete or nobody is interested to use. That’s why the tokens future shall be part of this brainstorming about its use.
If anyone has questions about what the token is or how it functions please visit https://www.storjtoken.com/
Token Reports can be found here Storj Token
I appreciate the wide variety of thoughtfulness and angles of approach in this thread. This is where having an extremely smart, creative and engaged Community really shines.
While some ideas may make sense in theory, we need to be mindful of constraints placed by current regulations etc. Some of this has been discussed in previous threads; thank you to @jammerdan for listing some relevant highlights.
Please keep the ideas coming.
The problem is there are so many hurdles associated with the use of the token and cryptocurrency that its use compared to well established payment forms is much limited.
It start with using the token as payment for storage as an SNO. For my liking this comes with way to many uncertainties so that it is not worth it:
And as a company I can imagine the situation is even worse and that’s why you would want to stick with fiat and traditional payment instruments that are well established and approved and where a CEO will not have to justify their use if there are issues with it.
And one more thing: Yes there is a 10% discount. But a company with larger storage requirements surely can negotiate individual discounts with Storj too without the requirement of using crypto. So the 10% do not help here either.
I don’t know if there is any DAX company that accepts crypto currency. And look, even Storj does not touch any crypto currency other than their own token. Alone that shows how limited their use still is.
Finding use cases for a crypto currency is basically what ever coin struggles with. If it was easy to create use cases that result in stability, utility and adoption of a coin, then any project would do it. But most of them fail.
At the end the STORJ token is just a token like hundreds other tokens on Ethernet. There is no unique feature associated and no ecosystem that makes this token a must have or a must use other than paying for Storj Object storage, Object Mount and GPU compute and advertise the token as payment option for these services.
Storj could also do a survey on their customers and ask them what is refraining them from using the Storj token. But I think the only good use case from this token was the early funding of the companies business.
There is at least a one use case for the customers to prefer STORJ tokens above fiat: some banks (for example almost all Indian’s banks) doesn’t allow automatic charges by payment processors (even Stripe is not allowed), they requires a mandatory 3D security code, which is not possible to provide during the automatic charge. So, these customers are forced to pay invoices manually after they receive a warning that the payment has failed. If they would use STORJ they would get not only 10% on top, but also can be not worry about blocking their account due to non-payment if they would miss two warnings.
Another one - for customers from Russia and Ukraine - their banks maybe blocked by Stripe, so the only way is to pay with STORJ tokens.
Well, well… STORJ is more than just a utility token. It’s a store of value, based on supply and demand for storage space, as it has a closed/capped market of circulating tokens. These tokens are directly impacted by the companies increasing revenue via demand; while both burdening the company, and defining it’s success. Going forward, all revenue streams the company has should be added to the tokenomics. Especially the $30 Million plus they used to do acquisitions last year, and their supplemental distribution of tokens to the former owners of those acquisitions - it’s an asset. Out the gate, they should be at least generating a 20% margin annually for the GPU etc. stuff - or they made a bad investment. You can calculate the liquidation $s used for these acquisitions as it’s all in the token reports. I’d estimate the original .50 ICO was primarily liquidated at an average under <.34 just by browsing those quarterly reports over time (Jesus, they actually liquidated all the way down to 22-24 cents in one of the last liquidation quarters). Additionally the supplemental payment was probably 15 million tokens for the gpu/etc. acquisitions.
They can’t say it publicly, but it is an ‘investment’ vehicle, and they know it. So add the other gpu/object mount payment options to STORJ, in fact add all revenue streams. Early adopters as the AI business is, know there’s investment acceleration and their demand, business segment alone generates more margin than storage alone. Pack it all in the token… Complete the synergy and push the coin, advertise it. Be responsible, and commit to some phrasing that the additional available coins will not be opened until full profitability or target coin value, and some time line.
Any company could buy 100 million tokens, and lock in at a $24 million cost right now.
The value of time kicks in, and it becomes difficult to get tokens to pay for storage/gpu/etc., thus the price rises. It’s a commodity coin, not unlike gold or copper. Gains on the coin are booked annually on their Balance Sheet at fair market value, and can affect their Income Statement via capital gains/losses. It’s definitely an asset of the company - you can’t just ignore it.
That push should raise the value of STORJ, increase/impact their Balance Sheet and they can liquidate more coins for cash needs in the future. All their business segments can contribute to locking in an future higher value, as customers demand and invest in their future needs. Any token increase is a source of revenue for Storj. While they accept fiat for services this coin still can be more widely adopted and continue to contribute significan gains.
If the burgeoning profitability of the new segments over the last year contributed less than $6 million, or a current value of about 25 million tokens I’d be disappointed. Over the next year I’d be looking to announce a token buy back or $100k a month - 400,000 to 500,000 STORJ per month. Let the segment with the most demand boost the token value, as the margin of anything not storage is obviously higher.
Frustratingly I can’t see the books, to actually advise anything, other than don’t liquidate the remaining treasury under .50.
As for the Russian thing, as I’ve said before, any large western prospects will shy away due to their security/availability concerns for that fact alone. Fix that, cap it - do something, you have enough operating headway now in current storage availability. It’s probably been a costly political harpoon for too long, check you customer exit interviews & their concerns as to why they didn’t sign on, other than SOC certification.
Advise us as to the progress on the phantom public network certification, that will have a definite impact the asset base.
5 more cents,
Julio
This is interesting. I am not aware of an automatic charge process similar to SEPA direct debit with crypto currency. Even Paypal has something like that.
It would be definitely interesting to have similar function with crypto available maybe it could be build with smart contracts or something.
But this does not remove all of the obstacles I have mentioned. For example transfer costs.
Storj could open accounts on the most used exchanges where transfer within exchange does not cost anything. I believe Binance does it this way. With this, Storj customers could transfer STORJ token to Storj without any cost.
But that and this
isn’t a requirement to stick to the STORJ token. It would not matter if customers from India, Russia or Ukraine pay with STORJ or Dogecoin. There is no unique feature within STORJ token that eliminates all the hurdles. Instead there are other coins which do that: Stable coins eliminate the volatility and are a store of value that maintains its value. Other coins have low fixed or even zero transaction fee.
So there it not just the question where STORJ token could be used there is also the question why STORJ token shall be used by customer and company when it has all those disadvantages associated with it that other coins could eliminate.
I mean, of course we can imagine that large corporations in theory can and could accept cryptocurrencies more widely. But the reality is, they don’t. I cannot pay with crypto at Amazon or BMW or McDonalds. And the guy who as sold 2 Pizzas for 10k BTC also gives an answer why: Fluctuating purchasing power.
The crypto thing remains a niche and is far from being widely adopted and used. And honestly Storj is not much of in a position to change that in a significant way and not with that STORJ token.
If however, they would start to remove the hindrances and obstacles that come with payment by crypto additional to the advantage of a discount, then users might be potentially interested in using crypto to pay for this service.
