Open discussion / ideas for updated tokenomics

[Toyoo]

This decision was made faster than I expected! Happy that you see a path.

Though, I do hope you will offer some tax advise, because explaining staking to my accountant will be a challenge

[snorkel]

I doubt that these 2 addons, staking and buyback, are enough to attract others, not just Storj and node operators, into token’s circuit, but we’ll see. Nice to see that something is done to ensure token’s value over time, however.
Maybe offer staking for clients wallets too, and the possibility to reclaim the funds without x days delay, to make them keep tokens in their wallets, stake them and unstake all or a portion to pay for storage, whenever they want.

[jammerdan]

This

Aligning growth with value.

officially turns the utility token into an investment token.

And this

Storj Node Operators (SNOs) will be able to stake STORJ tokens directly into the contract.

Storj anticipates the current held amount system will be folded into the new staking mechanism.

could as well mean that future SNOs have to stake a specific amount of tokens to be able to run a node.

[nerdatwork]

@jammerdan

officially turns the utility token into an investment token.

Yes, which is why is important

[snorkel]

Maybe… change the currently held back ammount system with this:

• for running a new node, the operator must send Storj tokens equivalent of 25-50$ to a staking pool, after the first month, and lock them there untill he graceful exits. This will get him the Vetted tag ON.
  So, he stays at least 1 month in the unvetted section of the network for free, and this allows him to familiarise himself with running a node and correct the problems of a new setup, etc.
  After 30 days, if the sattelites give the “OK, your node past the vetting process”, the SNO can choose to get the Vetted tag by sending some tokens to the pool, a tax for each satellite he chooses… now I realise that you need some way to differentiate the tax for each satellite.
  Maybe a pool for each satellite, with it’s own staking rewards based on it’s own ecosystem?

[jammerdan]

And after a month when this SNOs used hardware dies with 100GB of stored data, he loses the $50 he has paid upfront?

How long does it take at the current state of the network to earn $50 to compensate for the upfront payment that is potentially lost any time?

[Alexey]

I think it can be implemented as suggested here:

@nerdatwork

As per the documentation:

• 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 16: 50% of total withholdings are returned to Storage Node Operator, with the remaining 50% held until the node gracefully exits the network

The locking period could be 3/6/9/15 months based on dynamic APR. SNOs could opt to unstake 50% heldback amount or principle amount and keep the staking rewards locked for next locking period.

So, the held amount would be sent to that smart contract, not just held by the satellite.

[jammerdan]

@Alexey

So, the held amount would be sent to that smart contract

But it is the same system like today it would only introduce additional costs for Storj. Why is this good?

[Alexey]

I don’t know, just an idea

[jammerdan]

Of course we do not know the details yet. But if at the end Storj pays more for literally the same, I don’t see any advantage in such a system.
We have more space than we need at the current state of the network. There is literally no reason to pay more for held amount.

What we need is customers, customers, customers. And for an absurd reason better customers who pay with token, pay with token, pay with token.

If these numbers grow, there will be demand for the token. Customers who will pay with token and Storj who send the token to SNOs and SNOs who hold the token hoping for higher prices.

[nerdatwork]

@jammerdan

would only introduce additional costs for Storj

Just my theory, Storj would get 20% APR from Binance and offers 10% to its SNO’s held back amount. Storj isn’t incurring extra costs but diverting half of its “interest” to users.

There could be users that can’t have an account on Binance or got banned and no longer welcomed or are from restricted countries. SNOs would get more money on their heldback amount than the current system. This could also lead to users “investing” more in Storj token and probably invite more SNOs to join as operators.

[jammerdan]

@nerdatwork

Just my theory, Storj would get 20% APR from Binance and offers 10% to its SNO’s held back amount. Storj isn’t incurring extra costs but diverting half of its “interest” to users.

Ok. But that is a big if. And I wonder how sustainable this could be.

@nerdatwork

and probably invite more SNOs to join as operators.

But really, we need more customers not more SNOs.

[nerdatwork]

@jammerdan

how sustainable

This should have been implemented long ago too. I see lot of potential in it.

@jammerdan

we need more customers

I think a good referral system would help. As of now only partners get to enjoy commissions.

[jammerdan]

@Aleksman4o

Whats the next step? Reselling Amazon S3 instead of own?

I don’t know where you read that. But basically with Select, Storj is already reselling whatever datacenter is taking part.

@Aleksman4o

People can fund a Storj account with a bank card. What can be more simple?

Because there is more than credit cards. I mean why do other forms of payment even exist? Right, because customers have different preferences and requirements and my opinion is that is is beneficial to offer what a customer wants to use instead of forcing them to use something different.

And as Storj is already using a payment provider for managing credit card providers, there is no obvious reason not to accept at least those forms of payment that this providers offers as well:
Global payment solutions for Web3
They could even offer local prices to their customers:
Localize prices | Stripe Documentation

Their claim is:

Settle in fiat – we’ll manage the crypto logistics for you

All that sounds like it could be really made easy for customers to leave their money at Storj without basically changing anything.

[Alexey]

We tried this before, you could even pay with bitcoins. However, as it turned out, such providers withdraw a significant portion of funds from clients.

[Ottetal]

Hello Bryanm

Thank you for your update, and for keeping us SNOs in the loop. I can’t perdict the future, but I’m very interested to see where this is going.

Have a good day

[Meowcat285]

I’m really sorry if this is a dumb question, but will staking be required or can new SNOs just choose to use the old hold back system?

[nerdatwork]

@Meowcat285

but will staking be required or can new SNOs just choose to use the old hold back system?

It is still in planning phase. Whatever gets implemented will be conveyed to us through a detailed post in forum/blog.

[Meowcat285]

Gotcha. In my opinion, if staking was required, I could see SNO growth plummet.

[arrogantrabbit]

This would not be a bad thing. Right now there is a large surplus of node operators.

I would definitely preferred having to deposit $100 or $500 — whatever average annual earnings amount to — as a collateral to escrow, (on which storj shall pay interest; which is does not do right now on held amount btw — that’s a separate issue: why shall SNO be also a credit union issuing storj a free loan?), that I will lose if node does not perform: does not stay online, loses some or all data, or ceases to exist without graceful exit. ,

This will drastically increase quality of nodes, and as a result, storj profitability, because less aggressive erasure encoding parameters could be employed when you don’t have nodes running on a raspberry pi in a bathroom. Some SNO confuse “use already existing online capacity” with “bring ancient crap from a landfill online”.