I believe that an exchange that wants to work with EU clients must comply with EU regulations, otherwise its license will be revoked and possibly fined.
No because stablecoins are the superior solution today for transferring value compared to arbitrary tokens. This is even getting recognized by the professionals in the financial systems. Only Storj remains stubborn.
While this is gerally true, the travel rule is not about forbidding transactions even from 3rd parties, it is about collecting information so that each party is identifiable. The easiest way for exchanges is to disallow all 3rd party transactions. But they are not obliged to do that. They can allow it abut are oblidged to collect certain information.
Stablecoins and fiat are not planned to be a payout options. You agreed being paid in STORJ tokens, this didn’t change.
From their words
The ownership belongs to Storj, you cannot declare that it belongs to you - you cannot prove that, so you must use your own wallet, since you are the EU citizen. It’s your laws, I would recommend to do not try to break them.
From the Storj whitepaper:
While we intend for the STORJ token to be the primary form of payment, in the future other alternate payment types could be implemented, including Bitcoin, Ether, credit or debit card, ACH transfer, or even physical transfer of live goats.
So changes to the payout method can be made anytime and expected for the future.
Or at least hoped for.
Of course not, but that is not the point. The point is how exchanges interpret the rules and how they decide to implement them. Currently some if not most exchanges decide to strictly forbid 3rd party deposits. But this is not what the law is demanding.. What the law is saying exactly can be found here: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32023R1113
This Regulation lays down rules on the information on payers and payees accompanying transfers of funds, in any currency, and on the information on originators and beneficiaries accompanying transfers of crypto-assets, for the purposes of preventing, detecting and investigating money laundering and terrorist financing, where at least one of the payment service providers or crypto-asset service providers involved in the transfer of funds or transfer of crypto-assets is established or has its registered office, as applicable, in the Union.
Nowhere does it state that transfer of crypto from 3rd party is forbidden but of course an exchange is free to handle it like that. This way they skip their obligation to collect store and verify the required information for every transaction and avoid being held accounable.
What is the long-term vision for the STORJ token?
Right now the token functions more as a payout mechanism than a true utility token. Customers pay in USD, and any STORJ added is converted immediately. Node operators similarly sell ASAP to avoid the post-payout price swing. The result: the token has no real utility or incentive to hold.
Are there plans to change this dynamic? For example:
- Pricing storage directly in STORJ — This would create genuine utility and give companies a reason to hold tokens as a hedge against future storage costs.
- Incentives for holding — Staking or other mechanisms that let network contributors share in the platform’s growth, rather than just absorbing price volatility on payout day.
- Addressing the fixed supply vs. daily capacity issue — If storage is priced in STORJ, how does the fixed supply interact with continuously created TBm?
The current setup decouples token value from platform growth. Node operators take on exchange risk for payments that lose significant value within hours, without any long term perspective. Is there a roadmap to make the token actually reflect the utility it’s supposed to represent?
I don’t think this was the intent behind the token?
Seemingly not, but what is the intend behind the token then? Was is purely to crowdfund the company with ICO, while enabling worldwide payments? StorjLabs has been taking “token governence” very seriously, and managed their supply strictly (with timelocks, etc), purely for the purpose (from my perspective) that “speculating/investing” by holding onto the company feels safer → keep price (and therefore company capital) high.
From what was communicated, it was always that the Storj token is a “utility token” (whatever that means), and is used for maintaining health of the network. If SNOs do not feel incentivised to keep doing their operations, this would hurt the bottom line of the company at some point (if they cannot grow capacity anymore, or the network centralizes). AFAIK has StorjLabs now sold all their tokens, and is now the (only/main) one buying from the market, to be able to pay SNOs.
Perhaps it would be possible for other companies to create a Satellite and use Storj tokens to pay the SNOs in an alternative way, outside StorjLabs (I’d love to see a EU native provider 
? Not sure if StorjLabs has opened this up yet or ever will.
To me it is quite clear that if the Storj tokenomics do not work out in the long term, this will negatively impact the stability and health of the network and therefore reduce the value of Storj’s product offering (competing with hyperscalers).
How do you see this @Toyoo, do you have an alternative view?
Yes. A lot of projects used their token treasury to fund operations… until they were profitable to stand alone. Last we heard Storj was almost there (and may actually be making some money now, after changes with their new management).
Once they’re making money… they can use the token forever for payouts.
And this is what the purpose was:
This was the intention.
Exactly. All this due to a volatile token that has zero advantages for SNOs.
This is the future. And it does not make sense. Imagine if they are buying at $0.2 and the token price drops when the want to send out payments.
Anybody can create a satellite the code is open source:
And Storj does offer a white label solution, you can see it in action at
I appreciate the thorough reply @jammerdan!
That in 2017 they put the legal jargon in there that the tokens ought not to be used for speculation, etc. feels just for legal protection, as this did not seem to be the spirit of the token.
And with the staking initiative, is looks like the company is incentivising SNOs to hold the tokens long term? Why do you say this doesn’t make sense? As the price is in USD anyway? The spiking seems just because there is not so much liquidity, and Storj doesn’t have reserves.
But a volatile token also doesn’t bring too many disadvantages for SNOs as well, as long as the long term prospects are good for holding on to the token (which currently it is not).
I’ll look into doing a PoC for running my own satellite, that would be interesting, especially setting the pricing, geofencing and getting SNOs to accept my satellite.
That’s the easiest part. Negligible I would think. The real issue is convincing customers to use and pay for your service.
Unless you have some secret sauce storj does not and cannot get — this will fail.
Too many? There are none. Zero. Not one. There are no advantages of using token for operators. They earn in USD and therefore need to be paid in USD. Not in some fake candy wrappers.
Holding utility token is an oxymoron. Token is not a share in the company. Nobody shall be holding it. Those who want to gamble on random stuff — storj token, or price of guava in Australia — they can, at their own expense; but right now storj is forcing every operator to buy shitty token with their earnings and gamble with it. “But you agreed to it lol” does not make it acceptable.
We, SNO, agreed to suffer through this nonsense in the early stages of the project to help bootstrap it. Now storj is holding our generosity against us. Nice.
Let’s do a thought experiment, and replace the token completely with DOGE: nodes getting paid with DOGE, customers being able to pay with DOGE, etc. What would change in the incentive structure?
…nothing.
The closest in my opinion would be, with some changes to pricing structure, attracting people interested in something close to a low-cost storage with barter characteristics to grow the network. But right now Storj does not need to do so: Storj is not in such a desperate position for growth that they would need to enter this market, and the network is said to be in a good enough shape to not need more participants.
That said, if Storj would ever abandon the token, there’s no going back. So if Storj wants to keep this door open, they need to maintain token presence. As such, if there is any inherent value to the token, it is as an indicator of a potential future market of this type.
Correction : this will solve the same issue storj says it tries to solve.
The actual reason for the token’s continued existence is different. It lets Storj pay USD-denominated liabilities with magic beans they printed themselves, while continuing to pretend the token has a functional reason to exist.
“Cross-border payment simplicity” is the cover story.
If true, that is fraud, not “convenient.”. I don’t think that is what they intentionally do.
If that is an incidental result of their payout mechanics, then it still could be an accounting and disclosure problem. Again, I do not think they do that. But other “market participants” can totally extract value from storj ecosystem by manipulating market that way. Who pays for that? Storj.
Why is it possible? Because of existence of double conversion in the payment process though a tradable boutique asset with puny liquidity.
So today token serves exclusively to leak value from storj to crypto market. It is very dumb to keep clinging to it.
That’s rather strong accussations given the effort Storj Inc. took to make sure with regulatory agencies regarding the token. I know that the current cryptocurrency athmosphere per some of the news coming from the neighbourhood of American government suggest widespread manipulation of the markets, but you have to have actual indicators of this happening to say Storj does so.
You are right. By “pumped the token price,” I really only meant that by buying up the tokens, they most likely unintentionally raised the value of the token if that is what happened at all. Anyway, I’m done with the topic; I don’t think anything will change regarding the payout method. We will see if this repeats next month.
Unfortunately, all exchanges decided to interpret it this way for EU residents. I think they consulted their lawyers, which is what led to this interpretation.
Therefore, I suggest you don’t take the risk and don’t directly specify the exchange deposit as your wallet if you are an EU resident.
We’ve already received tickets with requests and pleas to convince exchanges to release their funds. But we can’t help with this.
I certainly cannot speak for all exchanges. Maybe some don’t. But certainly we see large ones who handle it that way. That’s their easy way out. Banks have the same obligations by the way. But as we all know, they collect the required information for every transaction, this is why the banking system works the way it does an there is no issue in receiving payments from 3rd parties.
But contrary to banks, even if you find an exchange that allows 3rd party deposits, you may learn that they don’t support STORJ which proves again how bad that arbitrary token is as it is not as widely accepted compared to the mainstream crypto currencies. Exchanges even actively delist STORJ which makes it worse for SNOs to exchange it to something useful.
And this becomes a real issue if you get paid in STORJ and cannot exchange it. But Storj remains stubborn.
That leaves the question how to get the STORJ token from the personal wallet to the exchange without paying ridiculous fees again in an additional ridiciulous and volatile cryptocurrency the user must hold.
Also we learned that new fees ar imposed on the so-called “solutions”: High transaction fees on zkSync Era bridge
The entire system is a joke where SNOs are plagued with volatile tokens and cryptocurrencies, exchanges they can’t use and ridiculous fees on every step.
If Storj would not have been focused in using solely their own token for payment, they would have been able to develop a real independent global mass payment solution and could have created additional revenue streams. Other companies and startups ar doing that right now. This is a startup featured recently in a local newspaper founded by youngsters: CashXChain | CashXChain
Yes this is very bad an unfortunate for these SNOs. It shows again how bad the system is. But still exchanges should not be able to simply keep the money they should (and I believe they are obliged) to return it to the sender address and if that happens, Storj should be able to help and re-send it to to the SNO to another address. But I don’t know if Storj does that.
I really have no idea what the “spirit” of a token could be. It was stated, said and repeated many many times also here on the forum, that the sole purpose of this token is the payment for storage and not for speculation:
Disclaimer:
The STORJ Token is intended to facilitate the provision and receipt of data storage and related services through Storj’s software application, which serves as a user interface and development platform on the network. The STORJ Token is not intended to be a digital currency, security, commodity, or any other kind of financial instrument.
I am not a lawyer but if Storj officially claims that but has other intentions then we are likely talking about financial fraud, maybe?
What I mean what does not make sense is if Storj has to buy tokens for SNO payout at a higher price than the price they send it out. And the STORJ token price seems to have only one direction, down. So if they buy tokens at $0.2 but have to send them out when the value is only $0.1 this is what I mean does not make sense.
As @arrogantrabbit has said:
That thinking was one of the initial wrong concepts Storj had:
Therfore they focused on getting storage space providers instead of focusing on getting customers. And today it is even harder with many more providers that are offering S3 compatible object storage. But maybe with Storjs white label solution they can attract companies to run that instead of creating their own thing.
I appreciate your candid perspective on this, and I tend to agree on your assessment on the current situation (except the insinuating fraud part, I don’t believe StorjLabs has given any indication of this). I feel there is could be more potential to the usage (‘utility’) of the Storj token then is currently the reality, though.
I do not agree with this. The purpose of a utility token is to “use” (i.e. consume) it, but that usage can be in the future, and can therefore beneficial to hold.
So a hypothetical scenario that I’m interested in is where a company want to fully vertically integrate without 3rd parties (especially parties from the US, seeing the political climate atm). Meaning not “buying” Storage from a company, but directly from SNOs. Even better if this would be priced in STORJ, say 50/200 STORJ/TBm ingress/egress (and not sure if this is even possible with a fixed supply token)? I can imagine there are still significant problems to pegging capacity to STORJ tokens and StorjLabs is not incentivised to do this?
Thought experiment:
What would it take for a company to run all the infrastructure themselves, only for their own storage usage (think 100s TBs, not PB scale), where long term reliability and low maintenance are priority? Is this even feasible? Assume the company is running their own compute infrastructure, just not the storage part. They would have to add the following components:
- Personal Satellite
- S3 gateway
- Monthly payments to SNOs
The opportunity here is that the company would be able to keep STORJ reserves on their balance sheet for future payments for their storage capacity, e.g. locking in 10 years of reserves and making this transparent to customers).
Open questions:
- Running the Satellite and the S3 Gateway should be reasonably straightforward. Is there anything I’m missing here?
- Is it possible for a satellite to set the price they pay to SNOs in STORJ, or is it locked to USD?
- How much work would it be (can it be fully automated) for payments SNOs (as well as managing the accounting for a company in EU)?
Might go slightly off topic, but I wanted to add a different perspective on the matter.
That’s already happening. Turns out, if you prepare software to work on unreliable WAN and an absolute mixture of storage solutions, it deals with potentially shitty in-house data center LAN and storage pretty well too.
I don’t think they bother with the token though.