Equilibrium Safecoin Price

Hello all,

As it’s my first time posting to the forum, I’d like to start by saying thank you all for your hard work and innovation, I’m a true believer in the SAFE network and have invested in MAID anticipating it’s release.

However while researching the most efficient way to capitalize my future use of the network with Maidsafe/Safecoin purchases, I ran into the following in the Safecoin whitepaper, “the safecoin farming rate is ultimately the result of the network rate, a balance of the demand and supply on the network, multiplied by the vault rank.”

I also found similar verbiage in whitepapers related to the SAFE network. To an economist, this sounds like an algorithmic mechanism for regulating Safecoin price.

Could you please elaborate on this point further? For instance is this just a check against excessive volatility? Or is there an established price range in mind for Safecoins (similar to the Chinese manipulation of the Yuan)?

Thank you for your time

TY

1 Like
1 Like

There is no established price range. Theres no manipulation going on, from what i have gathered, the network prevents the supply of safecoin from outstripping the farming demand. I’ve read a few in depth discussions on this forum in regards proof of resource and the monetary policy of safecoin.

It would be more like algorithmic mechanism for regulating the ratio of safecoin to available data capacity on the network.

More so the price of data in terms of safecoin; (harddrives, cpu, bandwidth, ram)

and certainly NOT price of safecoin in terms of anything else.

3 Likes

Yeah thats how I read it too mate.

And lets not forget that market trading will effect it, supply and demand, speculative trading, all that stuff.

The benefit again is that the network only pays out for what is required, no more no less so the supply and demand on the network itself in terms of data regulates supply of coin to farmers and values it properly on that side of things but then…market trading

All super interesting and I cant wait to see it all come together and see how the value will go and especially how the app devs will work with it. So many variable its hard to wrap my head around :yum:

1 Like

This is only about the difficulty of farming safecoin, as a lever to balance resources contributed to the network. When resources are abundant, safecoin is farmed less easily. When resources are scarcer, safecoin is more easily farmed, to encourage resources to come into the network.

On the other end is the network safecoin price for PUTs (storage) to the network. This has a similar algorithm adjusting how much storage a safecoin will buy. While this one will give people a snapshot idea of what a safecoin is “worth” to the network, neither of these levers actually controls the external price.

Safecoin has its own utility (fast, no transaction fee, scalable, anonymous, etc.) which will lend value to it as well. It should trend, over time, to buy more and more PUTs. It will also get harder to farm on average, I think, over time.

What will really happen to the price is guess work at this time, but as far as the network algorithms go, it’s just levers against supply and demand to keep the network resources in the green.

5 Likes

Thanks for breaking it down, that definitely makes sense.

1 Like