What I’m confused about is will the store cost/farming reward inform the fiat value of Safe Network Token or will the fiat cost of storage inform the store cost/farming rewards? The token is also speculative and can be valuable for many reason and increase wildly in fiat terms which with a divisible token the network would adjust the cost/reward to balance network resources.
I don’t see how the latter is possible without some oracle price feed to the network which I simply can’t imagine happening, though maybe I’m completely wrong in assuming that.
Higher fiat price of the coin means it is more profitable to farm, meaning more people will want to do it, meaning store cost will drop because of all of the new resources that were added to the network.
What I’m asking is, how will the network know how to price in fiat/dollars because that’s how we all are pricing storage costs and farming rewards?
Maybe I’m missing something obvious?
The network needs to know what the fiat price of SN is to adjust cost/reward so where does it get that data? A native Safe exchange is the only answer I have for myself besides a oracle who’s data would come from outside of the network.
Could also be a decentralized oracle that lives on the network but gets data from outside of the network (similar to something like ChainLink). A service like that would be handy all around even from early on.
It doesn’t know or need to know this, at least not directly. As I tried to describe in my first reply, it gets this info indirectly through how many spare resources the network has. The higher the fiat price, the higher the spare resources will grow. The lower the fiat price, the fewer resources as farmers either leave or stop joining the network.
I could be wrong, but my understanding is that the network will price rewards solely in SNT and not in fiat. The fiat price will likely matter to up-loaders and farmers, but not to the network. Their behavior based on fiat (or any other consideration) will drive the network rewards in SNT. There are dimensions to this that will be really interesting to see play out. Each individual needs to make decisions on their own situation.
Okay so the human element of people seeing the fiat price/how much the network is offering in rewards drives a call to action to farm, and upon the network getting too many resources it balances by lowering the farming reward (and vice versa) till there it reaches its equilibrium but as the price is always fluctuating the network has to continuously and dynamically balance in real time. So as you say it somehow finds the right price indirectly by the network balancing its resource needs.
That is something kind of hard to wrap your head around when you really question it because of it being indirect. Thanks
I’m inclined to believe the fiat price will inform the store cost/reward b/c the fiat price is what will inform human behavior (e.g. how much they store or farm). How much humans store or farm will dictate the Network’s supply/demand economic calculations. So if the price of Safe sky rockets such that the reward is now extremely high, more people will farm, potentially making supply outstrip demand until the Network rebalances. Essentially this:
We’re assuming that the network doesn’t throttle new entrants for this to work properly. I think they were working on allowing new farmers to join more easily now instead of having to queue to join, so that’s good to hear if so (also just from a UX point of view).
Another factor on price downswings is that people will probably “hang in there” to a large degree in order to support the network because it isn’t great for the health of the network to shrink very much.
So hopefully “number go up” for the most part.
I was actually just thinking about that too. I was thinking with bitcoin the difficulty adjustment forces some miners out but on the Safe Network people are mostly running spare resources and so won’t mind earning less which means they will be willing to hang in there for quite some time. I think for a lot of people farming will be a very passive act.
What kind of impact does that have then? Does that essentially make the network grow more like I think you are suggesting? Seems like that could lead to some massive growth quickly once people catch wind.
Also if there are rewards for gets, having more data on the network would help increase the farming profitability. And people will want to acquire some tokens to do some cheap storage, which would dampen the downward price action.
humans who buy tokens to upload will slow purchasing when price ($$$) is high.
humans with tokens already will also slow down purchasing resources.
When farming rewards increase (lower spare space), overall humans will add storage resources.
When farming rewards decrease (higher spare space) overall humans will remove some storage space
This is a negative feedback loop system using human nature. While in some cases the trend will seem to be not followed, the negative feedback will bring it back into control.
You can think of it as a rubber band control. It can stretch but the further it is stretched the strong the pull to bring it back to reality (base price).
The base price will be determined somewhat by speculation together with what the market will bear. And from there the 2 interrelated negative feedback loops bring back the pricing to the “base price” when major jumps in price OR storage occurs.
For example the “base” price of SNT is determined to be 2$ then if
spare storage starts to be scarce then the network raises store cost (Higher SNT to store)
people slow buying SNT for buying resources
people with SNT slow buying resources. Some start sell fearing the worse
price $$$ in market starts dropping
people buying SNT for buying resources reduce their slowing
Scare resources increase network payout (SNT) for rewards
people add more Nodes/space to get rewards
network sees this and space no longer as scarce
SNT store cost for resources reduce
Rewards (SNT) reduce
Thus the $$$ cost to store comes back to around what it was before
Now if cost $$$ of SNT is 10$ the change is only in the base SNT that the network will be using. The reason is again human nature.
When the price rises from 2$ to 10$ people find they can buy more resources per $ and then do so. This is an overall effect, some humans won’t but others store as much as their wallets allow. This causes the following
more resources are bought.
network storage begins to become more scarce
farming rewards in SNT and $$$ rise dramatically. (SNT reward amt increases and the 2$->10$)
more farmers come on line and with the 2$ to 10$ base price increase a lot more farmers come online
This causes the SNT for buying to drop
this causes a cycling until people slow buying extra resources since they run out of things to upload. At that point we reach a new much lower steady state for Store cost (SNT) to buy resources and rewards for farming.
Thus the effect is for a new base for store cost (SNT) to be made. I would think in human nature that the $$$ amount to store when SNT is 10$ would end up reasonably close to the $$$ amount to store when SNT was only 2$
In addition to resources, the rate of new nodes attempting to join the network and the rate of old nodes leaving the network is also a big indicator of fiat price. Although resources matter most, the actual node counts for inflow and outflow of operators may be a better indicator of fiat trends.
Exactly in line with AWS S3, 10x cheaper over 10 years (actually it’s less than 10 years for google drive, but I think it’s ballpark close enough to keep the simple 10|10 relation, and yes other tiers / timelines vary a lot with the ratio, but I’m gonna cherrypick )
Extrapolating this we end up with permanent storage being 5x the current cost to store for 1 year (calcs here).
I took it was using real life example of how the cost per terabyte drops then charging 5 times the reward amount to store would be what we need to consider.
5 times the reward price for PUTs will over time cover the cost of permanent storage. So if GET rewards cover the physical costs of (Spare + dedicated) storage then storing is 5 times. Remember that spare resources is zero rated for that storage and dedicated storage has to compete on that grounds.
The only issue I see here is that storage cost is not necessarily correctly reflecting the rewards that will have been done (overall) during the lifetime of the Safe Network. @mav
For reference, pCloud sell lifetime storage at between 3.7 and around 10 times the annual rates, depending on whether they are on sale. The lifetime contracts seem to be permanently on sale, suggesting that at 10x annual rate they don’t shift many.
It’s just a way to look at current cloud price per year and try to equate it to a cloud price forever.
eg if I see a price of $1 per year for AWS then I’d expect it to be about $5 forever on AWS, and this allows me to make some comparison with whatever the price is for Safe Network. It’s just a rough heuristic to convert per year price to forever price.
Might be of importance to mention that big server/cloud companies have access to different hardware than the consumer market, which might give an unfair competitive advantage.
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Please don’t shoot the messenger, I have no expertise in pro business storage, I just watch some tech news from time to time.