This is a really interesting and difficult question which has been on my mind a lot.
While I don’t think we can trust a document from 2015, it’s the best we have just now; RFC-0012 Safecoin Implementation says the allocation of new safecoin depends on the ratio of Sacrificial Chunks to Primary Chunks.
“we want the [farm] rate to increase as we lose sacrificial chunks”
Sacrificial Chunks were used as a measure of spare space (ie supply), but since sacrificial chunks are no longer in use rfc0012 is not currently usable. The intention still applies, just not the exact design.
A way to measure spare space (supply) is required for the network to ‘balance’ supply and demand. Currently there is no way to measure supply.
The Chia Network uses Proof-Of-Storage which is described in this very technical paper: Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space.
We construct functions that provably require more time and/or space to invert.
The idea is to use disk space rather than computation as the main resource for mining.
a cheating prover needs Θ(N) space or time after the challenge is known to make a verifier accept.
V challenges P to prove it stored F. The security requirement states that a cheating prover P* who only stores a file F* of size significantly smaller than N either fails to make V accept, or must invest a significant amount of computation, ideally close to P’s cost during initialization
This is a way for a vault to prove they have a certain amount of spare space which can be easily verified by the network. It’s like proving a certain amount of hashing has been done when matching a specified prefix (ie PoW).
This is really fascinating since it lets the network measure the supply of resources, which is critical in balancing supply with demand. This allows the economic model of safecoin to function as intended…
I’m still working through the details but wanted to put it out there so others can investigate and comment on the potential as a measure of supply.