Is Safe Inflation real?

I dont want to put words in anyones mouth, and possibly I’m wrong, but I have gained these notions from things that David has stated over the years.

He may have never stated what spare coins were for, but I came to that conclusion based on everything he has said.

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From the Farming Reward Calculation section:

When a client pays to store or mutate data, the payment will be immediately be divided amongst farmers

I can’t currently imagine any benefit of moving away from a mechanism that lets a true market price develop around a decided optimal level of spare capacity.

If farming rewards are ever disconnected from StoreCost, it will lead to an imbalance in the pricing & over / under supply of storage.

So, I quite like the RFC vs the common wisdom on the forum, except for the dilution, which I think may end up being counterproductive for network growth due to it reducing the expected future value of farming rewards.

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Again, i can only repeat, I feel as though I’ve swapped worlds in the multiverse!

Kinda at a loss for words.

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Hopefully some other users, or even devs will chip in later and clarify :slight_smile:

Though I fear if Neo and Jlpell get involved I’ll be in trouble :laughing:


The new RFC states


We will update RFC 0012 where we alter the calculations on sacrificial chunks to that of relocated chunks.

Giving farming rewards as 2x store cost or even 1x store cost will never work since data can be retrieved more than once. Any reasonable thought is that there will be more GETS than PUTS on a network.

There is by necessity a logical disconnect from storing costs and farming rewards. Yes there is a mathematical connection since they use many of the same parameters to calculate the amounts. But the logical disconnect is forced by the facts that

  • Storing occurs prior to getting.
  • Storing the piece of data can be minutes or days or months or years before reading that data.
  • getting of the stored data can range from never to millions of times.
  • time of getting of said data will be spread out over some time

Thus the network will receive payments in advance and keep that in a store.
And the network will pay rewards when earned and is not related to any predictable time period.

And your point from before

I think this makes the most sense to me as a valid reason for the supply dilution; to ensure early investors / holders don’t hog a big quantity of the token supply over time, and those who contribute to the ongoing health of the network eventually get the biggest share.

is extremely important.

Also a buffer must exist at some time even if all coins are given out before hand. Otherwise some farmers will receive zero rewards for GETs. To give all coins out up front requires that more is received in store costs than given out for rewards (over entire network or section).

How could anyone guarantee that there will be more received in store costs than needed for rewards in a given time period. What if storing drops for a period say due to an event. And people are retrieving more data during event due to the nature of the event. Are farmers rewards going to drop to near zero or actually zero at times?

The fact there needs to be a buffer for these times raises the question of why not keep what is current and have the buffer able to handle decades of massive ups and downs rather than the network live hand to mouth.


According to David, there will be no reserve. It is estimated that there will be constant spending of new coins:

No wonder I’m confused, it seems so many variations have been thought about, but nothing set in stone as yet that is actually workable.

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If I understand the current system correctly the tokens of the new people are used to maintain their own upload and the data storage for all previous uploads.

This system only works if the price of the token is constantly rising. As we know, there are bear markets in the crypto. There must be a reserve capable of absorbing a significant drop in the price of the token combined with a significant reduction in the use of the token.

For such a situation, having a foundation that can influence the uploading of data to the network will be extremely valuable.

That makes no sense to me. You state.

Not saying I agree or disagree, but following your logic, the price must keep rising.
Then you state.

OK, fine, I agree.
Then you state.

I fail to see how a foundation that gets effectively free tokens will keep the price moving upwards when they dont purchase the tokens.

Farmers are paid in tokens that people spend. If we are in a bear market and the price of tokens is low and for some reason people upload little new data, we need a third party to start uploading data and spend tokens to compensate for the reduced yield for farmers.

The current system assumes that if the price of the token falls, people will buy and spend more tokens. This is not guaranteed at all and if it does not happen and there are no enough new tokens in the system to pay farmers, the whole system will enter a spiral of death.

A foundation that has a reserve to use at such a time will be able to distribute the tokens to farmers through the network through uploading more data.

Of course, this will probably put additional downward pressure on the price, because farmers will have more tokens to sell, but the assumption is that this is only temporary and whatever the reason is which stops people from buying tokens will disappear and people will start buying again.

Of course, if the wallets of the sections hold a reserve for such cases, then the foundation will not be needed for this activity. But according to David, wallets do not hold a reserve.

OK, I get your thinking, but its not really at all relevant to your statement that the price must keep rising in my mind.
Indeed, we need surplus tokens, why bring in a third party when the network is capable of managing it?

It just causes more problems and leaves the network at the mercy of the third party which is far from the autonomous network that were supposed to be building.

Let me explain it with the following analogy too.

Bitcoin miners are paid by transaction fees and the block reward.
Safe Network farmers receive payment from people’s transactions (for data storage) and from a reward from the Network Reserve (the monetary inflation).

If the transactions fall in numbers and it is not enough for all farmers to make a profit, or at least equally, they will start to stop their farms. In this analogy, the Foundation intervenes and starts making transactions.

I am well aware of that. I think the reason David doesn’t want the sections to keep a reserve is because in this way there’s no reason for them to be attacked and hacked.

As long as the price rises, it does not matter whether there are decreases in the number of transactions, they will be offset by the rising price.

By the way, if you think about it, the Safe Network and Bitcoin are very similar if you think of farmers as miners who process transactions. The output of the miners are blocks, the output of the farmers is data.

The difference is that Bitcoin can exist with 1 miner, ie. it is able to shrink, while the Safe network can only shrink to a certain size. Therefore, it is absolutely mandatory to have a reserve of tokens for moments of reduced transactions.

And while we are on this topic, I think that the current economic model does not take into account that there will be people buying the token entirely and only for speculation. These people will sell the token during a bear market to speculate on the possibility of buying it cheaper later. Bitcoin and alts often fall 85-95% down in price, I don’t think Safe’s current economic system can survive in such a situation.

Yes, I get you.
I’m against needing a 3rd party though, if there is one I’m not against it. Backup solutions are good.
But the network needs to be able to stand on its own 2 feet, this requires a mass of surplus coins for just that need. In my mind anyway.

As neo stated in his last paragraph

And for the other reasons he mentions further up, i see the buffer essential.
And I’m in full agreement, why not keep what is current.

I’m not sure why the rfc and davids statements seem to be at odds with each other, maybe they’re not, but I’m not understanding why the change of mind to push tokens out as opposed to keeping them for times of need.

In my opinion, many of these contradictions stem from the desire to claim that the token itself has no value and only the data have value.

The token has value because it protects the network. But this desire to deny that price matters is crippling to the discussion and to finding the best working solution…

Or you can have an autonomous data network with a reserve buffer that manages this automatically.

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Did you see David’s statements that section wallets would not hold a reserve? The foundation is a solution only if what David says is put into practice.

Maybe he will change his mind. If the network is secure, then section wallets shouldn’t be a problem. There are ways to reduce the chances or perhaps even eliminate the possibility that a section wallet could be compromised.

It would be nice to hear a rationale for why a section wallet protected by multisig would be likely to get compromised.

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Iirc, the idea was to minimise possible attack vectors , no more no less.
But then someone came up with a plan for puzzles to unlock coins.

I thought at this point the idea to push out coins fast was dropped.

Hang on folks, there’s been a lot of discussions regarding farming rewards and many options. More recently we decided get a simple workable solution in place, make sure the whole network works and pulls together then focus on the rewards algorithms.

This is where we are and I should be clear we are implementing a sub optimal reward mechanism right now with the view to be able to spend time and focus on only that in the near future.

It’s a complex issue and there are many “solutions” but the one we go with will need to be incredibly clear, simple and hopefully never depend on humans :wink:


I know we keep on going round on this, but I do think it is quite crucial. It’s not just a “desire to claim” that the token has no value, only the data… it is a statement of fact that:

  • Without data, the Network—and therefore the token itself—cannot exist.
  • Farmers only get paid when the Network is used for data.
  • The more people that are using the network for storing their data, the more resilient it becomes.
  • The token is a mechanism that allows farmers to exchange data storage resources with people who want to store and use data.