Safecoin VS SAFE Storage

[Seneca]

@dyamanaka

The year is 2025 and the SAFE Network is mainstream with 99% of all Safecoins farmed. Safecoin has reached stellar fiat value of $100 due to many killer APPS, as well as mass adoption.

The Network is at target capacity 80%. It cost 1 Safecoin to buy 100 SAFE GB.Unfortunately, most people refuse to spend $1 per GB.The Safecoin farming pool remains dry, yet the GET request activity continue to increase.

10% of the farmers leave because it’s too expensive to run a vault with so little payout.The SAFE Network wants to increase the payout but there is not enough Safecoins in the farming pool.

The Network hits 90% capacity, and raises the storage price.It now costs 2 Safecoin to buy 100 SAFE GB… causing even less people to PUT… but draws some new farmers looking to get lucky in the farming lottery.

This scenario can be avoided if we design a proper dynamic PUT price algorithm. It should take into account the elasticity of PUT prices in relation to quantity of PUTs. It should also have a dynamic target % of SafeCoin in circulation, one that makes sure there isn’t excessive inflation and that there is always a sufficient SafeCoin reserve for the network to increase farming rewards during a crisis.

I have a half-finished concept for such an algorithm, I should finish it soon and post it so we can discuss it.