Updated White Paper: Published to View

Autonomi Network Token (incl (e)MAID)
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Here and here you can find interesting information about Filecoin’s success. Here are 2 quotes that explain things very well:

Nobody can buy hard drives and keep them running and connected to the Internet for $0.10 per PB per month. The fact that they’re willing to offer you that price anyway presumably means they’re actually getting paid in some shitcoin they hope will go to the moon.

Filecoin, outlined five revenue sources for storage providers: block rewards, storage fees, retrieval fees, transaction fees and additional services.

Storj on the other hand started well with subsidies as @Jadkin pointed out but they got greedy and didn’t leave enough meat on the bone for the next people and that’s why no one cares about them.

The examples you give are for the current world, they don’t apply in crypto. I’ve said it before Autonomi has a chance of success because it’s super easy to become a miner, and miners made Bitcoin and Ether successful.

What is most likely to happen in my opinion is to attract speculator miners, they become the first users of the network and 12 years of subsidies are enough to see if this game will be successful.

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While we disagree on much, but I completely agree that the market activity is likely to outweigh emissions significantly.

It’s another reason why I expect subsidies would have little impact in stimulating supply, and that the emissions should would have a far bigger positive impact if directed to demand stimulation through funding app developers etc.

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Quite the contrary. You are conflating market reaction to human reaction to the tipping point of what is worth while to buy-resources/run

I see it as both are needed. Either one can only go so far till its diminishing returns

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Or, perhaps no one cares about them because there’s not much demand for their offering, or it’s not easy to use & integrate with services etc.

If they had as compelling an offering as I believe Autonomi will have, the market would be sufficient with no need for gimmics to prop it up.

Why would those examples not apply in crypto? They’re examples of markets for the same resources Autonomi intends to offer, just centralised vs decentralised.

The economics of Autonomi seems closer to a commercial cloud supplier than it is to Filecoin.

Filecoin is interesting, and seems odd. It’s almost certainly not a pure market for resources.

Filecoin almost seems like a blockchain that happens to require storage provision from miners, hence the seemingly ‘below market price’ storage offering… and the data storage offering must be pretty bad for demand to not be catching up with the supply given how apparently cheaply it’s offered.

This reddit discussion has some interesting points about while filecoin storage is terrible to use: Reddit - Dive into anything

It is interesting to see how well filecoin has survived & succeeded in terms of token price despite its apparently poor data storage offering.

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Answer the question why Autonomi’s partners so far are only crypto projects and possibly someone from Oxford who was promised free data storage.

For me, the answer is clear - there is no business dealing with crypto. And the common man on the street when he hears crypto and knows it’s a scam, ponzi and pyramid scheme.

But anyway, for the moment it seems that the team is firmly on its feet and will bet on a refined method such as the subsidy for the first years. I’m also ok to try some copy of Autonomi that implements your ideas, I’m sure there will be many.

Check out the Dev Forum

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If we’re not happy with the farming rewards not supporting development and apps Imho it would (have) be(en) better to not reduce the created token amount at tge that much and direct some more token to direct development support.

No point in trying to get the same money to do multiple things at once and risking the success of the whole project by overengineering subsidy usage and making a mistake there… The farming rewards have shrunk significantly already… Without it storage cost won’t be super cheap… Without super cheap storage initial users won’t have a reason to use autonomi instead of a proven solution… If it’s successful enough that farming rewards will be unimportant then the additional coins generated won’t hurt the overall price… But if the network does need the subsidies to attract initial users and to grow in the first years it would be very hurtful to not simply attract farmers to try and grow this network as fast as possible…

I think the plan as outlined in the wp makes a lot of sense

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In my mind bitcoin block rewards are subsidies decreasing overvtime eventually leaving us with only tx fees.

The rationale of keeping upload costs low to attract users and supplementing rewards while doing so to keep node operators happy makes sense.

Alternatively charge more drop subsidies and be less appealing in the beginning.

The current strategy makes sense to me.

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I didn’t read through the whole thread, so maybe this was addressed, but with the update given in Discord, I’m a little confused as to how the payment system can work. They detail this:

1. Client will ask for quotes to multiple nodes (at least 5 nodes) close to the record address

  • Nodes provide their internal metrics required for quote calculation
  • Client gathers the internal quotes and calculate quotes using the smart contract.

2. Client picks 3 nodes to pay. The payee nodes cannot be the ones that provided the lowest 2 quotes

  • If a node is lowering its quotes to get chosen, it will risk getting excluded

Wouldn’t this behavior reward nodes that quote exorbitantly high fees? If the node happens to only quote 5 and the top 3 are chosen, if a node quotes a price 100x the rest, it gets rewarded by getting selected. Wouldn’t it make more sense to exclude the highest and lowest quote and take the three middle to discourage bad behavior in both directions?

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IIUC, we will take the median value after discarding the 2 lowest quotes.

Say we get quotes of 30, 31, 33, 35 and 3273.

30 and 31 are discarded and we choose the median of 33,35 and 3273.

The lowballers are eliminated as is the chancer with the ridiculously high quote.

Thats my understanding anyway…

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Given the foundation already has plans to support app development etc, I don’t think there’s a general feeling that more support is needed, but I was arguing that if the supply needs to be diluted, additional ecosystem support would be of far greater benefit than subsidies to node operators, which I expect to have little impact on the cost of storage / value of rewards, and therefore achieve very little.

The view that the subsidies will significantly decrease the cost of using the network is popular in this thread.

I’ll just reiterate for anyone who missed it that:

I’ve argued that it’s likely the subsidy will limited in its effectiveness due to the diluting effect it will probably have, which is likely to be the case as long as A) a portion of those running nodes sell a portion of their earnings, and B) the flow of tokens from these operators is significant in determining the market price of the token.

But there’s another reason that the subsidy is likely to be all but pointless. See this chart from the white paper again:

Total resource cost modified
Total resource cost modified977×632 73 KB

I’ve roughly modified it to show 2 options for the upward sloping part of the curve, 1, and 2 (I know the subsidy is only 12 years, but the 2 lines show the concept).

If I’ve understood it correctly, this shows the anticipated total cost curve, which increases initially as the network data ‘overhead’ increases over time. This is a key factor in determining the upward sloping part of the green curve below:

Chart 1
Chart 1766×491 52.2 KB

With or without any subsidy, there will be a relatively steeply upward sloping cost curve, and therefore market price for network resources in the first years of the network. The very best a subsidy could hope to achieve in this scenario is shifting a price/cost curve rightward a little; something like shifting the slope from 1 to 2 on the first chart above.

If any point on the unmodified curve 1 were unsustainable, the subsidy will at best delay the inevitable for a very short time by shifting to curve 2.

So, the expectation that a subsidy will somehow cause ‘super cheap’ storage on the network over the first 12 years (the period the subsidies will operate in), or avoid some dangerous situation seems ill-founded.

Does anyone have any clear reasoning for how the subsidy will be able to have a significant / important impact on the price of storage on the cost of resources on the Autonomi network despite the steep upward trajectory of costs over the first years?

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These curves assume an exponential demand (upload)

So you basically say if the network is a huge success subsidies are pointless - and I agree - I just doubt we get to that point as easily (or at all) without subsidies

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One more question for those who are in favour of the emissions:

Given you feel it will be beneficial to have an action (emissions) that provides additional tokens to node operators, and if effective, reduce the cost of uploads, do you also see it as probably damaging to have an action that did the opposite; reducing the number of tokens going to node operators, and effectively increase the cost of uploading to the network?

Assuming the answer to the above is yes, do you have any concerns about the economics of the network while the Network Node Reserve is filling, and 18% of all payments for data are directed away from node operators and into a reserve?

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They don’t assume exponential rate in network growth in terms of users though; just that over time, storage and data creation has been increasing exponentially, and that is expected to continue.

The upward sloping cost curve isn’t caused by the exponential effects; with a stable demand for the network there would still be the upward sloping cost curve as the ratio of old to new data grows in the first few years, making it very difficult for a subsidy to have any significant effect.

Do you have reasoning why you think subsidies would be effective despite the upward sloping cost curve and possible dilution effect of emissions?

Even if it’s a mild success I don’t think the subsidies will affect much, or, at this scale do much harm, so it’s not a massive issue.

I do think the case for subsidies having an effect is stronger in a highly demand-constrained environment, which many here assume, as the value of the token value will then be driven more by speculation than demand for storage, and node operators will compete to earn tokens based on expected future value increasing while the cost of uploads remains below the ‘fair cost’ of storage.

In such a demand-constrained scenario, which I hope is avoided, while the subsidy may have an impact, it would be all the more important to stimulate demand through getting good apps etc, rather than keep more nodes online providing resources very few people want (a little like Filecoin it seems).

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Pretty simple - if nobody would upload to autonomi and I would have a pretty good use case I could utilise a storage network that is being subsidised with 10 million token/year - does sound highly attractive - if it’s not subsidised I would estimate to need to pay the amount the storage costs (and I could just run servers myself … Without using a unproven solution and with the risk of the network failing…)

So for initial use cases beyond hobbyists and the usual suspects programming stuff for their favorite network it does help for sure I would say

What precisely are you fighting for and why?

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I’m trying to communicate some reasons why the subsidies might not be effective.

If I’m right and thier impact will be minimal, then 20% of the total supply of tokens could potentially be used in a way that is more productive for the success of Autonomi than is currently planned.

I want Autonomi to be as successful as possible, and this is one small but significant area I feel it could be improved, and there is only a few weeks if any change is to be made.

While the discussion has been a bit frustrating, I hope that those in the team with an understanding of economics will take any good that there is from my points & the counter points as well, to consider whether any changes to emissions would be beneficial… if they are realistically possible at this late stage.

So, don’t worry I’ll shut up about it soon :laughing:. I don’t think the emissions will be a disaster as planned, but just want to make the arguments as clearly as I can while there’s still a small chance of improving the future of Autonomi with the concepts.

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Then why not argue for the total supply to be increased and have the best of both worlds.

You are coming across very much as wanting the elimination (not reduction) of a very obvious to most benefit of emissions to ease the world into this unknown and unproven product. There is a tipping point where people will change their minds and try this “product” (network of course). A well proven marketing scheme for introducing a new untried product.

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We need all of us to make this a success :wink: no need to shut up and I might be wrong as well

I just don’t see a point in being cheap about those 20%… For a

When we should be all hands on deck pushing every possible angle for success… This won’t be easy or fast… Nothing ever is… And we can most certainly need every fair or unfair advantage we can get to raise chances for success a tiny bit …

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If I would get a vote I would vote for initial supply and throwing token at farmers and startups… Might short term reduce token value a bit but at least then not everyone would hodl and the network would get used and grow…

And with the right growth you’d have your scarcity automatically too… There was never enough ant for 1 per human on this planet

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One unintended consequence of removing emissions totally is that there is a greater share of the total supply in the hands of (e)MAID holders. More “profit” for (e)MAID holders. Just like when the push for all the total supply to be in the hands of MAID holders.

This reduces the amount available for spending since most MAID people hold waiting for moon. Spelling a reduced adoption of the network due to less tokens being used to upload and pay nodes. Potentially spiralling into uploads being so low for so long the network suffers greatly. It would be better to have a larger total supply with more tokens available for farmers as the network grows. The farmers will upload themselves in much greater number than holders

This might happen is of a greater chance than the emissions has very little effect.

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Thankfully there’s already been a big reduction in emissions.

Yes I’m arguing for the elimination as I feel the emissions could be better allocated to boost demand vs trying to boost supply ahead of demand in a very probably futile way given the upward sloping cost curve & dilution effect of the emissions.

The change I’m arguing for is that redirect emissions to what I expect would be a better use for them. But, I wouldn’t be against an increase in supply to boost investment in ecosystem development.

The way I see it, the network will be successful based on the demand for its resources, which will require great apps and products that use the network, so dilution of the supply for something that actually moves the network ecosystem forward could be very productive, where dilution of the supply to try to hold the network back from reaching market pricing for its offering seems wasteful (given I expect the network will do just fine at market prices).

Remember, the network will be cheap at first anyway due to being empty at first, so perhaps there’s not really a problem for any subsidy to solve?