[Revised 9/2/2022] - Introducing a Sector Duration Multiplier for Longer Term Sector Commitment #453
Replies: 39 comments 116 replies
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赞同你说的，我更希望项目方技术和生态的进步，而不是经济模型不断的修改。不要破坏社区的共识，项目方想要维护币价，锁仓自己的币不就可以做到了？ |
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Hi @swatchliu
The logical connection is that InitialPledgeLockTarget helps target a percentage of supply being locked. This is what the current percentage locked supply trajectory looks like: If this number is stable, this is good for the long-term health of the ecosystem. This stability is a minimum bar to attract talent, capital and grow the ecosystem. This is one of the things this FIP aims to contribute to, alongside the other motivations given above in the FIP text. On why 50%, this is due to the interaction with expected average duration and duration multiplier, which means these things have to be considered holistically. Originally we proposed 40% but revised to 50% to enable a less steep duration multiplier. |
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Still failed to see why "long term commitment" and "locking more FILs in consensus pledge" have to be considered holistically, explain to me like I'm 5 please. |
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I don't see their connection either. The only reason that I see for "The SectorInitialConsensusPledge multiplier will increase from 30% to 50%" is to lock more FILs to boost FIL price. IMO, it just increases entry bar for new SPs and kick out small SPs and that leads FIL ecosystem to be more centralized. |
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Filecoin Network Macro Commentary(cross posting from earlier with minor edits to provide context)
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i dont know ，what you say。 |
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The major changes of this revised draft are highlighted in the text (that is: "shorter max duration" and "phased rollout"), but some have correctly pointed out there are many other issues that have evolved - both in this FIP and related FIPs - over the past several weeks of community discussion. To pull those out more explicitly, this is my attempt at a: List of Community Questions and Resulting Changes/Responses in latest draft of FIP-0036I. Funding / Collateral1. Will Increased Collateral Requirements be Too High for small SPs? / Will this push toward less Decentralization? Collateral requirements will increase commensurate with higher duration and higher QA multiplier. The maximum allowable duration is changed in this revision from 5 years to 3.5 years to mitigate potential negative impacts. There is no requirement for SP’s to commit more funds/resources than they are capable and/or willing. This FIP is creating optionality for longer durations, and optionality tends to increase participation. SP’s can get an idea for their return profiles from the open sourced starboard ROI calculator:
Lending is available and more options for loans and capital are coming online everyday:
We believe that it is likely FVM (Filecoin Virtual Machine programmatic actors i.e. smart contracts) will facilitate a much more efficient peer-to-peer lending market, thus increasing lending opportunities, but this will take some time to roll out 2. Will there be enough coin availability and wallet flexibility? If an SP wants to use multiple lenders on the same address, they can’t do that today. We have a separate FIP-0029 “Beneficiary address for storage providers” that would remedy this: https://github.com/filecoin-project/FIPs/blob/master/FIPS/fip-0029.md II. Developer & Infrastructure3. If there is a bug in the PoRep sealing algorithm, will faulty sectors exist for too long? This is already a known issue for existing sectors, and times out when a sector expires. This has been addressed in the updated PoRep bug policy discussed here: 4. If Pre-commit deposit (PCD) is higher, do we risk more loss and lower ROI when converting PCD into proveCommit? The PCD is still relatively small, however, and failure rates for PCD conversion are very low, so this is not seen as a high risk. The revised FIP draft includes language and a tool that address this point. 5. Uncertain short-term dynamics / Underestimating a complex adaptive system When simulating a complex system, there’s a tradeoff between producing understandable results and how complex the model is Our model is a relatively simple one that describes the mechanistic elements of the protocol. We use this to simulate hundreds of potential scenarios. This allows us to build an understandable picture of what the future might look like. Any uncertainty is further mitigated by the changes of "shorter max duration" and "phased rollout". The CryptoEconLab team would also be closely monitoring conditions for health before, during, and after the rollout. III. Dealmaking / FIL+ vs. CC Sectors6. Deal vs CC inequality / High deal making SPs are not able to extend deal lifetime independently, leading to relative disadvantage with respect to High-CC SPs. As mentioned in the FIP verbiage, a point raised by the community concerns the relative ability for Committed Capacity (CC) sectors and FIL+ sectors to extend their sectors upon this policy's implementation. In particular, many of these concerns centered on the ability for CC sectors to instantly extend to gain a potential maximum multiplier on their QAP. FIP-0036 now introduces a softer version of the policy, capping the max sector duration commitment to 3.5 years instead of the previously proposed 5-year time-span, and gradually phasing in the increase to maximum commitment. Also note that FIP-0045 will separate the FIL+ maximum term from a deal’s term, so that, after first making a deal (limited to 1.5y by the built-in market), a client could increase their FIL+ term to 5 years if desired. #313 (reply in thread) 7. Will everyone rush to the maximum duration? How many current deals utilize the maximum of 540 days? 95% of verified deals so far tend toward the maximum duration (i.e. greater than 500 days.) For sector durations, however, there is a fairly robust diversity among SPs. This suggests that SPs will chose a robust distribution of durations based on their own points of view. See durations dashboard for details: https://snapshots.raintank.io/dashboard/snapshot/9pRy5IYYLr0EB7ldg5ExT4eqvMQmxHE5 IV. ROI8. Will I be profitable? / What will my ROI be? SP’s can get an idea for their return profiles from the open sourced starboard ROI calculators (see links in this comment above): As expected, FIL-on-FIL ROI trends will have somewhat lower returns as a tradeoff for increased certainty and duration of those returns. Circulating supply, however, would also tend to go down somewhat, increasing everyone's share of the pie, so these two effects offset each other to various degrees for various profiles. Superimposed on the above effects, individual SP’s ROI will relatively increase if their avg deal and sector duration is higher than that of the network. Conversely, individual ROI will be relatively decreased if their avg deal and sector duration becomes lower than that of the network. The relative advantage in ROI for FIL+ deals remains the same. V. Motivation(Note the FIP draft itself has a detailed Problem Motivation section) 9. Should we focus efforts on building functionality and usage instead? / Is this just short-term tokenomic manipulation This is not a short-term manipulation, but rather an implementation of a core value that long-term stability should be incentivized in the network It is not an issue of “either or” (with respect to tokenomics or functionality), but “both, and” Thousands of developers and hundreds of projects are, in fact, racing to build out valuable, real-world business models on top of Filecoin. This takes time, however, and requires trust in the stability of resources and infrastructure, the primary goal of this FIP. VI. Timeline10. Why is this urgent? See the FIP draft itself for a detailed explanation of this in the Problem Motivation section See also the information about macroeconomic uncertainty and sector expiration cycles as described in ZX’s comment here. 11. Will there be rollout shock? / Transitory effects? Rollout shock could occur if SPs race to extend their commitments and gain a further multiplier. The chance of this occurring with slope 1 is low. This is further mitigated by gradual increase of maximum sector duration, 6m/w, and maximum duration of 3.5y. And as mentioned above, any uncertainty is further mitigated by the changes of "shorter max duration" and "phased rollout". The CryptoEconLab team would also be closely monitoring conditions for health before, during, and after the rollout. |
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Yes, those who can will and those who do will get bigger and ultimately drive out smaller SPs |
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How does everyone's share of the pie go up if circulating supply goes down? I think what you're trying to say here is that if we reduce circulating supply then we expect the price to go up, which if we come full circle is the primary objective of this FIP. |
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In other words, if you CANNOT access more FIL than the average SP then you ROI goes down, if you CAN access more FIL than the average size SP then your ROI goes up... i.e. this is a race for capital - centralization. |
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Reduce circulating supply to push the price up! |
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Because there are parties with enormous amounts of liquid FIL who want to improve their cashflow. |
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Jfyi FIP-0029 doesn’t allow multiple beneficiary addresses for one miner actor, an FIP will be needed to implement that on layer1. Tho I personally don’t think that’s necessary cuz fip |
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Even if multiple lenders are possible for one miner address, another problem is loan interest rate. The interest rate of my current loan is 20%. The Annualized FIL-on-FIL return from the model starboard is 34.52% for example. So the profit margin is only 14.52% for FIL-on-FIL return as an estimation. As a small miner, mining FIL is a hobby only but I still need to pay for the cost for data center and hardware equipment. With FIP-0036, I don't need to buy any additional hardware but it will be critical for me to get loans with low interest rate. So will any lender provide such low interest loans to small miners like me? I am not sure at all. |
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For existing datacap-Ed deal sectors, can we get a quick simulation on the adjusted QAP that would apply with respect to the. space time, when SP extend those sectors? Asking cuz FIP0045 doesn’t enable the existing sectors for the new QAP accounting. Thus, if the deal duration is shorter than the sector duration, then the fil+ QAP will get discounted due to the new space time when SP extend the sectors. I’m wondering how does that discount balance out with the new SDM. |
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This is really essential information that needs to be thoroughly analysed and ingested. It would be extremely useful to have this before the AMA tomorrow!! Do you have any related data that is immediately available @tmellan @vkalghatgi? |
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I tried once to do extensions on sectors holding FIL+ deals, and the QAP discounting was quite noticable. Basically lost almost all power on these sectors, as dilute heavily from larger extension. So far this has kept me from doing it again. Wonder what this would look like when the QAP from FIL+ dilute, while the duration multiplier on the other hand kicks in 😵💫 |
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@benjaminh83 once extended your 10x pledge is still locked inside according to this, correct? |
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Has anyone thought or asked what happens after the new commitment term is reached? |
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你说的非常对，这个提案只是把问题推到以后，技术和生态没有进展，就是死亡螺旋。 |
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you are right，brother |
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Constructive feedback is welcomed. However, please be mindful of the language you use. I am hiding this comment as it violates the Filecoin community Code of Conduct with the disrespectful words used in this comment. |
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Though I do think @zixuanzh’s three meta points for the community make sense, I would like to also offer 3 meta points to the CEL team and authors of this FIP 1, Talk the talk and walk the walk While you say “show long term commitment from SP” and make TVL just looks like a pleasant side effect, but didn’t see responds to the question raised serveral times about 30% to 50% consensus pledge has anything to don with long term commitment and not “locking fils for locking”. 2, Put your feet in SP’s shoes 3, Be nice to the community and don’t take community engagement as granted |
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I have no problem disclosing any part of the reviewing process. We saw @1475Notary 's Code posted and decided someone from CEL should have a look at it, being that it was thankfully open sourced so we could peek in, and see if there were any discrepancies with other models, and where these discrepancies may have come from. This is called the peer review process, and is how science works, no scientific level article gets published un-reviewed. So I reviewed this code the same way as I would peer review any other scientific manuscript for publication. This means I would point out any perceived shortcomings in methodology or communication, as well as point to other existing publications in the subject. The authors of course don't always agree with the peer reviewers, and are free to submit a response, or clarify any points, which I think is what we were doing, The authors of this simulation were explaining why they made the assumptions they made, and I appreciate their response, and their effort to keep an open discussion. It is my opinion that Starboard's model includes more relevant factors, and it is a more useful simulation for the relevant FIP 0036 questions, and so stated my opinion. I stand by it, and would recommend it again as another useful open sourced tool. Any complex problem can have many tools and different simulation approaches, the more the merrier, so I welcome other tools with other assumptions. I just ask for very clear information of what assumptions go into each model, and then different users can try out different simulations and come to their own conclusions. I don't think 1475 maliciously tried to mislead the community, and apologize if it came off that way, but I think some of the details and reasoning of their simulation were unclear, at least to me. Anything else to disclose: I am a member of CEL. Starboard are not part of CEL, but are collaborators and produce tools such as many FIL dashboards that are useful to our work. They built their ROI calculator, I had no input on that calculator, and have not consulted anyone in starboard about it. Though as @tmellan mentioned they consulted some points with other CEL members. It is open to peer reviewing the same way as I have peer reviewed 1475's simulation, and I hope more serious reviewing and commenting happens, as that's the way science moves forward. |
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isn't @zixuanzh directly involved in starboard? |
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Yes, I am involved in many aspects of the Filecoin ecosystem and contribute to many teams and initiatives to drive growth and adoption. All teams can have their own opinions, directions, assumptions, and projections. No need to get personal @f8-ptrk and I am not involved in Starboard's ROI calculator. Feel free to review their simulation and point out any flaws. AFAIK, you can set your own assumptions too. Feel free to also reach out if there is anything that I can help with you driving more growth to the Filecoin network. Please also be kind to researchers and data scientists, many people are new to our ecosystem too and they don't have to be here. |
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We at Starboard are dedicated to provide people with more visibility on Filecoin's network data and help people understand how the network works. We operate independently and are not affiliated with PL/CEL in any kind. Our ROI calculator provides economic simulation based on the FIP description and the crypto-economics of the Filecoin Network. You can change any parameters that are not fixed by the network in the calculator to reflect your view. Again, it's a tool, but not a prediction from us. We are happy for any reviews / comments / feedback from the community on the calculator. Please feel free to reach out to me or other Starboard members should you have any questions. |
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@sylvanzhang Out of curiosity, what is the business model of Starboard? There seems to be no apparent streams of revenue at 1st glance of the product. |
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Before designing and executing such a huge change, we must figure out if we can afford to expect the worst, not the best. A smarter approach is to tell people to expect that this change will always happen sometime in a year's time. , but it won't really change in the short term. Such expectations will positively lead to higher prices of FIL. Such a state of affairs would be best for Filecoin. BTW, once it is implemented really, it will most likely lose its attractiveness to many SPs. |
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I have a key problem in the calculation of SP's return with Starboard ROI calculator with FIP-0036 changes. With the default assumptions, I reset the forecast period to 20 months and daily sealing capacity to 2000 TiB/day. With the adjustment of FIL+ deal and duration multiplier, the SP's QAP should be (10 PB * 1,024 TiB/PiB) * (20 month / 12 month) * (80% * 10 + 20%) = 136,667 TiB QAP. However, the total pledges appear to be 464167.63 FIL with the sector initial pledge of 3.396 FIL/QAP, which is far from the 9.42 FIL/QAP if fip36 takes effect right now. We need to verify the rationality of Starboard's model so that SP can make the right profit forecast. |
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I am not sure if this is your issue, but have you adjusted all three of the duration variables in the model? This got me the first couple times I used the tool as well, but you have to consider them all:
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Well, I have adjusted all three of the duration variables to 20 months, which leads to 418,121.10 FIL of total pledges. Thus, the sector initial pledge of 418,121.10 / 136,667 = 3.059 FIL/TiB, which is still far from the 9.42 FIL/TiB if fip36 takes effect right now. I am not sure if everyone have this data rationality problem, but all you guys should verify the model before using it for important decision making. |
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Comment on Starboard ROI calculatorI want to re-highlight the ROI calculator the Starboard people made, i) in case anyone hasn’t seen the latest version, ii) to review some features/limitations, and iii) to share observations I’ve got from playing with it. High-level comment: the model accounts for the essential mechanistic interactions of the protocol, and includes the new features from the FIP — target locked, longer sectors, and sector duration multipliers. In my opinion these are incorporated into the model in a sensible way. You can see this yourself by looking at the source code by clicking on ‘calculator’, under the ‘Projection’ heading, 4/5ths of the way down the page. Three important notes
To get the lay of the land from the output of the Starboard model, I’ve made a spreadsheet scanning across different parameter values. This is primarily for my benefit to understand the output of their model, but I'm sharing as others may also find it useful. It can be reproduced by toggling the parameters in the Observable page. Note, small differences will occur due to the network's progression. It would be good to see if others have similar spreadsheets, perhaps with different business assumptions. |
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the starboard people have proven to have a very wrong understanding of sector life time. i doubt the assumptions they made in the calculator are any better than the "ahhhhhhhhhhhh! all those sectors will expire - 50PiB / day!!!!" we have seen in the old discussion. i mean the same flawed assumption got copy pasted above - ignoring the fact that historically a very small percentage of sectors that could have expired actually didn' get extended |
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Your main concern is capturing the high extension rate among sectors to be expired which we did. Meanwhile, let me also kindly point out that our ROI team adopts a systematic and scientific approach during the design and iteration. Before and after the beta implementation, we’ve openly exchanged modeling ideas & accuracy tests with stakeholders. You can publicly track the discussions on open slack workspaces. We’re fully aware that all models only partially represent reality. That’s why we always welcome reviews from the community and actively learn from other teams’ projections. Feel free to check the source code on ObservableHQ or DM me / any other member of the Starboard team for reference checks & questions. |
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This is great information. Good spreadsheet too @tmellan |
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Since new version of the FIP36 doesn’t change the jump of consensus pledge from 30% to 50%, thus the calculation logic of the 1475 ROI model as well as our observation and inferences are still valid IMHO. Just to reflect the change, we tuned up raw bytes growth and tuned down a little QAP growth as the default set of assumption here， but no substantial different results can be seen. Again you are free to tune those parameters as your subjective vision and get your own conclusions. |
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From the looks of it, I'm sure much hard work and thought has been put into your simulation and regardless, the conclusion is that the overall health of the Filecoin ecosystem is on a downward trajectory. FIP0036 is an attempt to stop the attrition of the on-boarding and QAP of our network (and hopefully increase and stabilize the FIL price) by increasing the TVL in the network. And I think we agree that given the difficult times the cryptocurrency markets are in, something must change to incentivize the continued growth of our ecosystem. Without a better or more thoroughly vetted option, I think FIP0036 should be implemented in a timely manner and the proposed phased rollout is prudent. After assessing the effects of the initial phase of the rollout, if there is a detrimental effect on our network, then there should be a contingency plan in place to address it IMO. |
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Hi @NSC-FIL, I do agree that we need to take actions to make the whole system back on track again and I also believe duration multiplier is a good thing for both long term commitment and re-allocate SP’s capital from hardware to TVL, however I do not agree the jump of consensus pledge to 50% is a good approach to mitigate the current situation, instead I believe it will deteriorate it. By artificially lower the SP’s ROI, it will be effectively de-incentive SP to put their FIL in pledge, just like if you see your commodity doesn’t sale well, you make price reduction, not the opposite. |
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you guys realize that if we add 6 month to the max sector lifetime every 4 weeks we will end up with 5 sector extension messages / sector. that's a questionable approach |
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Data：2022/9/14 I Suppose a change of Parameter. I think SPs will support this, small or large, new or old. As there‘ll not be a big effect for us and it will offer anyone the chance to commit longer and be rewarded more. Data：2022/9/7 For this version, i can accept that a longer sector have a multiplier, and the parameter is much better than before. And i can accept the minium sector is changed from 180days to 1 year. But i still do not figure out : in the FIP of ”Introducing a Sector Duration Multiplier for Longer Term Sector Commitment“, why ”The SectorInitialConsensusPledge multiplier will increase from 30% to 50%.“ is even discussed. For the first one that loner sector get larger reward, that is incentive for the rich Sps so that more token will be locked. For the second one that Pledge will increase from 30% to 50%（initial pledge will be 1.67X than now）, that is anti-incentive for all the SPs so that less token will be locked. These two is paradoxical for SPs to make new sealing and extention decision. And i don't think the total Pledge will rise because of the 2 opposite solutions. Maybe it is reasonable for you guys in the sight of network healthy：the macro economic is bad and we shall sacrifice Sps to save the network. But Sps who‘s struggling with the bill day by day, and support the network for years now, the FIP will drive them away. In conculsion, I suggest that the first one shall be implemented, and the second shall be discussed entirely later. |
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After 2 days, I figure out that there’s some bad outcome of the present parameter of Introducing a Sector Duration Multiplier for Longer Term Sector Commitment, that 1 year have a multiplier of 1, and 1.5 year have 1.5, so are their intial pledge. First, this parameter will onboard less sector if the SectorInitialConsensusPledge multiplier will change from 30%-50%, The parameter will decrease sector bolck reward to 67% now. This is a Sector Duration Multiplier for less Sector Commitment, you will surely drive some of SPs away, and it is only 13PB now! We don't want to see it. Second, this paremeter will drive old Sps to seal for shorter sector not longer. As we know, the FIP will be better for the Sps that do not have a lot of the equipment, so they can seal a longer time sector with less equipment, save a lot of money. But most of Sps have been in filecoin network a long time, and equipment is already buy. In this situation, as a Sp who have more equipment , what will they choose, to seal for 1 year or 1.5 year? I think it will be 1 year. Because the roi of token is the same , 1 intial pledge have 1 TB, 1.5 intial pledge have 1.5TB, but if i seal 1 years, i have the fluidity when i need it in 1 year not 1.5 year, and i have the change to extend when i do not need it. So the parameter will drive old Sps, i believe they are the majority of Sps onboarding now, the most of them will choose 1 year not 1.5 year, which means the multiplier will not help longer term sector commitment. But of course, for the guys do not have a lot of equipment, the multiplier will drive them to seal longer sector. But they are minority. And i think Gas will not be a big problem if they seal datacap and extend will always be a choice. _SO I Suppose a change of Parameter. That means, most people will still seal 540 days, which is longer than the parameter proposed now, and for the news guys, they are incenticed more to seal longer, as they can save a lot of cost of equipment! |
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Brief revisions to my summary evaluation of the prior version of this proposal. PCD risk modellingA nontrivial prove-commit failure rate does significantly impact returns, but this impact is now quantified in a sheet linked. Providers committing short-term and/or CC sectors will need to improve their operational reliability in order for this not to significantly impact returns. PoRep security impactWe have since published a draft FIP-0047 that specifies a concrete mechanism to retain the 1-5y bound on "bad" sectors, and indeed improves the status quo by traversing proof expirations on a strict schedule the SP cannot control. Assuming this proposal is also accepted, that should mitigate this risk. Inequality of access for existing sectors with FIL+ dealsThe new version addresses this challenge directly, though the only mitigation is a modest reduction in the benefit available to existing CC sectors. I think that commentary around "not what’s limiting the network" is really missing the point here, which is about inequality between existing sectors, but the authors make a claim that it's not a big deal. Note that FIP-0045 will not implement a migration of old sectors into the new FIL+ allocations model. Other shortcomingsThese all mostly still stand, although rollout shock potential is reduced (primarily by the lower multiple, rather than staged introduction). |
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Many thanks for your revisions and clarifications, Alex!! 🙏
I strongly agree with this! The inequality that this FIP potentially introduces is extremely concerning and the continued failure to adequately acknowledge and address this point is incredibly alarming!! |
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The FIP is rife with opposition to whether to abolish it. If the community members decide whether to introduce a new FIP, it should not be pushed forward centrally. |
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PiKNiK debated this FIP intensely and remains divided on the issue. Still as hosts of ESPA and a visible storage provider, we’d like to share our thoughts and offer a verdict. This debate revealed two ways to measure the health of the Filecoin ecosystem: raw byte power and price. Both of these vital signs are in jeopardy given the current market conditions. We don’t agree, but all other features and metrics are secondary. If either falter or stagnate, this project may be viewed as a failure. We agree with @DSS-AL that this is not a storage provider’s view of the ecosystem, nor the best way to evaluate its potential. However, to many outsiders, it’s unclear if Filecoin will survive to a point in time where these improvements launch and gain market adoption. We do however support FIP-0045 which separates out data cap from sector limitations like the ones we’ve all fought over, since it is in the spirit of the network's principles and lets storage providers empower customers with their data. If this is the community’s only option to attract investment into the network and ensure its continued growth, we reluctantly support it. Like all flawed paths forward, this is done in the name of the greater good. tl;dr price must go up, must store real data |
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I think many in this thread was arguing that it may not be a given that this FIP would 100% drive up the price, and instead would deter many SPs from committing more resources to the network and making the market susceptible to pump and dump schemes. |
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@Fatman13 Your and others concern around the perception of this FIP is valid. However I do believe it's wrong to look at this as a pump strategy. Rather its a mitigation strategy for the increased amount of released FIL in the coming period, which will otherwise further increase circulating supply, leading to addition supply on the market, leading to further price dumps. So I do not see it as a pump, but more like a mitigation of price dump. Further I totally agree that this FIP does not solve the underlying problem of getting even more application and services on Filecoin, driven by technical breakthroughs and upgrades like FVM. However, these things take time, and can't withstand the effects on price from increasing circulating supply. Therefore we need to keep doing all of those advancements, but we also need this FIP as a (somewhat rough) way of fixing this shorter term issue, until demand takes over from increased application and adoption. I'm a small fish as solo miner, and this will directly cut my earnings, but I see the necessary evil in this FIP, and I rather have more investment / development interest in Filecoin, rather than making more block rewards. I fully understand that not all SPs share this opinion, and its individual for each SP, as generating fiat revenue from Filecoin to cover OPEX/CAPEX is a tricky business in itself. |
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My point of view:
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For those who are not yet aware, a poll has been opened up for this FIP |
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The most striking event in the blockchain world, Ethereum Merge just happened. With Ethereum's move to PoS, Filecoin became the second-ranked PoW-based chain in the decentralized universe. An important consideration in Ethereum's switch to PoS is energy consumption. However there are still many concerns and debates in the industry regarding the security of consensus. The current consensus of Filecoin is similar to PoW, but it does not have the energy concerns that Ethereum has. This is due to the innovation of Filecoin in consensus, that is, the power of Filecoin is used for storage (or will be used for storage in the future). It is a useful consensus. As the second largest PoW network, Filecoin has the potential of a digital reserve currency aside from an utility token. From a consensus perspective, Filecoin has absolutely no need to switch to PoS., and this proposal will make Filecoin lose this possibility. This is an important reason why I'm against this proposal. Therefore, I will vote against this proposal. At the same time, I support Filecoin’s further transition to full PoW, which I expressed in my comment in #442 . Not only should we not consider this proposal, but we should also consider moving Fil+ to Layer 2 completely when FVM matures, including Market, VerifiReg; which is just one of many Markets that can be designed. For the incentive of data storage, it can be completely placed in Layer 2. This will unlock Filecoin's data storage and retrieval innovations and give Filecoin a better future. |
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I would lean away from classifying Filecoin as either Proof Of Work or Proof of Stake. It is however a Proof of Useful Storage (arguably a kind of "Stake") that is pretty reliable, stable, and tested and doesn't have the energy challenges of PoW. But I would lean away from terminology that simply doesn't apply here. |
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@hannahhoward , you are absolutely right. PoW and PoS are not very appropriate here. The use of PoW and PoS here is mainly because everyone may be more familiar with them. However, PoW is usually understood as the workload for solving crypto puzzles, and PoS refers to shares determined by the number of Tokens staked by participants. Some people say that Filecoin is like PoS, but S here refers to committed Storage, so to speak, but this is not the same as the meaning for any other PoS chains. Therefore, it is quite confusing and easy to misunderstand. Others call it PoW since it takes the physical disks invested into the network as power share, and the rewards is proportionally distributed to storage providers (miners) as defined in the Filecoin whiter paper (though the current implementation does not strictly follow it). Maybe we should use another word, PoPW (Proof of Physical Work), which is mentioned in Massari's report Using Crypto to Build Real-World Infrastructure, with Filecoin as an example. I also mentioned it in the comment of #421 . This is also more in line with the Filecoin white paper. Let's do it as what the Filecoin white paper says. |
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SXX Future Data ：Approve The reasons are as follows： Our expectations Appeal |
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how is any of this innovative? this FIP exists because someone thinks the idea of locking up X% of FIL for Y period of time doesn't work. So what innovation does this FIP provide? locking up X+Z% of FIL for Y+A period of time. wooohooo. innovation right there! Locking up 20% more FIL means that we lock up 20% more capital that could be used for actual innovation!!! Most of the simulations come to the conclusion that this FIP will punish those who actually provide utilization to the network - SPs who store data - this FIP makes data storage way more expensive - 3.5times more expensive. in the end this will make the price of FIP drop even more! forcing demand is for sure not healthy for "the economy" - its not how demand an supply driven markets work - at. all. in the end we are raising the capital that needs to be invested to generate returns by 20% without actually generating more returns (after this fip the amount of fil mined is still the same - nothing changes - we just lock up 20% more capital in FIL to generate it) - we raise the production cost for new FIL. |
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CESGINC: Disapprove I see a lot of great ideas and a great foundation of collaboration for the future. I will keep my points simple and to the point as to why I will not vote in favor of 0036. A. Two biggest concerns are
B. IMO Empty CC sectors is not the main goal.
C. Huge Incentive is already available! Verified Deals is the incentive for all SPs. Large or small. Snap into CC or create new ones. 10x the reward and 10x the collateral. This incentive does move the entire community towards our goals. D. No one really knows if this FIP will help or contribute to the concerns in A.
Summary:
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this is totally possible today - up to 5 years total lifetime of the sectors |
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FIP0036 and Deal MakingThis analysis comes from some individuals in the Bedrock team. We are programmers and product managers with deep experience in Filecoin deal making for storage and retrieval. We have written storage and retrieval markets software and data transfer protocols in wide use on Filecoin today. Today, we work on Boost, the network indexer, and expanding Filecoin retrieval capabilities. Deal Making LessonsWe have been working hard to make Filecoin more usable as a storage network since mainnet launched in 2020. We work closely with several storage providers, most of whom make Fil+ deals for real data. Deal making presents hard problems that extend beyond the mechanisms of the Filecoin chain: data preparation, data transfer, deal negotiation, content routing, content indexing, retrieval protocols and payments, etc. In most of these areas, we’ve made a lot of progress, but we have a long way to go. Providing decentralized storage and retrieval as a service on top of a blockchain is a much harder task than simply running a storage based blockchain on its own. We’ve been lucky enough to have storage providers who’ve been willing to stick with us on this journey, even when in the early days of the network, running a storage provider that stored and retrieved real data was extremely difficult. Even today, storing and retrieving real data introduces exponentially greater complexity and many more potential ways for an SP’s operation to fail. Even as we make more improvements, it will always be more complicated to run a storage provider that stores and retrieves user data than to simply seal committed capacity sectors. Arguably, SP’s get compensation for this complexity in the form of QAP from Fil+ deals though that comes with the risks of pledge collateral in line with this QAP. In the world of deal making, the reputation and trust we have with SPs is our currency. We’re asking SPs to essentially fly an airplane while we’re still in the middle of building parts of it. There is real danger if we lose trust or don’t build fast enough, interest in real storage on Filecoin could decline rapidly. As such, our analysis of FIP0036 is grounded in the need to treat Fil+ and deal making SPs as first class citizens whose trust we can’t afford to lose. FIP0036 AnalysisFIP0036 aims to address macroeconomic conditions inside and outside the Filecoin network. Much of the disagreement over FIP0036 centers on whether the FIP is the correct way to address these concerns. Some FIP discussion suggests improving deal functionality alone can fix macroeconomic conditions. This is not the case. As @dmc314 correctly points out: With this in mind we tend to agree with the existing analysis that FIP0036 will have a negative effect on Fil+ / deal making storage providers at the benefit of CC providers. CC providers will have the immediate ability to extend their sectors for a multiplier, while FIL+ and real deal providers could only extend as CC sectors. Even with CC extension on both sides, an existing Fil+ sector would go from being 10x more valuable than a CC sector, to ~3.6x more valuable¹. FIP0045 wouldn’t mitigate this for existing sectors, which is where the advantage for CC providers lies. Unfortunately, neither the most recent changes nor the accompanying explanatory prose adequately addresses these issues. Making the CC sector duration advantage a bit less doesn’t address the change in relative QAP for existing sectors in a fundamental way. A variety of modifications to the FIP have been proposed to address this issue more fundamentally, but as the FIP exists, the issue still stands. Moreover, the practical reality is that FIL+ / real data providers are often smaller operations with less capital on hand and less access to capital. This presents an additional weighting towards CC providers. We agree with most of the points in @anorth ‘s analysis here: #421 (comment) . In particular, a serious negative impact to deal making could be exactly the kind of second- or third-order effect that would ultimately determine the economic outcome of this change. Deal Making Storage Provider ConcernsUltimately, as people charged with delivering deal making, we’re not relying on complex analysis but focusing on the simple reality that many of the storage providers we directly work with — those we’re counting on to deliver storage and retrieval capabilities to clients — are unhappy and anxious about this change. Access to Capital Many of these storage providers are classified as small to medium sized based on their power in the network, and access to liquidity is difficult for them. There is real anxiety about accessing the kind of capital needed to absorb the increase in pledge collateral, with a few major factors as problems they face today with existing lenders that they work with:
It’s easy to say that’s an independent problem of making more capital available and that there is no difference in “equality of opportunity”. But none of those responses answer whether or not capital will actually be available to keep these SPs afloat when the FIP goes into effect. The task isn’t to make more lending available in the future — it’s to make sure lending is available as soon as FIP0036 rolls out. Storage Clients Deal Term Increase With the capital access problem, taking longer duration deals becomes a nontrivial issue for this set of SPs. SPs currently do not have control over deal duration, as this is a parameter that is set by storage clients on the network based on their data storage needs. Given the profile of existing clients storing data on Filecoin, we know that there is a desire to keep data on the network for longer periods of time. With the updated FIP, there’s a high possibility that storage deal aggregators and programs run by PL, such as Estuary, web3.storage, nft.storage, Slingshot, and Evergreen will all increase their deals to be the maximum duration deals. These aggregators and programs are common sources that SPs use to get started making storage deals on the network before they are able to do their own business development and client outreach. With these deal engines and aggregators making 3.5 year Fil+ deals, it becomes unreasonably expensive for smaller storage providers wanting to enter the Filecoin ecosystem and start taking deals from these known aggregators. Maintaining TrustAs some of the folks responsible for insuring the Filecoin network delivers on its promised functionality, we want to once again remind folks that even in a trustless Web 3 world, trust still matters. For those SPs willing to go along on the journey with us of building Filecoin as a storage network together, we need to treat their trust as precious. It is indeed a very limited resource that is perhaps equally valuable to the health of the network as the tokens themselves. Footnotes ¹ Current relative power is 10x for Fil+ vs CC. Post-FIP0036, assuming both parties extend to maximum duration as CC sector, the multiplier for Fil+ is (3.5x + 9x) = 12.5x where 3.5x is the new sector extension as CC, while 9x is the additional bump for Fil+ in the first year. Meanwhile, the multiplier for CC is 3.5x. 12.5/3.5 = ~3.6x relative power difference for existing sectors, assuming all parties extend to maximum. Without Fil+ extending as CC, the relative power drops to ~2.8x for existing sectors. Primary authors: @hannahhoward @brendalee |
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Exact question I had as well. Why not or can not? |
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doing CC at scale is most likely still more profitable than doing verified deals at scale'ish |
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It is also a painful experience to apply for Fil+ DataCap at scale. There is no economic reason for SPs to not take Fil+ when Fil+ is available for the same amount of input. |
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exactly, and I know there are like E-FIL+ teams and such are working how to make this experience better. That being said, current Fil+ deal focused SPs have also been spending a lot of resources on onboarding many clients through this experience, following by onboarding their data. They have been also supporting data programs like slingshot, evergreen; or providing service on storage applications like estuary, .storage while helping testing bleeding edging or WIP code - All to make Filecoin a storage network thats not only as storage capacity for when the world needs it, but also for storing humanity most important information. Therefore, while we shall acknowledge the CC focused SPs contribution to the network(which for the record, I 100% agree they are valuable to the network), the effort & the contribution from the deal SPs to the filecoin storage network/market utility and ecosystem development, should not be undervalued. Thus, I personally think, if the deal SPs are sending concerns to a proposed solution, lets at least acknowledge them and try to think about mitigations that may be applied - and I personally do believe more effort and time should be spent on this before starting a decisive poll for Last Call on this proposal. I really like what @benjaminh83 said here. We are all in this together, so its okay to disagree to commit for the better good sometime. |
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I imagine everyone is out there trying to maximize their profit? They figure they can handle he 1/10th reward penalty that comes with CC, given their scale, so that's the business model they are working with. FIL+ data is not meant to be scarce, but it currently is, would be unrealistic to fill all current CC sectors with FIL+ data. Of course this should be a network goal, to improve the availability of verified data and fill up all those empty sectors. This is well outside the scope of what this FIP can do, but of course an independent valuable goal. This doesn't mean we need to stop growing our Raw power capacity until FIL+ can catch up.
One message plus 3.5 times collateral plus 3.5 time commitment. With the current plan Deal SPs can also "press the button" at least on new sectors. |
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People think Pledge collateral will increase by a ratio of .5/.3 with #FIP0036, but it’s more complex: With FIP36, Pledge is projected to increase initially by .5/.3, but decrease over time bc of a decreasing CircSupply (bc more tokens would be locked or "at work”) Without FIP36, Pledge is still projected to increase bc CircSupply is projected to increase. See figure for governing equation and simulation of timeline under multiple scenarios:
CEL analysis: https://pl-strflt.notion.site/Duration-FIP-revisions-7426f344685940409ac513a0ffcccc86 |
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Do you have a graph similar to the one above, but with a y-axis of FIL/<<% of network power>>? Or even a y-axis of FIL/Gib RBP @1year commitment? I believe the point you're trying to make, but the graph here does nothing to help illustrate it because the effects of pledge are dwarfed by the effects of a massive spike in network QAP. |
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don't get existing sectors extended at the original pledge level when they were sealed? |
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That Word means Facing the higher Pledge, the Sps will pldege more to decrease circsupply. i think they'll pledge less, and part of them will leave, and unlucky you'll facing higher pledge, Yes, if SP pledge less, the pledge will even go higher and higher! Please never assume like this way：higher barriers，more participation and pledege. It is common sense, right? |
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At a level no lower than when they were sealed. If the new pledge should be higher, the new amount applies. |
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Total initial pledge: 136,909,365 FIL just sayin'. even this FIP kicks off and everyone x3.5's their existing sectors we have a problem |
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You might be surprised. There are two types of people who voted in favor of FIP-0036: one is the ecosystem participants who believe that this is necessary evil; the other is those who want to leave the Filecoin ecosystem completely, including some storage providers, who want to stop sealing, got all collateral and leave, they believe FIP-0036 will help short-term currency price rise, so that they could sell at a good price and leave; There are also two types of people who voted against FIP-0036: one is that they have long-term confidence in Filecoin; believe the currency price fluctuation is normal, no need to adjust through this short-term stimulation; and the other is those who think FIP -0036 won't work, or even get things worse. |
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Yes, 1/5 voting reject now. It is not the end of poll. |
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@Crypochen @f8-ptrk I put together a reproducible ( CID/URL will keep updating as I discover my misconceptions 😭 ) https://github.com/ribasushi/fil-fip36-vote-tally#fil-fip36-vote-tally ( the docs & code are a bit rough, it's 3:30am best I can do 👀 ) |
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great stuff @ribasushi ! thanks for doing that data check! |
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And of course I screwed it up 😬 Just subscribe to the github repo if you are interested in following along: https://github.com/ribasushi/fil-fip36-vote-tally. You should also follow the lotus poll tally work here: filecoin-project/lotus#9387 |
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Hello, we are the SP now, How we extend after expiration if FIP0036 passed . |
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Support To Drive FIL Supply Into The Network As part of the SP ecosystem and PL member, I want to acknowledge the challenges that storage providers are going through in these tough macroeconomics conditions. As @hannahhoward and others accurately described, access to FIL capital for pledging is a key cornerstone to enable SPs with their growth plans in onboarding data to the network. Independent from whether the community approves or rejects the poll, there is active work happening to inject more capital into our ecosystem. I want to share the efforts and commitments that PL as a network member is making to help SPs through these difficult times, and is paying attention to the unique needs of smaller and medium sized providers that are looking for access to capital. In the last couple of months different lenders have built out new lending programs, specifically to support deal-making SPs in their path to storing FIL+ data. We have seen financial institutions like Anchorage, DARMA and Coinlist come to the table and enable low collateralized lending programs. We have also seen new programs like PalladiumX and FilMine entering the space and are expecting more to emerge. These efforts successfully deployed millions of liquid FIL into our ecosystem and helped SPs with adding 100s of extra PiBs of QAP to the network. Today, the network has reached a point where the current lenders are temporarily running out of supply. The macroeconomics, the lack of awareness among token holders of the existing lending programs, and the long sales cycles, have gotten the network into a position where the supply is not keeping up with the strong growth demand of the network. As this is felt by the whole ecosystem, it is particularly hard for those smaller and medium sized storage providers that have been aggressively onboarding Fil+ data. Therefore, PL is implementing 2 initiatives:
No doubt this is a pivotal moment in our network. As someone who wakes up every day thinking about how I can help grow the network, I too carry the same anxiety. And I hope you trust that whatever the outcome of this poll leads to, that myself and our team will continue to fight the fight and pivot when necessary to support the network in creating a vibrant ecosystem. |
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It means ，PL sold 5M FIL again , f****，Naked, undisguised, reaper miners。 |
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Please re-read the post: “Make 5M FIL available through lending programs. To support our small and medium sized SPs”. These FIL will not be sold - they will be lent to small and medium SPs who are storing useful data, to be used as collateral and help them accelerate their data onboarding. That means this FIL will be locked in the network for the entire storage term - not sold or made liquid for trading. |
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Is the 5M FIL purchased from the exchange ? |
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@pl, send me a million FIL please 😛 , i'll start a lending program! No problem! Interest rate @ 45% (bargain!) |
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That is a good start! We really need to start to discuss the loan market build on FVM. Filecoin loan market shall be so diffierent from other Defi. Some interest points:
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Time is up , and the voteing still continue ? | core_dev (Count) | 0 | 0 |
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Voting is still in progress, it ends at 2022-09-28 22:00 (UTC) |
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Hey folks - piping up from the Data Programs team (we collab with FF on Fil+, and work on Slingshot, the Evergreen deal engine, Singularity, among others). It has been great to see all the discourse on this FIP and regardless of the outcome, this will serve as really good learning for the ecosystem in how we can collaborate better and make complex decisions in a decentralized way. We have the privilege of working closely with several members in our community. From interactions over the last several weeks, we feel like we have a pretty good handle on the cases for folks voting in both directions on this FIP and understand where they are coming from. Regardless of the outcome of this FIP, I want to affirm that we're here to support deal making SPs - this is a priority for us given the network state today and how early we are in the lifecycle of Filecoin. That means that if this FIP passes, we will work towards building the tools/services/resources that we can to help deal making SPs of any size continue to thrive on this network and ensure Filecoin progresses towards its mission of storing humanity's most important information. Specifically, two things come up as immediate priorities:
As Stefaan put it so well:
Please let me know if you have any questions or join us in Slack to continue discussions on the above points. |
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Hi. I am really wondering why the result of the Core Dev group is still changed after the end time. We treat this voting as an important event and put more than 800 thousand FIL and 700 PiB to support the FIP. But it seems like the voting process did not run according to the community voting rule. |
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rest assured that votes that came in too late will not be counted - the dashboard on observeable is not live btw |
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Hi @mitchellsoo! @f8-ptrk is correct. All the voting was time -bound, and no more votes are being accepted. Core Devs all voted as token holders and need to have their addresses 1) instantiated on-chain, if they aren't already, and 2) whitelisted in post-processing. It's a slow process, but rest assured, Core Devs were bound by the same rules as everyone else. And I am sorry that the final results were not able to be live!! I'm pushing for confirmation of final tallies by end of day (PST) today. |
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and others
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Authors: @AxCortesCubero, @jbenet, @misilva73, @momack2, @tmellan, @vkalghatgi, @zixuanzh
Important Notice! Taking into account many of the points raised regarding SP preferences and general community feedback, we propose revising two key elements of the proposal
Introduction
The updates to FIP-0036 below reflect the work of CryptoEconLab (CEL) and its network of contributors to propose community centered protocol improvements, while also supporting the health, stability, and prosperity of the Filecoin economy and its participants. The macroeconomic commentary here can help provide some shared context for us admist navigating this FIP, its potential inclusion in upcoming network upgrades, and, why many believe in strong net benefits to inclusion in the nv17 upgrade, pending community support and acceptance.
Thank you all for your continued insights and collaboration on present and future Filecoin Improvement Proposals.
Simple Summary
History of FIP-0036
This FIP seeks to improve the stability of storage commitments underlying the network and strengthen the Filecoin Economy amidst an uncertain macroeconomic climate, ultimately improving the stability and predictability of Storage Provider (SP) returns.
Protocol Labs (PL) and CEL researchers investigated potential protocol improvements in April/May, and, began the initial FIP discussion in June. Initial parameter recommendations followed in the first FIP Draft, supported by CEL modeling. Following SP and community feedback, several parameters were adjusted, investigated, and discussed. Over the course of many months in which the community continuously supplied feedback, questions, and identified points of disagreement/concern, FIP-0036 now exists in its current form, supported by analysis and modeling from both CEL and its broader network.
Problem Motivation
Currently, Storage Providers do not receive any additional compensation or incentive for committing longer term sectors (whether that be CC or storage deals) to the network. The protocol places equal value on 180 to 540 day sectors in terms of storage mining rewards. However, in making an upfront commitment to longer term sectors, Storage Providers take on additional operational risks (more can go wrong in a longer time period), and lock rewards for longer. Furthermore, in committing longer term sectors/deals, Storage Providers demonstrate their long-term commitment to the mission and growth of the Filecoin Network, and are more aligned with client preference for persistent storage. Therefore, the added value of longer-term sector commitments, coupled with the compounded operational/liquidity risks Storage Providers incur for committing longer term sectors should be compensated for in the form of increased rewards.
From a macroeconomic perspective, incentives to seal for longer durations affect the circulating supply dynamics of the network, since collateral is locked for longer. As the network exists in its current state, the percentage of FIL locked on the network is more likely to decline. FIP-0036 introduces more favorable percentage locked value dynamics, while simultaneously ensuring that this increase in locking contributes to network utility, stable circulating supply dynamics, and SP profitability and optionality.
Per the economic preference to increase the percentage value locked, we also propose adjusting the Initial Consensus Pledge Mutliplier to 50%. The intention is to create long-term aligned total value locked (TVL) dynamics to support stable and predictable conditions for Storage Provider (SP) returns. We further discuss the problem/change motivation, and explore impacts on SP profitability and network macroeconomics in the CEL analysis brief here.
The motivation to increase the minimum and maximum sector durations is decreased sector turnover and improved network stability. Given that the network expects to grow, having sectors that expire every 6 months means that the network potentially needs to find new sealing throughput to compensate for the loss of power from expiration. This hinders the network as it continues to scale.
Another perspective is that block rewards are high now but exponentially decreasing, and these high early rewards should be used to incentivize participation that’s long-term aligned with the network. 6 months is not long-term. In particular it's short over the scale we need stability in the supply dynamics. Increasing the minimum duration from 6 months to 1 year doubles the minimum level of commitment, and smooths out locking dynamics by stretching inflow-outflow over a longer time period, all while impacting relatively few Storage Providers as sector durations for CC and FIL+ are both substantially above the minimum on average.
Finally, the new maximum limit of 3.5 years gives SPs the option to express a long-term commitment and bullish view on the network which was previously not possible with the maximum sector duration length of 540 days, and also receive commensurate rewards.
Specification
Sector Duration Multiplier
The current sector quality multiplier follows from the spec here. The notion of Sector Quality currently distinguishes between sectors with heuristics indicating the presence of valuable data.
Sector Quality Adjusted Power is a weighted average of the quality of its space and it is based on the size, duration and quality of its deals.
The formula for calculating Sector Quality Adjusted Power (or QAP, often referred to as power) makes use of the following factors:
dealSpaceTime: sum of theduration*sizeof each dealverifiedSpaceTime: sum of theduration*sizeof each verified dealbaseSpaceTime(spacetime without deals):sectorSize*sectorDuration - dealSpaceTime - verifiedSpaceTimeBased on these the average quality of a sector is:
$$avgQuality = \frac{baseSpaceTime \cdot QBM + dealSpaceTime \cdot DWM + verifiedSpaceTime \cdot VDWM}{sectorSize \cdot sectorDuration \cdot QBM}$$
The Sector Quality Adjusted Power is:
Proposed Protocol Change:
Introduce a multiplier based on sector duration
This SectorDurationMultiplier function proposed is linear with slope 1. See below for the function proposed.
The rationale to select this linear slope 1 function is based on a principle that the selected parameters should maximize the effectiveness of the duration incentive, subject to SP’s collateral availability constraints, while taking into account micro and macroeconomic consequences with minimal added implementation complexity. Further analysis/simulation is shown in the analysis brief CEL prepared linked here and above.
Therefore, the new suggested Sector Quality Adjusted Power is:
Change to Minimum Sector Commitment
We propose a minimum sector commitment of 1 year. This is a ~180-day increase from the current minimum of 6 months. This will not change the mechanics of sector pre-commit and proving; it will just adjust the minimum sector commitment lifetime to 1-year.
Change to Maximum Sector Commitment
We propose a maximum sector commitment of 3.5 years. This is an increase from the current maximum sector commitment of 540 days. Note, the protocol currently sets a maximum sector lifetime to 5 years (i.e sectors can be extended up to 5 years). This FIP would not adjust that. CryptoEconLab had originally suggested increasing the maximum sector commitment duration to 5-years, in line with the maximum lifetime for a sector. The community (particularly many Storage Providers) expressed a desire that these changes roll out more gradually, be monitored, and then adjusted accordingly in subsequent network upgrades. Indeed, this desire for gradual/softer rollout informs the change to gradually increase the maximum sector duration over the course of one month. Further, if this policy were to enter the network, robust monitoring is in place to investigate storage onboarding, sectors/deal durations, Circulating Supply dynamics, and other key network health indicators.
Change to PreCommitDeposit
With this FIP, sectors can get higher quality multipliers and receive higher expected rewards than currently possible. This has an impact on the value of the PreCommit Deposit (PCD). From the security point of view, PCD has to be large enough in order to consume the expected gain of a provider that is able to pass the PoRep phase with an invalid replica (i.e. gaining block rewards without storing). The recent FIP-0034 sets the PCD to 20 days of expected reward for a sector of quality 10 (max sector quality currently possible via FIL+ incentives). We now need to increase this to 20 days of expected reward for a sector of quality 35 (the new max quality) to maintain the status quo about PoRep security.
Initial Pledge Calculation
The change we propose to status quo Initial Pledge Calculations is the change to the SectorInitialConsensusPledge calculation as detailed below.
The protocol defines Sector Initial Pledge as:
Currently,
We propose changing the calculation to a multiplier of 50%:
Impact on Fault and Termination Fees
We currently propose no change to status quo Fault and Termination Fee calculations. Fees continue to be based on expected daily block rewards. In the future it may be valuable to re-examine the 90 day duration for the maximum termination fee.
Design Rationale
Supporting Longer-Term Commitments
The current maximum commitment of 1.5 years limits the ability for SPs to make a long-term commitment to the network (or get rewarded for it). We expect that increasing the maximum allowable commitment to 3.5 years, while also introducing incentives to seal sectors for longer, can increase the stability of storage and predictability of rewards for SP’s. This is further discussed in the sections below.
Incentivizing Longer Term Commitments
Longer term commitments are incentivized by a rewards multiplier. The multiplier increases the amount of FIL expected to be won per sector per unit time based on the duration the sector is committed for.
The proposed rewards multiplier is linear in duration. This means sectors recieve rewards at a rate linearly proportional to duration.
Example:
The rationale is that operational burden and risk to Storage Providers increases with duration, and it is fair that they’re commensurately rewarded for this.
To maintain protocol incentives that are robust to consistent storage, the amount of collateral temporarily locked for the duration of the sector must also increase. Sector sealing gas costs do not increase with the multiplier. This means longer durations have higher capital efficiency, which further incentives longer commitments.
The form of the duration incentive multiplier is linear with slope 1. The factors behind this specific design choice to incentivize longer commitments are:
Refusing Shorter-Term Commitments
Currently the minimum sector duration is six months. A new minimum duration of one year is proposed. The rationale is based on three factors:
Furthermore, there is empirical evidence from the duration of sectors sealed that most Storage Providers support sectors greater than one year. Increasing the minimum from six months to one year will discourage only the most short-term-aligned Storage Providers.
Improving Stability of Rewards
A stable investing environment is needed to support long-term storage businesses. A high double-digit percentage return on pledge locked is not sufficient alone. To this end a sustained and substantial amount of locked supply is also needed.
In reality, the percentage of available supply locked has been decreasing since September 2021. While current token emission rate is exponentially decreasing with time, the percentage of available supply locked is expected to continue to decline, at least until the linear vesting schedule completes, based on current locking inflow-outflows and network transaction fees.
This environment can be improved however. The first way to improve it is by increasing the 30% multiplier in the InitialConsensusPledge to 50%. This is a moderate increase that provides a solid long-term improvement in percentage of available supply locked. The second way is a corollary of the duration multiplier incentive. Longer sectors mean collateral is locked for longer. All else equal, at equilibrium this means the total amount of locked collateral is consistently higher. Simulations confirm both effects together can target a percentage of available supply locked that is sufficiently high and sustained to substantially improve the long-term storage business environment. See Supplementary Information for a detailed summary of the supporting simulation analysis, along with the open-sourced Starboard ROI Calculator designed to aid Storage Providers in examining their risk/return profile under this FIP.
Rebalancing SP Profitability
Return on investment from pledged collateral provided by the storage rewards are currently substantial, with Filecoin-denominated returns in high double digits. Yet Filecoin-denominated returns are only part of what is needed to support successful long-term storage.
Simulations indicate a better balance between current and future rewards can be achieved through the proposed changes. The proposals adjust the Filecoin-denominated minting-based returns to a more sustainable level in the immediate term, while the long-term trajectory is unchanged. This enables improving the percentage locked supply to stabilize the business environment for long-term network success. See Supplementary Information and the open-sourced Starboard ROI Calculator for further details for percentage return on invested collaterals from mining reward.
Impact on Initial Pledge
The initial pledge per raw byte power will increase. This is by design. It intends to increase the percentage of available supply locked.
The initial pledge per quality adjusted power, which is the relevant measure for Storage Provider’s return on pledge invested, may be marginally higher than current to begin with, but will decrease with time. See Supplementary Information for plausible trajectories across different new average duration scenarios.
Impact on Pre-Commit Deposit
FIP-0034 sets the pre-commit deposit to a fixed value regardless of sector content. From a security point of view, PCD has to be large enough in order to cover the expected gain of a provider that is able to pass the PoRep phase with an invalid replica (i.e. gaining block rewards without storing). The recent FIP-0034 sets the PCD to 20 days of expected reward for a sector of quality 10 (max quality). We now need to increase this to 20 days of expected reward for a sector of quality 35 (the new max quality) to maintain the status quo about PoRep security.
As of end of August 2022, the calculations are approximately:
Per the change proposed by the FIP, the ConsensusPledge is calculated as:
PCD risk was more pronounced in previous iterations of the FIP when pre-commit deposit was larger then Initial Pledges for lower QAP sectors. This was because the maximum sector power was higher at a 50x multiplier. Given that this revised FIP caps max sector duration at 3.5 years, and, therefore, caps the maximum QAP multiplier to 35x, in most cases, we expect PCD to be less than or equal to the initial pledge for a sector, which means that Storage Providers will have to lock at least this much anyway by the time the sector is proven. We expect this relationship to continue to hold, as FIL supply expands over time with long-term vesting and emissions, and (2) the expected reward per sector falls over time with growth in network capacity and decaying block reward. CEL has produced an accompanying tool with supporting documentation, allowing Storage Providers to estimate their expected FIL-on-FIL return given their projected failure rate to proveCommit sectors.
Backwards Compatibility
This policy would apply at Sector Extension and Upgrade for existing sectors.
Extensions for FIL+ and CC Sectors
A point raised by the community concerns the relative ability for Committed Capacity (CC) sectors and FIL+ sectors to extend their sectors upon this policy's implementation. In particular, many of these concerns centered on the ability for CC sectors to instantly extend to gain a potential maximum multiplier on their QAP. FIP-0036 now introduces a softer version of the policy, capping the max sector duration commitment to 3.5 years instead of the previously proposed 5-year time-span, and gradually phasing in the increase to maximum commitment.
This difference in ability for FIL+ and CC sectors to extend was primarily a concern because of potential drops in block reward shares for specific SP profiles. An important note here: drops in block reward shares can always happen. Other SPs can always increase onboarding causing another group’s proportion to drop. The difference then primarily arises from the comparative difficulty in terms of time and effort of onboarding FIL+ compared to CC onboarding or extension. This is concretely mitigated by pledge per QAP dynamics. Though committing soon is good, waiting longer means entering when pledge per QAP is lower.
To make it clear that the inequality of access is not what’s limiting the network, consider an example:
Differences between FIL+ and CC sectors are marginal from an equity of opportunity standpoint, especially given the phasing in of the policy, the cap on maximum duration of 3.5 years, and the multiplicative nature of the Duration incentive on FIL+ ones. The primary limiting factor is new onboarding which is limited by availability of capital flowing into the network. This is a limitation that extending sectors and onboarding of new ones both share in common. Therefore, we shouldn’t strongly weight differences in capacity to extend to be a sufficient source of inequality to reject the proposal. It is more important to promote a stable, long-term oriented network capable of attracting new capital investment.
Test Cases
N/A
Security Considerations
Risks of Faulty Proof-of-Replication (PoRep)
The existing 1.5 year sector duration limit in effect provides a built-in rotation mechanism that can be used to turn over power in the event we discover a flaw in PoRep. Increasing the maximum commitment to 3.5 years weakens this mechanism. FIP-0047 sets forth a policy to be adopted in case a flaw is discovered in the theory or implementation of proof-of-replication (note, that at this time we are not aware of any PoRep issues - FIP-0047 is purely proactive in nature) The policy is that, in case of a PoRep flaw, the RefreshProofExpiration method is disallowed for sectors sealed with the vulnerable code. In order to maintain power, a provider must seal a new replacement sector before each existing sector’s ProofExpriration epoch is reached. If not replaced, a sector with a proof expiration before its commitment expiration will incur a termination fee (for example, the current sector early-termination penalty).
Risks to Consensus
The proposed rewards multiplier increases potential risk to consensus. The main consideration is how long it would take for a colluding consortium of Storage Providers to exceed threshold values of consensus power.
Analysis indicates a malicious consortium would need consistent access to high levels of FIL+, and near-exclusive access to the maximum rewards multiplier, for a substantial period of time, for a viable attack. It is worth noting therefore, that this is the scenario outlined below is an improbable "worst-case" scenario, relying on several unlikely "worst-case" events over sustained periods of time.
Example:
The network currently has 18 EiB of quality adjusted power.
Consider the scenario of 50 PiB/day onboarding, with 5% attributed to FIL+, and that this is sustained for several months.
Now if the malicious consortium can acquire 50% of FIL+ deals and commit sectors for 3.5 years to gain the maximum duration multiplier, and all other storage power maintain the lowest possible duration sectors of 1 year, then in a single day, the adversarial colluding group is expected to gain 0.3% of consensus power. This follows from:
where
advFILplusPctis the fraction of FILplus deals available that are acquired by the adversary,FILplusMultiplieris the 10x FIL+ power multiplier,durationMultiplieris the maximum 5 year duration multiplier (5 * 1),powerOnboardingis the byte power onboarded, andFILplusPctis the fraction of the power that is FIL+.If this scenario is maintained, the adversarial group is expected to exceed 33% of consensus power within 140 days.
Factors that mitigate this risk are that it’s unlikely a single group could achieve 50% of FIL+ power consistently, and unlikely that the adversarial group exclusively takes up the longer duration sectors with enhanced power multipliers.
A limitation is that the above calculation assumes the malicious party is starting from 0% of consensus power. If they already control 10%, time to 33% is reduced to approximately 100 days.
Rollout Shock
Initial iterations of this FIP suggested a potential maximum 10x multiplier on CC sectors of maximum duration. This could create a rollout shock if SPs race to extend their commitments and gain a further 10x multiplier. The new proposed iteration of the policy gradually phases in a maximum CC multiplier of 3.5x This is, in part, due to the preference to gradually introduce changes to the network, monitor the impacts, and then strengthen/adjust policy in subsequent upgrades, mitigating risks of immediate network changes.
Product & Incentive Considerations
As discussed in the problem motivation section, this FIP introduces incentives to further align the cryptoeconomic schema of the Filecoin Network with intended goals of the network to provide useful and reliable storage. We introduce the idea that longer term sectors represent a long-term investment and commitment to the Filecoin ecosystem, and therefore should be rewarded proportionally with greater block reward shares.
Note, we also introduce the possibility for Storage Providers to receive additional multipliers from committing CC for longer. Even this has added value insofar as it represents a commitment to the ecosystem long term that should be rewarded.
From a product perspective, we see strong support for a network more aligned with longer-term stable storage. From a recent (< 3 week old) snapshot of all LDN applications, the responses fall into the buckets below. Almost half (47%) of all applicants want long-term or "permanent" storage.
We recognize that this proposal may not align with a small fraction of SP’s who exclusively prefer shorter commitments to the network, but contend that from an ecosystem perspective, this policy on aggregate makes most participants better off. Note, regular deals can still be accepted for less than sector duration, so there should be minimal loss to flexibility for onboarding clients.
For smaller SP’s, introducing this policy could help improve their competitiveness and ability to capture network block rewards, Under this proposal, returns on tokens put up as collateral scale linearly for all SP’s (regardless of size), whereas only larger ones are able to take advantage of economies of scale for hardware. This proposal, if anything, should benefit smaller SP’s because they can still get rewards boost/multipliers without prohibitively expensive hardware costs, and termination risks associated with FIL+ data.
Implementation
TBD
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