Resource Supply Rewards

Tokens are automatically distributed by the Network to the operators of Nodes as payment for the supply of data storage, bandwidth, and compute resources: these are Resource Supply Rewards. They make up 85% of each Data Payment made to the Network.

Before a file is stored on the Network, it is broken into chunks and encrypted. Each chunk has a unique hash value from which its Network address is derived.

Nodes also have a unique Network address. Data is stored on the nodes which have the closest Network address to the data itself.

A client can find the nodes that are closest to a chunk’s address by querying the Network. Once it knows the closest nodes, it performs a ‘store cost’ query to ask the price to store data at that location. The price depends on the storage capacity of the nodes, which ultimately depends on demand.

Once the client knows the store costs offered by the closest nodes, it picks one and sends the data along with the transfer paying for it. Upon receiving the data, the chosen node verifies the transfer, takes the payment, verifies the data itself and stores it. It is then replicated to the other close nodes. To receive payment a node needs to store new data and already have all the existing data in its range. When receiving data payments, nodes make sure that both their Resource Supply Reward and Network Royalty are valid before storing the data.