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Network Economics

In a peer-to-peer, decentralized system, the economic model is one of the most critical components—delivering the incentives of supply and demand to effectively attract, engage and reward participants. Autonomi's economic system is designed to:

Incentivize Node Operators

Encourage node operators to contribute storage space, bandwidth, and computing resources, thereby fostering growth and scalability.

Establish a Governable Economic Framework

Construct a resilient economic framework capable of adapting to changes in the external environment.

Drive Growth in Network Size and Utility

Support the resilience and growth of the Network by rewarding developers, strategic partners and other key contributors.

Sustainably Reward Creativity and Innovation

Meaningful rewards for software development, services, and data that provide value to those using the Network, and that benefit wider society.

Key Properties

There is a fixed Maximum Supply of 4,294,967,296 tokens. While capped, the rate at which the token supply approaches follows a tuneable emission and supply schedule.
Token rewards will be distributed evenly across eligible nodes without having nodes compete against each other in computational power or staked token quantity, addressing the consolidation of power issues with tokenomics built on top of PoW, PoS and PoS consensus mechanism.
Every data upload incurs payments from up-loaders to node operators. Unlike conventional cloud or decentralized storage, there is no extra cost other than the initial data payment, preventing cost escalation. This transparent payment system ensures predictability and affordability for users, and allows applications and services to scale rapidly without large data or infrastructure cost burdens.
Physical infrastructure-based decentralized platforms require upfront infrastructure availability before usage can scale. To drive node network growth, new token emission incentivises node operators independent of current network usage levels.
Node operators are incentivized to remain online as the expected rewards increase linearly with the node's uptime (proof-of-uptime).
Node operators are incentivized to provide correct service to the network, as incorrect service results in prompt exclusion from the rewards program (proof-of-correctness).

Token Supply

There will be a total Maximum Supply of whole tokens created over the Network’s lifetime. That's 4,294,967,296.

Genesis Supply

At the inception of the Network, a Genesis Supply of 1,288,490,189 tokens will be issued, and . This represents 30% of the Maximum Supply.

Remaining Supply

The remaining 70% of the supply will be emitted by the Network over approximately 30 years.

Tokens will be emitted during an upload event and become available to the node operator. The number of tokens emitted as the result of each event will be in proportion to the amount of data stored. Emissions will continue until the Maximum Supply is reached, according to the .

Divisibility

Each whole token can be subdivided $10^9$ times, creating a total of 4,294,967,296,000,000,000 available sub-units, or nanos.

Resources and Currency Supply

Autonomi tokens are recycled when users exchange them for Network services, which means that there will always be a supply for node operators to earn.

Tokens will be emitted during an upload event and become available to either the client or node operator. The number of tokens emitted as the result of each event will be in proportion to the amount of data stored. Emission will continue until the Maximum Supply is reached.

At the time of writing the Autonomi Network is still pre-release. However, a token called MaidSafeCoin (eMAID and MAID) can be purchased on cryptocurrency exchanges. When the Network goes live MAID will be exchanged for the live Network token on a 1:1 basis.

Nodes all have the same capacity and on average over time will all be as full as each other, but there will be some local variations which leads to fuller nodes quoting higher prices. The client should choose the lowest store cost offered for each chunk stored.

The rate of payment will also depend on the ‘storage reward rate’, which is a variable based on the quantity of free resources in the Network as well as the number of tokens in circulation.

This happens automatically, and the effect is to create an incentive for those supplying resources to provide storage when the overall spare capacity is low, and a disincentive when the amount of free space is high.

By adjusting the storage reward rate according to the amount of free available space on the Network, users storing data are charged at the optimum rate. This supply and demand relationship results in dynamic pricing, translating into competitive prices for data storage

By adjusting the storage reward rate according to the amount of free available space on the Network, users storing data are charged at the optimum rate.

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.

Dynamic Pricing

The data payment amount is regulated by the dynamic pricing formula, which is designed to facilitate the network's scalability in tandem with its usage. Additionally, dynamic pricing serves to bolster network stability by deterring spam uploads.

$price=-\frac{20}{r-1}+10$

where

$r$ represents the Network fullness. $r=\frac {capacity_{occupied}}{capacity_{total}}$

As illustrated in the figure above, Dynamic Pricing reflects a correlation between network capacity and price. When network capacity is ample, prices remain low, incentivizing increased data uploads. Conversely, when network capacity is limited, prices rise to encourage more node operators to join. This dynamic relationship between storage capacity and price ensures that node operators are appropriately incentivized as the network necessitates additional capacity.

As the network approaches full capacity, prices increase exponentially to deter the acceptance of data exceeding its limits. This mechanism safeguards the network from becoming overloaded with data beyond its capacity.

Emissions Schedule

The foundational premise of Autonomi asserts that larger network sizes correlate with enhanced performance and heightened security. However, the dynamic pricing mechanism, while effective in providing a supply-and-demand-based incentive structure that augments rewards as demand rises, operates retrospectively. In essence, rewards only increase once new demand has emerged. This retrospective nature can potentially delay network growth due to market inefficiencies. The time lag between increased prices and the subsequent generation of additional resource supply could impede network expansion and adversely affect user experience.

The emission of the remaining token supply, comprising 70% of the maximum supply, will serve as a forward-looking incentive mechanism, ensuring consistent and dependable rewards for participants. Specifically, 70% of the remaining supply (49% of the total supply) will be distributed to the nodes participating in data storage as storage emissions. The remaining 30% (21% of the total supply) will be reserved for the potential future utility of the network nodes.

The storage reward emission rate the $i^{th}$ day after the genesis is defined by the following formula:

e_i=0.000175 \cdot 0.49 \cdot supply_{max}(1-ratio_{supply})

Where:

supply_{max}

is the maximum token supply, and

ratio_{supply}=\frac{\sum\limits_{j=0}^{i-1}e_j}{0.49 \cdot supply_{max}}

50% of the storage emissions will be distributed over a period of 9 years, while 90% will be distributed in approximately 30 years. The yearly inflation rate will start at approximately 10% in the first year and decrease gradually each subsequent year. It is anticipated that the significance of the emission-based reward will diminish over time, with node incentives eventually relying fully on data payment as the network matures.

Token Distribution and Payment Flows

Data payments serve as a fundamental incentive mechanism through which data uploaders directly compensate node operators for network utility. When a file is uploaded to the Network, it will be broken down into multiple small chunks, with each chunk assigned its own network address based on its content. These chunks will then be stored in a group of nodes whose network addresses are close to the respective chunk. Since the chunk hash is randomly distributed over the address space, data payment will be random and evenly distributed at scale.

As the network scales, the likelihood of a node receiving data payment increases linearly with its uptime. Nodes that don’t contribute to the protocol will be ignored by neighbouring nodes, thereby excluding them from the reward mechanism. These mechanisms resemble Proof-of-Uptime and Proof-of-Correctness models employed by other decentralised protocols to encourage desirable participant behaviour.

Initially, 85% of the payment is allocated to node operators, while the remainder replenishes the Network Royalties Pool, intended to foster ecosystem growth. As the network matures, it will transition towards automatic distribution of Network Royalties to the builders based on the KPIs of the projects, effectively replacing the funds managed by the Foundation.

Furthermore, the data payments are designed to include a burn mechanism, through which a portion of the data payment can be permanently eliminated if necessary to manage the token supply as the Network matures.

Distribution of the Genesis Supply

When the Network is launched, a Genesis Supply of 1,288,490,189 tokens will be created. This is 30% of the . These tokens will be distributed as follows:

MaidSafeCoin Holders

After the launch of the Network, holders of MaidSafeCoin will be entitled to swap their coins for the new Autonomi token on a 1:1 basis.

This applies to both the original coins issued on the Omni layer (MAID) and the ERC-20 version (eMAID).

Holders of MaidSafeCoin will collectively be allocated 452,552,412 tokens. That's 10.536806937% of the Maximum Supply.

What is MaidSafeCoin?

MaidSafeCoin is a proxy token issued as part of a crowd-sale (or ICO) in April of 2014 that supported the development of the Network. In fact this was only the second ever ICO, and sold out in a matter of hours.

It was accompanied by the publication of the original .

This is an increase from the allocation of 10% described in the original project white paper, accounting for an additional 23,055,683 MaidSafeCoins issued during the crowd sale. Tokens will be distributed to MaidSafeCoin holders in the form of an airdrop, with each MaidSafeCoin entitling the bearer to one Network token.

MaidSafe Shareholders

Each company share of Maidsafe.net Limited will entitle the bearer to 105.8221941 tokens, resulting in shareholders being allocated 214,748,365 tokens. This is 5% of the Maximum Supply.

Any unclaimed shareholder funds will be held by the Foundation for a period of seven years following the inception of the Network, after which these tokens will be transferred to the Network Royalties Pool.

Network Royalties Pool

Out of the Genesis Supply, 621,189,412 tokens will be allocated to a Network Royalty Pool and distributed as Network Royalties. This is 14.463193063% of the Maximum Supply.

This initial Royalties Pool will be split into the following funds:

Core Contributors

The allocation for Core Contributors will be distributed to individuals and teams responsible for developing and maintaining Autonomi and its protocol. All tokens designated for Core Contributors will undergo a lockup period with gradual unlocking. Core Contributors will be allocated 27.6% of the Genesis Network Royalties Pool.

Seed Fund

The Seed Fund aims to assist developers with promising ideas for applications in turning their imaginations into reality on Autonomi. This allocation, which primarily targets early-stage projects, will initially be administered through a grants program operated by the Foundation.

The Seed Fund will be allocated 13.8% of the Genesis Network Royalties Pool.

Impact Fund

The Impact Fund aims to reward projects that have generated significant positive impact on the Network and its community retrospectively. This fund allows for the recognition of projects without necessarily generating profit from users. It facilitates the development of non-profit core applications to enable an active and feature-rich ecosystem. The Impact Fund will be allocated 20.7% of the Genesis Network Royalties Pool.

Data Fund

The Data Fund is intended to reward data producers whi provide useful data to the network, opening up possibilities for a wide array of data-intensive applications with Autonomi. The Data Fund will be allocated 10.3% of the Genesis Network Royalties Pool.

Partner Fund

The Partner Fund will be distributed to strategic partners by the Autonomi Foundation to foster ecosystem growth.

The Data Fund will be allocated 13.8% of the Genesis Network Royalties Pool.

Unallocated Fund

The Unallocated Fund will serve to cover various costs essential for the growth and operation of the Network. The Unallocated Fund will make up the remaining 13.8% of the Genesis Network Royalties Pool.