This article contains an update from a joint study by Filecoin x BlockScience about Filecoin reaching a major milestone. This update was first published here by Blockscience, and here are the main points.
The Filecoin Network baseline exceeds its baseline target for the first time! This important milestone marks a shift in the Filecoin network’s path to sustainability. The breakthrough of the baseline occurred on April 2, 2021 at 05:00 UTC, or December 21, 2020 at 00:00 UTC in terms of network effective time, which is one of the keys to the importance of reaching the baseline casting.
Figure 1: Network arithmetic breaks the baseline
At this point, Filecoin’s storage arithmetic, or total network storage capacity in raw bytes, reached 3898.8 PiB: the exact baseline function value at the moment.
One consequence of breaking the baseline is that the Filecoin network is now distributing the released block rewards at full speed as the baseline casting continues to saturate!
This means that the crypto economy in the system moves into the next period, where the network’s goal transitions from building capacity to becoming a scalable chain.
We will be writing two reports on what this new period means for the future of Filecoin. The first report will address the importance of this transition and provide near-term development forecasts. The second report will focus on the technical features and explore the impact of benchmark casting from a data and modeling perspective.
All visualizations and projections are based on publicly available Filecoin data, and interactive notes can be found here.
Why Breaking the Baseline is Significant
The first phase of the “capacity building” period (see Figure 2 below) focused on creating a healthy ecosystem. This requires applying the scientific “first principles” of the Filecoin crypto economy to effectively solve the chicken-and-egg problem by incentivizing rapid growth in storage supply, i.e., “capacity supply depends on capacity demand, and capacity demand depends on capacity supply “The problem.
With sufficient storage supply, both storage providers and users are engaged in the ecosystem and reap the added value. The cryptographic economic incentives then begin to converge towards the medium-term vision of Phase 2, where the “chicken and egg” problem is solved and the new attitude is to maximize efficiency for the future. The “tipping point” for storage provisioning is when Filecoin storage arithmetic exceeds the network baseline – the transition is complete!
Figure 2: Filecoin economy stages (see the mint model for more details)
The mechanism of operation of the new phase is completely different from the previous one. From now on, network rules will encourage more efficient operators in proof and retrieval behavior. In addition, the market for stored trading orders will become an important consideration in the direct incentive mechanism for participation.
That is, the incentive goal has shifted from crude capacity building to building capacity that matches supply and demand and is fully sustainable.
The eventual shift from Phase 2 to Phase 3 in Figure 2 will require a concerted effort by all Filecoin participants to further increase the utility of the network. In this phase, Fielcoin will become a multifaceted utility network for goods and services, with a large community of participants taking a long-term view and consolidating the network’s productivity and effectiveness.
What is the network baseline?
Filecoin has a unique blockchain economic model with a minting approach that blends simple minting with innovative benchmark minting. Simple minting is the standard form of index commonly used in the cryptocurrency ecosystem, while benchmark minting has a target that changes and grows, distributing rewards based on the available network capacity.
The combination of these two minting mechanisms, one independent of network capacity and the other constantly adjusted to actual conditions, allows Filecoin to adapt its incentive approach to a variety of scenarios, both ideal and non-ideal. In the ideal situation, the network operates as planned and growth is further facilitated by the fact that growth under the baseline minting mechanism unlocks minting opportunities more quickly. If the system suffers an unexpected shock, such as a sudden capacity constraint, the simple minting mechanism provides reliable minting support to “tide participants over”, offsetting and mitigating the effects of short-term fluctuations and allowing the system to recover smoothly and efficiently by bringing new storage online.
It is worth noting that the baseline minting reserves some of the Filecoin released during low activity, so that network participants do not lose momentum when activity returns. At the same time, simple casting adds resistance to vulnerability, and it gives miners a financial incentive to continue operating during downturns.
In terms of data, 30% (330 million FIL) of the Filecoin allocated to storage mining is distributed through simple casting and 70% (770 million FIL) through benchmark casting.
However, it is important to note that the above absolute shares change over time. However, due to the dynamic nature of baseline casting, the share distributed through simple casting is always higher than the share distributed through baseline casting.
It is also worth noting that the number of distributions itself can change, as there is a reserve of 300 million FILs that the community will decide on through Filecoin Improvement Proposals (FIPs).
The conversion of the cumulative rewards of the two minting methods to Filecoin can be seen in the table below.
Figure 3: Block reward accumulation
What to Expect in the Near Future
One of the benefits of baseline minting is that the network becomes predictable once the network capacity exceeds the baseline target.
This is how we predicted the total minting rewards for the next six months. In all predictions, the network arithmetic is above the baseline target, with the result that there is no longer any uncertainty about the total amount of FIL that will be released and allocated during this period.
Figure 4: Accumulated block rewards expected during 2021
To get a panoramic view of the future, it is possible to visualize the daily distribution of the total rewards, or the number of total rewards can be seen as the number to be distributed by the existing network arithmetic.
The resulting data is shown in the figure below, which shows past and future daily block rewards. Most of the daily rewards decay due to the weakening of the simple casting mechanism, while the baseline casting mechanism still delivers stable rewards for miners.
Given that the network has crossed the baseline, getting more mining rewards per storage unit requires going through the trade order market, which would provide a greater financial incentive for people to supply capacity through trade order rewards and the Filecoin Plus program.
Figure 5: Record and forecast of daily block reward distribution during 2021
Filecoin, which crossed the network baseline, will transition to the next period. Block rewards available for capacity building are now being distributed at full speed!
This marks a shift in incentive goals, with incentives that will encourage more efficient storage provisioning while increasing rewards for participation in the trade order market.
Completing the transition and the associated shift in incentives is nothing less than a call to action to the community to create more applications and business models based on Filecoin. Through these activities, we can move into the next phase in a sustainable manner, where Filecoin’s reputation and products will reach a broader and more diverse market.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/filecoin-network-breaks-sustainable-baseline-targets-for-the-first-time/
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