How will rewards be paid to avoid inflation but also stay affordable?

General
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I hope this does not fall into the “token speculation” forum rule since I want to know more about the system and not speculate on token prices.

To explain this further: in bitcoin-like techs the algorithm becomes harder over time, otherwise each time new hardware came out, more coins would be produced, which would cause inflation and coin devaluation.

I am interested in understanding how this would be handled here. From the page The DFINITY Foundation I got this:

”…the NNS governance system will periodically adjust the number of tokens that the protocol forwards to data centers as payment so that their remuneration remains predictable…”

Could someone tell me more about this?

  • How will it make sure data centers get paid fairly?
  • How will it make sure users don’t get overcharged?

Any info on this would be greatly appreciated.

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One approach would probably be a stable coin like PHI or simply get the market value of the token and reward miners the same amount of FIAT as tokens every time.

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3

I meant more as in:
If today’s CPU has 1ghz = 10 euros / month
Tomorrow’s CPU HAS 10ghz = 100 euros / month

Because of that, we can’t always pay the same, things depreciate.

So in the link I added, it says there will be a group regulating this price.

For new people considering using this platform, it is interesting to know how this group would work because:

  • miners don’t want to get paid below market price
  • and users don’t want to pay above market hosting

So how is this group chosen, how do they act, what are prices based upon, those are some things I would like to know more about.

Hope it’s ok to be asking these things, I’m really curious I find this project very interesting.

4

Hi Erik,

Of course, it’s a good topic. We don’t have final details yet, the research team is on it, but just thinking about a couple of options: It could be directly voted on by the governance system participants, or it could be automated based on external costs (eg tokens and hardware) which could be determined via oracles, so essentially an indirect vote but one more likely to be less of a judgement call, since the external costs are a “known” value.

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5

That’s super interesting. I’d love to help out with some ideas. Maybe post these questions in the forum somewhere and let people give their opinion etc so we start to crowdsource ideas for this project?

I like this idea best, because it sounds fair. But it could get complicated if, for example, if the price is to high and people stop using it, then only miners are left and if they continue voting the prices up, the system could fail.

This would work better to avoid the scenario above. But I still feel like people would trust the system better if it was not controlled by any smaller group.

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Have you thought about using something like Moore’s Law to controlo token rewards?

You could embed a mathematical function into the system that reduces the amount of tokens rewarded over time.

The idea would be to make the system automatically reward tokens per processing done and, over time, automatically reduce the amount of tokens paid.

We would just have to create a formula for processing, another one for storage etc, by analyzing the trend of the last 50 years and applying that projection to the next 25.

And whenever the system gets out of bounds with reality, the community can update the code to update the formula.

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7

great thoughts Ori! Interested in seeing what’s released in September when network nervous system is made public

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