Dear community
We would like to respond to the discussion in this forum topic that has resulted from a recent code commit by DFINITY regarding pricing of the upcoming high-replication-factor application subnets.
First of all, let us revisit how the 5-USD-per-GB-per-year price was determined originally: This was done pre-genesis, based on an assessment of hardware costs and protocol capabilities some years in the future and assuming lower-replication factor subnets than 13-node subnets. Originally, we launched with a replication factor of 7, which was then increased to 13 for application subnets, without changing the pricing. Now, more than a year after launch and successful operation of the Internet Computer, we have a much better handle on the cost model and requirements, thus it is an appropriate time to revisit pricing.
As we are planning to introduce higher-replication subnets than our current 13-node subnets in the near future, we were forced to think about pricing of the different resources on this new type of subnet and had started a discussion on pricing internally to DFINITY. Unfortunately, parts of this discussion, specifically an extreme-case, were unintentionally exposed through a code commit related to resource pricing of high replication subnets.
It is self-evident that proceeding like this was a mistake from our side. The community has a major stake in the conversation around pricing. We apologize for this and have learnt a lesson for the future.
We suggest opening up the conversation on resource pricing to the community. To help with this, DFINITY will, as a next step, provide the relevant detailed information and an initial proposal to help frame the discussion. Based on this, you, the community, will be able to contribute and help shape the future of resource pricing for the IC.
—
To help reassure the community in the meantime, here’s a back of the envelope example of how memory pricing can remain in the $5 range going forward. Let’s look at two scenarios, based on today’s hardware costs and some assumptions as shown in the table below. Note that the Internet Computer Protocol requires enterprise-grade SSDs for their write endurance and sustained write speed, the cheapest consumer SSDs will not work (for long).
| Scenario 1 | Scenario 2 | |
|---|---|---|
| Enterprise SSD HW cost per GB | 0.2 | 0.4 |
| Storage utilization (IC wide average) | 0.8 | 0.5 |
| Depreciation (years) | 5 | 4 |
| Node provider incentive | 1.8 | 2 |
| Local protocol overhead (storing multiple checkpoints and state diffs) | 3.5 (requires protocol optimizations) | 5 |
Table 1: Assumptions for the considered scenarios
Scenario 1:
(0.2 USD/GB) / (0.8 utilization) / (5 years depreciation) * (1.8x node provider incentive) * (3.5x per-node overhead) = 0.315 USD / GB / year per node
Scenario 2 (more conservative):
(0.4 USD/GB) / (0.5 utilization) / (4 years depreciation) * (2x node provider incentive) * (5x per-node overhead) = 2 USD / GB / year per node
Taking the above scenarios gives us a spectrum of storage hardware cost incurred per GB per year per node ranging from 0.315 to 2 USD. Looking at the assumptions, one can get a feeling for viable storage pricing in subnets with a given replication factor. Even the less conservative estimate does not yet consider expected storage price decreases due to advances in semiconductor processes. Thus, by projecting expected costs to a 5-year horizon, we may be able to obtain better figures than the ones above. Note, however, that cost items such as the remaining hardware of node machines and operational expenses have not been considered at all here, but also that those will be amortized in parts through charging for other resources, such as Wasm execution. The above is really to be seen as a rough indicative assessment of the cost.
We hope to clarify things with this post and are looking forward to a discussion with you on this topic.