Reduce onboarding gas & align value accrual by removing batch balancer and replacing it with a per-sector fee #1105
Replies: 35 comments 91 replies
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Thanks @irenegia agree on this Just on 2 - dynamic pricing. I'm not sure on the merits of this approach. I don't think we should be disincentivising onboarding via a higher fee unless there are constraints (like with gas fees). If Filecoin found rapid traction what would be the benefit of increasing the fee at the expense of possibly slowing that down? Adjusting down in periods of declining growth I could understand but this also happens naturally with more of the simple rewards being distributed amongst the lower QAP. |
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Moving the question from @beck-8 in the FIP draft here for discussion: #1113 (comment)
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Flagging here that there is a live FIP Draft for review of this proposed change! Please review FIP-0100 at #1113 and add questions and comments for further discussion here! |
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Here is the Post Event Summary from the Monday Feb 10 Filecoin AMA: https://docs.google.com/document/d/1f4QPS4Hjx_he9OKxzZpVZGHcA3pGz_J6DWTIknw4rmM/edit ❓ FAQs from the ConversationEconomic and Network Impact
Protocol and Storage Provider (SP) Impact
Technical and Network Functionality
Gas Fee and Base Fee Considerations
Implementation and Timeline
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I have several questions around where/how the fee is paid. First up:
The answer is (2) as far as I know, but I wanted to be explicit here. Second, are fees charged for all partitions, even if a partition isn't proven (for example, an SP skips a proof)? This matters because, if an SP skips a proof, there won't be a Third, assuming we're deducting from the miner actor, how are we accounting for these fees?
Option (2) would, IMO, simplify SP operations but I'm not sure if that has the right incentive structure. I also really don't want SPs to fail windowed post because they haven't topped up funds for fees. Furthermore, if we're charging fees in cron (e.g., because the SP skipped a proof), we'd have to go with option (2) at that time because we can't fail to charge the fee in cron. |
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Could you please elaborate further on the 30% reduction in gas units? To calculate the current onboarding cost, one sector from SP f02865213 was randomly selected as a sample. The messages for PC2 and C2 are as follows: From the messages, we can observe: |
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Fee Predictability Concerns around fee predictability before sealing a sector were brought up in an out of band discussion. Specifically, the concern is:
Our proposed solution is to:
Implementation wise, I'd prefer to record the fee directly in terms of per-byte power instead of just recording the circulating supply. This makes the fee trivial to understand. It also makes it easier for future FIPs to potentially change how this fee is calculated (if we find problems with the current method, find better methods, etc.). |
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Burn on termination We've discussed burning up-front and burning over time, but we haven't yet discussed burning on termination and only on termination. The idea is:
The upsides to this approach are:
The downsides are:
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Paying in WindowedPoSt versus at deadline end Some of the implementers prototyping this FIP discussed when to pay the fee: when the WindowedPoSt message is submitted or in cron at the end of every deadline. Based on #1105 (comment), it seems like we need to do something in cron: we need to pay for unproven partitions. Our realization was that, if we have to do that anyways, we might as well:
The only downside here is that we'll need to record the aggregate power in the deadline (which we don't currently do) in order to apply the %BR limit to the fee, but that's not a huge deal. Also, if we do this in cron, we won't need to call out to the power/reward actor because cron feeds all the necessary information into the miner actor directly. The only added cost here is that non-faulting miner actor will perform a slightly more expensive cron operation as it will need to send some funds to the burnt funds actor, but we don't expect that'll be a significant burden (we don't need to invoke the burnt funds actor, just move some funds around). The impact on the end user is:
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Moving question on the FIP predictions from @herrehesse here:
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One conversation that's been ongoing while evaluating implementation options + tradeoffs is when to charge and account for the new per-sector fee: 1) upfront 2) daily over time or 3) at termination. This FIP proposes option 2) daily over time for a few reasons:
The design of the fee was specifically constructed around daily accounting to minimize overhead and allow for increased network value accrual without bottlenecks on SP operations. Our focus is finding a viable implementation pathway to achieve this design. |
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🧵 Thread for API/interaction questions/requirements
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Miscellaneous clarifications for the FIPBelow are items I've heard raised or discussed, but I didn't see in the FIP the last time I looked (and the PR for marking it as "Draft" is merged so I'm avoiding commenting there.). I'm putting them down as potential amendments to make:
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I think that folks have been modeling this into their evaluation already - but wanted to clarify that the per-sector fee specified in the FIP (https://github.com/filecoin-project/FIPs/blob/master/FIPS/fip-0100.md#per-sector-fee-added) is defined for a 32 GiB QAP sector (and adjusts proportionally to power). This is consistent with how all the included graphs, simulations, and comparisons vs a BR or IP-based fee design were calculated. 👍 |
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Update for this week:
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It is beneficial to newly joined SPs. It is harmful to old SPs. |
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Separate to the fee mechanism, this is a thread for a proposed change in #1133 for adjusting the calibration network circulating supply so that it closely matches mainnet. The summary of the proposed change is:
So it's a choice between accuracy and having a test network that's more similar to the network that it's trying to emulate for testing purposes. |
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A governance note: After the conversation with APAC SPs yesterday, a discussion with the folks planning nv25, and a (lightly attended) meeting of core devs today, there was agreement across all these groups to delay the end of Last Call for this FIP until Tuesday March 11, rather than have Last Call end on Friday March 7 as was originally scheduled. This gives an opportunity for further discussion and to consider changes to the FIP. To that end, I'm picking out a couple of recurring themes in the discussion here. These are the key contentious points, to my mind:
I think it may be useful to explore these two topics further. A couple of other areas that I think have been resolved or I believe we won't be able to reach a new consensus on:
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It is inappropriate to attribute the low onboarding rate to the gas problem. If FIL+ cannot increase QAP, |
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Hello everyone, I am a new SP who joined in the past two years.
suggestion:
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I want to make sure that all the points being made are included in this discussion, including ones made by ecosystem members who have been a little burned-out on long Github threads (I think we all know that feeling). So, while I was talking to a (non-APAC) SP, he highlighted this text from FIP13:
He argued that FIP100 might change the balance between SPs with different strategies. Onboarding SPs would pay less, but those extending sectors would end up paying more. "this can and will only be beneficial for miners that grow significantly compared to the sector base they already have onboarded." I don't know enough to agree or disagree, but I wanted to put the point into the conversation to see if it can be addressed. |
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Hi All I wanted to write something briefly to argue for supporting this FIP (even as an SP). I note some of the concerns raised and will try address some of these. This proposal is a net positive for the ecosystem. Removing the batch balancer simplifies the protocol and moving the protocol towards charging for services it is actually providing (in this case an audit service for the SP's) is more sustainable. One of the major issues I see currently in the Filecoin economics is that there is little reason for people to hold the token. Today, burning FIL (deflationary forces) only occurs through 1) gas execution and 2) penalties when miners fault. Both of which we should be trying to minimize as much as possible. The issue is that if we successfully lower gas execution and reduce miners faulting, how is value accrued to FIL long term? it doesn't. We have to start thinking about how Filecoin's economics are tied to it's value proposition. One clear value proposition is the audit service that Filecoin provides for SP's. SP's should be willing to pay for this. Arguing that it is too high relative to current onboarding rates imo is not the right way to be framing this. The question is whether the value provided by the blockchain for the audit service of the sectors is reasonable - I'd argue it is. This proposal will have second order effects. i.e. having more deflationary forces should make the token more appealing to investors. Having more burn accrues value to the token and given that all SP's still earn majority of their income in FIL should be a MAJOR consideration. Just comparing net rewards or looking at the fee as just a 'tax' is the wrong framing. We need to create a sustainable economic framework and this fee I'd argue is the start of that. It's not to say it should be the only fee, we should be charging more fee's where it makes sense. It makes sense here. I am empathetic that this type of fee may cause lending agreements to be changed going forward but this shouldn't be a reason to stop the proposal. We need to think longer term about what economic model we are building and not just opposing a FIP because it doesn't fit into a 3-6 month lending contract SP's have in place. Similarly, with regard to fee's on extended sectors, we shouldn't fall into a trap of not updating economics because 'this wasn't proposed when I signed up' type thinking. Longer term, having a per sector fee makes a lot of sense and is equitable against all SP's. I'm very open to transition periods etc. but we should very much stop short of having effectively two tiers of storage on the network (i.e. pre and post fee). Further, as a network we shouldn't be afraid of SP's leaving the network if the economics don't work for them. I'm not suggesting this is a good thing but if our metric for not upgrading the economics of Filecoin is that we don't want any SP's to leave because of a proposal we will not make any progress in upgrading the network. I don't think it's controversial to say that our supply side is still much larger than the demand side. In short, Filecoin will benefit much more from having sustainable economics longer term then a small increase in per sector fee. SP's specifically will benefit much more given that the large majority of their income is tied to FIL therefore having better economics should be in SP's best interest. TLDR: |
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Results: As a new SP, we oppose this proposal!
Thanks. |
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The standard approach of PL: solve a small problem and introduce a big problem. The same is true for FIL+. Achieving 10 times the computing power, introducing a notary, a big problem. What about QAP and data quality? A lot of time and resources are wasted, and there is no progress in paid storage. |
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So we're coming to the end of the Last Call process, and I'd like to summarize some of the objections here. I've reached out to the FIP authors and made some broad suggestions as to amendments based on this discussion, as well as direct conversations with concerned parties, and my own sense of what might be feasible within the terms of the proposed FIP itself. The next step, because this is a spicey FIP, is for a meeting of coredevs in the next week, where we will see if we can get consensus to move forward, or reject this FIP. The arguments for the FIP are that it helps alleviate the high onboarding gas costs right now, replacing them with a more consistent fee across the lifetime of the sector. Objectors to the FIP point to the unexpectedly high cost of this fee especially when considering QAP sectors, lowering ROI in an already uncertain economic environment for Filecoin SPs, and what they feel is the unfairness of a perceived shift in cost, especially for older SPs who already paid the high onboarding costs in the past. There are also concerns that this FIP may have damaging effects on the ecosystem as a whole. It may accelerate SPs leaving the system because of the change in ROI. It may change the balance of incentives between different SP strategies. Any change to cryptoeconomics is potentially disruptive, and predicting the consequences is an inexact art. The ecosystem relies on the calculations of Filecoin's cryptoeconomists and protocol designers at FIlOz and CEL, and it can be hard to parse or challenge those from the outside, which lowers trust in those predictions and process. As a result of the above, I ask the FIP authors to consider the following modifications to the existing proposal:
I am also going to submit my own proposed change, which is more governance-related. I propose that coredevs commit to reviewing the impact of this FIP in the short-term, in time for subsequent releases nv26 and nv27 -- to see if the predictions of its critics and its proponents come true, and on the basis of those conditions, how to adjust, adapt or even if necessary roll-back the FIP's approach. To assist them, I propose a small ad-hoc committee made up of both critics and supporters of the FIP, who will monitor ecosystem conditions, and supply them with recommendations. I have proposed to FF that it provide a small budget for independent research guided by the committee's members so that they can be informed of the facts on the ground, independent of those included by the FIP authors. The research could be conducted by the Cryptoeconomic Lab, independent protocol developers, or companies like Blockscience. This committee will not be expected to reach consensus, and its members can submit independent reports to coredevs. I'll leave it to the FIP authors to give details of any changes they plan to make; once that's done, we'll close this FIP and pass it onto coredevs for consideration, hopefully in the next few days. |
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Over the past week, we have welcomed a number of new participants to the FIP discussion, and their involvement is greatly appreciated. This participation helps us better understand and address the concerns and requests from various network stakeholders, which form the basis of this FIP. The proposal aims to unblock sector onboarding from gas limits, such as the batch balancer, while maintaining and enhancing direct protocol value accrual via per-sector fees. All FIP participants generally support removing the batch balancer, unblocking network onboarding rates, and simplifying the predictability, implementation, and optimization of gas fees. However, we have observed some divergence within the SP community, with opinions ranging from full support of the FIP to concerns about potential impacts. Thank you Danny for summarizing some of the concerns and proposing a path forward to some compromises. 🙏 The current proposed per-sector fee model already includes a number of compromises to find an efficiently implementable, modelable, and palatable solution across the goals stated in the FIP discussion and design. Based on the concrete feedback shared here, we plan to implement a number of additional compromises into this FIP to respond to the concerns raised by SPs from a few different backgrounds. The actionable feedback we heard includes:
Based on this feedback, we’re making a set of changes to the proposed FIP to recognize and respond to these concerns:
As FIP authors, we believe that by adopting these mitigations to the concerns highlighted, it is reasonable to exit the current last call process and assess the impacts of this compromise FIP in real network conditions through inclusion in nv25 to gather data for explicit monitoring, evaluation, and potential amendment. Our aim is that by closely monitoring the real-world observable effects on SP onboarding, ROI, sector extension rates, QAP growth, new investment, new SPs, protocol revenue, and similar economic signals - we’ll be able to more effectively iterate on an appropriate per-sector structure that helps drive Filecoin to success. We will share this plan with Core Devs for alignment this week to proceed on the nv25 launch schedule. 🚀 Thank you to everyone who participated in this FIP discussion - and for all the actionable and helpful feedback to incorporate into this valuable experiment. We plan to closely monitor and report-back findings as we go here - and welcome your input into important metrics and data-points to monitor closely! |
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We fully support the outlined plans and the shift toward a more rational and predictable fee structure for Filecoin’s onboarding process. As a large storage provider, we have seen firsthand the inefficiencies of the current system, making sector onboarding fees unnecessarily complex and unpredictable. We strongly agree with introducing a per-sector fee to replace the batch balancer. This approach provides clarity, stability, and sustainability—allowing storage providers to plan for long-term investments without being at the mercy of base fee volatility. More importantly, we believe adding costs to extensions is absolutely the right move. Storage should be treated as a real economic service, not something indefinitely subsidized by block rewards. The days of relying solely on rewards to cover operational costs are over, and we must collectively shift our focus to securing paid deals as the foundation of a sustainable Filecoin economy. This is the right direction for the future of Filecoin. We encourage rapid implementation and alignment across the ecosystem to ensure a viable, long-term storage economy—one that prioritizes real customer demand. Discussions with lending entities are essential, as these costs should be shared between both the Storage Provider and the Lender. |
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FIP-0100: Core Devs Endorse Proposed Changes, Final Steps UnderwayAfter an extended Last Call period, Core Devs have reviewed FIP-0100 and reached consensus to move forward with the proposal, endorsing key changes based on community feedback. The FIP authors are now finalizing modifications to the spec to address concerns raised, particularly around fee adjustments and transition impacts for existing SPs. The recording of the Core Devs call will be made public on Youtube shortly. Once these updates are incorporated and merged, FIP-0100 will be ready for acceptance. In parallel, Filecoin Foundation will support the formation of an ad-hoc monitoring committee to evaluate the real-world impact of this FIP post-deployment, ensuring ongoing assessment as the network evolves. If you have questions or concerns, feel free to get in touch. |
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Context and Motivation
In the ongoing effort to reduce per-sector onboarding gas costs (see #1092), we have identified the following active work streams:
Supporting the DDO Pipeline: For example, adding DDO deal tracking capabilities to Spark.
Storage Gas Optimizations and Miner Configuration Improvements: Tracking this work here;
Enabling Full Adoption of Batching and Aggregation to Scale Onboarding Growth: This involves ensuring that batching for precommit and batching/aggregation for provecommit are always rational (ie, cost-effective for SPs).
This new discussion focuses specifically on the third point—making batching and aggregation pipelines cost-effective while aligning network value accrual with onboarding growth. Currently, the cost-effectiveness of these pipelines is governed by the BatchBalancer mechanism, which is tied to the base fee. In the sections below, we provide an overview of the current system, highlight its limitations, and propose a practical solution to address these challenges and enable fast progress. This proposal builds on previous work done by CryptoNet (see here and #587).
Filecoin's current fee structure consists of two main components:
Gas Fees: As in other blockchains, gas fees mediate access to limited blockchain execution capacity. These fees are burned, generating network revenue proportional to the execution resources used.
Batch Balancer Mechanism: Beyond blockchain execution, the Filecoin network provides a storage-auditing service to SPs through the proofs of storage verified on-chain. Historically, before proof aggregation, each proof verified a single unit of storage (sector), meaning gas fees captured the value of the storage auditing service. However, the introduction of proof aggregation (where one proof audits multiple sectors) disrupted this alignment. The batch balancer was introduced to address this misalignment but has become outdated, and, as recent work on gas onboarding optimization (Onboarding rate and gas optimizations #1092) highlights, it now acts as a bottleneck to fully adopting aggregation and batching.
Problem Statement: Gas fees – a system primarily intended to charge for execution resources – alone do not properly capture network value for Filecoin, negatively impacting the overall Filecoin economy. Filecoin value accrual via fees should grow proportionally to network adoption and demand, and be resilient to technical optimizations that reduce gas fees and increase chain bandwidth. While the batch balancer mechanism tried to solve this, at the same time it creates these inefficiencies:
It discourages full adoption of batching and aggregation by making these operations less rational (cost-effective). Batching and aggregation improves the overall efficiency of Filecoin, and increases the onboarding capacity of the network.
It couples gas fees with storage auditing in a way that limits predictability and increases exposure to base fee volatility. Gas fee pricing is designed to prevent the network from overusing execution resources; it should not be so directly tied to onboarding levels.
It poses challenges for aligning technological improvements (such as optimizations that reduce gas congestion) with economic incentives (value accrual alignment with network growth).
Proposal and Effects
To address these issues, we propose removing the batch balancer mechanism and replacing its value accrual effect with a per-sector fee, separate from gas fees. This change has multiple benefits:
Fee Design Principles
The fee should accord with the following design goals:
Proposal Directions
We are exploring two high-level fee models:
We are evaluating variations of these models that tie fees to broader economic indicators, such as circulating and total token supply. Proposals are being evaluated based on how well they achieve the Fee Design Principles above.
Conclusion
This proposal introduces a more predictable and rational fee structure that replaces the batch balancer with a per-sector fee, providing Storage Providers with a cost structure that is more stable and easier to plan around. By decoupling gas fees from service fees, this should better capture network value, encourage technological innovation and optimization, and ensure the long-term economic sustainability of the Filecoin network.
Please give your initial thoughts and questions; this is a work in progress, and your feedback will help ensure this approach benefits all parts of the Filecoin ecosystem.
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