Book - Securing Digital Rights for Communities | Chapter 5 - Fees
(Edited)
Game Theory and Governance of Scalable Blockchains for Use in Digital Network States
Chapter 5. Fees
- Spam limitation & resource credit systems
- Incentivising community-run nodes and infrastructure
- High fee layer, I bad
- Low fee layer I good
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STOPThe Value Plan, as it stands, seems to be a one-sided relationship with the HIVE platform, where the benefits are one-way. It's akin to a one-sided friendship, where one party continuously takes without giving back.
The issues of downvotes and the farming situation on HIVE are significant concerns that need to be addressed, those with more power, are creating an imbalance in the community. The genuine HIVE community, which values fairness and equality, do not support such practices most are afraid to speak up. However, the current structure appears to be enabling these bad activities, making it challenging to bring about change.
The misuse of power and the squandering of HIVE funds on trash are concerning. These actions not only undermine the integrity of HIVE but also dishearten the genuine community members who are committed to its growth and development.
If one is backing this 'trashy' plan, they are, directly or indirectly, contributing to the problems on HIVE. It's crucial to understand that every action has a consequence, and supporting such plans can lead to a further imbalance in the community will lead to a lower HIVE PRICE LESS USERS. Instead, it would be more beneficial to focus on promoting fairness, transparency, and real community-driven development.
Transcript ⏬
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Most chains get it wrong because they try to do too much on one layer.
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The more you do on one layer, the heavier the note, the more complex it becomes.
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So by separating the layers and keeping one text and one with smart contracts and heavy
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storage and everything else you need, you can then scale efficiently.
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So having layer one smart contracts means you have high fees.
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And when you have high fees, you cannot create decentralized layer twos.
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So in order to keep it fee-less, you have to
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be able to layer the technology out.
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So instead of doing everything like layer one smart contracts, being a data availability
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layer, being a transaction layer, all in the same thing, you layer it out, incentivize
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it.
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The most important thing that they get wrong is they don't have a transaction layer.
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They don't have a way to send value in a fee-less manner.
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That means they can't incentivize outside the chain, which cripples.
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It also means that people are not going to put data on the chain because it costs too
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much.
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So really, it just becomes a centralizing force for people with a lot of money.
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When you have fee-less access, that banks the unbanks.
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And that's what we're trying to do.
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We're trying to get access to people who can provide that.
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We're trying to provide value.
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So having everything on one layer is the wrong approach.
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We've seen it in practice.
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You either have something like Solana, where the nodes become too heavy and centralized,
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what we call fat nodes, meaning the community could never fork and sustainably run the ecosystem
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themselves.
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It'd be too heavy.
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Or you have high fees.
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And that cripples the network and makes, pretty much destroys the entire use case.
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We're trying to have...
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Because the entire use case is to preserve data, text-based data, and to be able to send
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value person to person.
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So if you're not able to do that because the fees are too high, then you limit most of
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the people who aren't.
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Okay.
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So, able to pay those fees.
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So you have to have a fast fee-less transaction layer.
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It also has to be free and or very cheap to input data on the chain.
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Those are the two cruxes.
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If you aren't able to actually use the chain, the whole point of a blockchain is to store
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data immutably.
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No one can tamper with it.
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Everyone can see it.
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So if you start to...
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Okay.
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If you cram everything else into that layer, it makes that use case irrelevant because
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no one wants to put data on the chain if it costs too much money.
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No one wants to put data on the chain, in theory, for censorship resistance, on the
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chain that the nodes are too heavy for the community to run.
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So when you have VC run nodes and or a very high fee chain, you get centralization.
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Okay.
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All right.
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Centralization.
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Just to add to that, related to fees, you want there to be a resource credit system
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on the base layer.
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And what that does is it forces you to stake a small amount of the token so that you can
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access the chain to interact with it.
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Okay.
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And the result is that you get fee-less transactions on the chain.
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The more you stake, the more you can transact, but all transactions are free.
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If you have nothing staked, then you can't transact.
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And that also, as a byproduct, combats spam because it makes it expensive to spam on the
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chain.
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So it reduces the spam.
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It also incentivizes apps to accumulate.
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Okay.
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So you can use the token to accumulate more of the base token to stake it so that they
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can provide their users free-fill experiences.
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So instead of the users having to go out and accumulate the token, the apps will accumulate
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the token or the databases or whatever use cases are built on top of the chain will go
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and accumulate the token so that they can always have access to the token.
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What that means is that those use cases and those apps are holders of last resort.
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Because they will not sell their base layer token at any price.
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Because if they sell their token, they power down or unstake and sell their token, then
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they can't provide their users with free-fill experiences and as a result, it means their
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users leave their apps and essentially their apps shut down.
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So even during a price crash, the last people to sell their tokens will be the apps and
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the use cases, utilities built on top of the blockchain.
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Okay.
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Okay.
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So that means that now you have an intrinsic value inside of the chain.
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You don't just have speculation value because there's actual apps locking up the token that
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won't sell at any price.
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Incentivizing community nodes and infrastructure.
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So as I touched on briefly in the previous chapter, this is important because you have
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to maintain the independence of the community and the independence of the node operators
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and the infrastructure operators.
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You do this by paying them from a neutral layer one.
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They can't discriminate against them.
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If you can vote them into place, that's even better because now they're using their reputation
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and advertising to the community, saying, hey, vote for me because I'm going to look
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after the community.
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I'm going to look after the infrastructure.
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I'm going to look after the community and run the nodes.
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If the community vote for them, then they have a responsibility to do that.
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And now they're getting paid from the neutral layer one, which means they don't need to
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register a business and they can remain anonymous, which means you now have the independence
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of the infrastructure operation.
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Do you want to say anything more about high-fee, sorry, about high-fee layer one and a low-fee
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layer one?
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I guess you touched on that while you were just talking, didn't you?
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All right.
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That's it for fees.
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Nice one.
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Chapter six, sustainable economy.