Storage Governance Token

Token holders can vote on protocol parameters and network upgrades, such as storage pricing, reward distribution, and technical improvements. This ensures the network evolves according to the consensus of its users and providers, not a central authority.

• Example: Voting to adjust the block reward for storage providers.
• Example: Deciding on the integration of new data redundancy or encryption standards.

Tokens are often staked by storage providers as a crypto-economic security deposit. This stake can be slashed for poor performance or malicious behavior, aligning provider incentives with network reliability and data integrity.

• Purpose: Ensures providers have skin in the game.
• Mechanism: Stake acts as collateral that is forfeited if service-level agreements (SLAs) are not met.

The native token is typically used to pay for storage and retrieval services on the network. Holding or staking tokens may grant users discounted rates or prioritized access, creating intrinsic utility and demand for the token.

• Utility: Acts as the medium of exchange within the storage marketplace.
• Incentive: Large token holders (e.g., enterprises) may receive better pricing tiers.

Tokens are minted or allocated as block rewards and distributed to storage providers for contributing reliable storage space and bandwidth. The tokenomics model (inflation, emission schedule) is a core governance decision.

• Incentive: Rewards are proportional to provable storage contributed.
• Governance: The community votes on reward parameters and emission rates.

A portion of network fees or token supply is often held in a community treasury. Token holders vote on allocating these funds via grants to fund development, marketing, ecosystem projects, or public goods that benefit the network.

• Control: Decentralizes the funding of ecosystem growth.
• Process: Proposals are submitted, discussed, and voted on by the token-holding community.

Token holdings can function as a reputation or access token. For example, holding a minimum amount may be required to become a storage provider, access premium features, or participate in certain network functions, creating a barrier to entry for low-quality actors.

• Sybil Resistance: Prevents spam by requiring a financial commitment.
• Tiered Access: Enables permissioned layers within a permissionless network.

Storage governance tokens typically enable control through standardized processes:

• On-chain Voting: Token-weighted polls to enact protocol changes directly on the blockchain.
• Improvement Proposal Systems: Formal frameworks (e.g., FIPs, SIPs) for submitting, discussing, and ratifying changes.
• Treasury Management: Deciding on the allocation of community funds for grants, marketing, and development.
• Parameter Adjustment: Voting on economic variables like inflation, rewards, and fee structures.

Holding a storage governance token typically confers several rights within the network's decentralized autonomous organization (DAO) structure:

• Proposal Rights: The ability to submit formal improvement proposals for network upgrades.
• Voting Rights: Weighted voting power on all governance matters, proportional to stake.
• Treasury Control: Influence over the allocation of the protocol's community treasury and funds.
• Delegate Participation: The option to delegate voting power to experts or representatives.

Token holders vote on the economic model, including:

• Storage pricing (e.g., price per GiB/month).
• Provider rewards for storing data and serving retrievals.
• Client collateral requirements to ensure good behavior.
• Block reward schedules and inflation rates for token distribution.

These parameters balance supply-side incentives with affordable, sustainable storage costs for users.

Governance sets the technical and economic criteria for storage providers, including:

• Minimum stake or collateral to become a provider.
• Proof-of-Replication and Proof-of-Spacetime challenge frequency and difficulty.
• Slashing conditions and penalties for faulty or malicious behavior (e.g., going offline, failing proofs).
• Reputation system parameters that affect a provider's ability to win storage deals.

These parameters define the network's resilience and redundancy guarantees:

• Replication factor: Minimum number of copies for each data segment.
• Geographic distribution requirements for copies.
• Repair protocols: Rules for automatically recreating lost data copies.
• Data audit frequency to verify storage proofs.

Adjusting these directly impacts data security and storage costs.

Governance controls the protocol's evolution and treasury management:

• Upgrade mechanism for smart contracts and node software.
• Treasury allocation of protocol fees or token reserves for grants, bug bounties, and development.
• Grant approval process for funding ecosystem projects.
• Parameter change delay (timelock) to allow community review of proposals before they take effect.

While Arweave's AR token governance is more limited, it can influence parameters related to its endowment-based storage model:

• Storage endowment calculation, which determines the upfront cost for permanent storage.
• Protocol-controlled treasury for funding core development.
• Network difficulty for the proof-of-access mining mechanism.

Changes are proposed by the core team and ratified by token holder votes, focusing on the long-term sustainability of the permaweb.

A cryptographic proof system that verifies a storage provider is honestly storing client data for the agreed duration. It is the foundational consensus or work mechanism for many decentralized storage networks.

• Proof-of-Replication (PoRep): Proves a unique copy of the data is stored.
• Proof-of-Spacetime (PoSt): Proves the data continues to be stored over time.
• Role of Token: Providers must often stake or lock the network's governance token as collateral, which can be slashed for faulty proofs.

The guarantee that data necessary to validate or reconstruct a blockchain's state is published and accessible to network participants. While related to storage, it focuses on short-term data publishing for layer-2 scaling solutions and other blockchains.

• Contrast with Storage: Data availability is about immediate accessibility for verification, whereas decentralized storage is about long-term persistence.
• Key Projects: Celestia, EigenDA, and Ethereum's danksharding roadmap address data availability.

A token design where the right to perform work (like providing storage, validation, or computation) for the network and earn fees is permissioned by staking the native token. Storage governance tokens often follow this model.

• Mechanism: To become a storage provider, you must stake tokens. Your share of work and rewards is proportional to your stake.
• Purpose: Aligns incentives, as malicious actors risk their staked capital. It secures the network's service layer, not just its consensus.

A decentralized list where inclusion or ranking is determined by the staking and voting of a native token. This governance primitive can be applied within storage networks to curate trusted providers or datasets.

• Application: A TCR could allow token holders to vote on and curate a list of verified storage providers or vetted archival datasets.
• Governance Link: It demonstrates a specific utility for a storage governance token beyond basic protocol upgrades, applying it to quality curation and reputation systems.