The primary goal of this proposal is the removal of the Batch Balancer mechanism from sector onboarding to facilitate an increase in effective Filecoin network bandwidth, while preserving network burn.
The secondary goal is to reduce the reliance of Filecoin’s network burn on the price of gas used by Storage Providers.
A significant percentage of block capacity is not utilized due to the batch balancer mechanism, which penalises proof aggregation.
This leads to artificially increased cost of gas through the BaseFee mechanism but guarantees a certain level of burn associated with onboarding. The reliance of this burn rate on gas price influences the design and execution of the protocol, where significant gas optimizations and reductions are seen as inherently risky due to the possibility of upsetting the balance of the new token supply and network burn. The batch balancer also increases the sensitivity of onboarding costs to chain congestion above that already inherent in the gas price.
This proposal aims to reduce the dependency on BaseFee by decoupling the on-chain costs of onboarding from the gas price, specifying an explicit pricing policy instead. Onboarding is not a scarce resource like chain throughput, and the EIP-1559 mechanism is not an appropriate pricing mechanism. This decoupling allows for the removal of the batch balancer and supports continued optimization of the network’s execution layer, with better-aligned incentives for token holders, Storage Providers and data users.
The Filecoin network’s primary objective is to provide reliable, verifiable data storage. This feature differentiates Filecoin from other crypto networks, and it is the source of its utility. This proposal reigns in fees that Filecoin charges, such that they are directly proportional to the utility Filecoin provides to Storage Providers and clients.
We propose the introduction of two fees: Capacity Fee and Data Fee. We aim for these fees to maintain the total on-chain cost of onboarding storage at current levels, while the removal of the batch balancer should relieve the pressure of the BaseFee and allow for continued protocol improvements and gas optimizations, which will provide additional benefits in enabling Storage Providers to onboard more data with lesser overall cost.
The batch balancer was introduced to equalize the playing field for small and large storage providers in the presence of proof aggregation, which can provide very significant reductions in costs. It also plays a stabilising role in the Base Fee system but has an outsized influence towards increasing the Base Fee.
The batch balancer has the following characteristics, some of which were part of its design goals, and others are externalities of how it functions.
Out of these characteristics, we choose to focus on preserving linear cost and network burn.
The Capacity Fee is charged per byte of capacity onboarded and involves a proportional burn, but without reference to the gas base fee.