Burning the Mining Reserve (FIP-0093)

[jnthnvctr]

TLDR

• Filecoin is a thriving ecosystem with an exciting growth trajectory ahead. However, FIL’s current tokenomics, in particular its high FDV relative to MC, are perceived to be challenging for new investors to enter into the ecosystem.

• With the aim of making Filecoin more aligned with how the market assesses the attractiveness of crypto networks, we propose that the 300M of FIL mining reserve be burned (15% of the 2B maximum supply). From the token holders’ perspective, the burn would optically reduce the dilution overhang, enhancing the perceived stability of Filecoin’s token economy.

Motivation

Fully Diluted Value (FDV) is a common metric the market looks at to evaluate networks and see how much upcoming dilution token holders might incur - FDV is measured by extrapolating the market cap of the network if the full theoretical supply of tokens were to be released.

Market Cap (MC) is a metric that measures the total value of a crypto asset based on its current price and current circulating supply (rather than its maximum, future total supply). Large gaps between FDV and MC can be a red flag because it signals to investors that their token holdings will be diluted with inflation as the current circulating supply expands into its maximum, future total supply. As a result, a low MC to FDV ratio - while it does not give any information about the rate of future token inflation - likely dissuades investors from considering an investment in the underlying crypto asset in the first place. We note that there has been a positive correlation between the MC/FDV ratio and token price returns over different time periods - which potentially provides empirical backing to our hypothesis of investor bias against low MC/FDV tokens.

As it currently stands, most people use Filecoin’s 2 billion total supply number to calculate Filecoin's FDV. This number includes tokens that are not guaranteed to enter the total supply - including the mining reserve and the full 770m baseline minting rewards (which would require reaching 1YiB of RBP to release).

Source: Token Unlocks

The result is that Filecoin has the 10th lowest MC/FDV ratio in the top 100 tokens by market cap, with a large perceived overhang of future dilution. The average and median MC/FDV for the top 100 cohort are much higher at 76% and 89%, respectively. Although MC/FDV is a time-agnostic metric that does not account for the rate of token inflation, feedback from the investment community indicates that a high FDV relative to the MC is indeed offputting.

Source: Artemis.xyz

Proposal: Burn the Mining Reserve (300M/2B FIL tokens)

The goal of the Mining Reserve was to hold back additional tokens to be used to incentivize future types of mining. Now that we’re several years into the network (and crypto as an industry has evolved), it seems clear that there are new mechanics/solutions we can lean into to incentivize new types of actions, rather than relying on creating new sources of dilution.

3 main observations:

(a) Evolving network structure: Initially, the token design assumed there would be newer forms of mining that need to use FIL as part of the incentive mechanics. Today, it seems the direction the ecosystem is going towards is with IPC and subnets vs having an enshrined set of new mining.

(b) Evolving network alignment strategy: The original token design determined that new forms of mining should have a separate token pool and inflation schedule from the “core” inflation schedule from baseline+simple minting. Today, it seems like the models we should pursue might look closer to Eigenlayer/staking FIL for securing IPC subnets (and even new tokens here) vs creating new sources of FIL emissions.

(c) Addressing the high FDV overhang: The token design assumed the community would be willing to accept 300 million FIL in additional inflation (as would be required to pass a FIP) and that the meme of 2 billion FIL would be stronger than the meme of 1.7 billion FIL. However, given it takes a FIP to introduce the mining reserve into circulation (which would be the exact same process as creating a FIP to increase the supply to over 2 billion), it seems like we’re unnecessarily hampering the ecosystem by allowing these tokens to be counted in the FDV. If the community wants to FIP in more inflation in the future, they are welcome to propose such a change - but it’s unclear why we should allow the overhang of potential inflation to create a weight on the ecosystem today.

Note: Various teams are putting a lot of work into driving the adoption of paid deals and reducing friction for FEVM builders - and this is not a substitute for that. However, if we don't address the FDV issue - the hurdle for Filecoin to get credit for any progress on the fundamentals will be substantially higher.

[jsoares]

1. I understand the argument but am unconvinced this will make any difference in practice.
2. That said, I also don't see a clear path towards any reasonable use of the mining reserve, so I'd rather it didn't exist.
3. This seems irrelevant if https://github.com/filecoin-project/community/discussions/709 comes to pass, given the max supply would be ∞ anyway, the mining reserve is not counted as circulating, and the underlying hypothesis is that no one looks deeper.

[jnthnvctr]

My argument is we need to minimize the amt of potential dilutive sources - I think its easy to dismiss it and say this is something the market is generally aware of, but you'd be surprised the number of folks I've talked to that simply just look at the FDV. If on balance you think its a neutral move, I'd advocate for lets just burn it.

Fwiw I don't think simply burning the mining reserve is enough (over and above trying to improve the tokenomics - the most impactful things will be dramatically ramping paid onboarding that settles on chain) - but leaving additional supply is just adding confusion / risk, which imho is a tax we don't need to be paying.

Wrt your (3), I think if we just get one or the other proposal through it gets us part of the way there (better if we get both) - but I think they are independent of each other (though both improve the picture for Filecoin in different ways).

Generally speaking, I think the ecosystem would benefit if we had less stuff that was "non standard" and more like the rest of crypto (at least reducing the amt of folks write it off as being "too complicated").

[jsoares]

I still think the argument is weak when coupled with filecoin-project/community#709 since it will become largely invisible in most places that are not tokenunlocks (ie cmc, coingecko, ...). I nonetheless agree that, on the balance, we should burn it.

[Porterstowell]

Agree with JV here, there is no "Silver Bullet" solution that will address all an investors major concerns. I believe as well that it will take multiple steps where paid deals that settle on-chain is the most influential and logical area of improvement.

For anyone considering this FIP, I encourage you to think of your entire population of levers to potentially pull that you believe would generate a positive outcome. Then, perhaps start your own FIP conversation on your highest priority lever.

Wouldn't it be great if we could all stack rank a series of FIPs and truly become re-aligned as a community?

I believe it is possible and I applaud this FIP discussion for getting us engaged and starting the conversation.

[oliver776]

Now that Protocol Labs and the Foundation are releasing more tokens every day than miners are producing, doesn't anyone think they should be burning Foundation and Protocol Labs in equal proportions? ?Burning is definitely a good idea.

[jnthnvctr]

Fwiw: I don't think PL / FF are selling (I actually had reached out to a few folks at each org about if they'd be open to a FIP changing their vesting terms - either by extending it out another 4 years, or by accelerating vesting + burning a portion of their remaining tokens + committing to lock on the network) as a way of addressing their vesting overhang. I didn't get concrete answers, but I think the general concern was around lack of liquidity / what that might imply for the ability for those orgs to fund public goods (there's a lot of stuff that falls into this bucket).

Anyhow, I think you should raise that as a separate FIP discussion (happy to share more thoughts on that there) - I don't think that should be tied to this decision since it was not committed that these tokens (the mining reserve) would ever come into circulation.

[movehealth]

The excessive daily token release is indeed the main reason why funds are not participating in Filecoin. Currently, over 300,000 FIL are released daily, with Protocol Labs and the foundation receiving nearly 170,000 tokens . In contrast, miners only produce 100,000 tokens. Implementing a reasonable token burn would be highly beneficial for the development of Filecoin. No one will invest in a project that remains in long-term stagnation.

[OpenGate01]

For the price of a token on any blockchain to increase, it requires the concerted efforts of the foundation, project developers, ecosystem development, and the community. Filecoin has already attracted over 500,000 real users—a figure that many blockchains envy. Most of these users are involved in Filecoin due to mining, and they predominantly come from the Web2 space with a certain level of financial capability, although they are currently dormant.

A good burn mechanism would be beneficial for the Filecoin price. Only when the price increases will these users re-engage and participate in the Filecoin ecosystem. A prosperous ecosystem, in turn, will further drive up the Filecoin price, creating a positive flywheel effect.

[momack2]

I agree that good burn mechanisms are important for project growth! However this proposal is not a good burn mechanism - it is a one-off short-term hack. A better burn mechanism that would be good for Filecoin now and longer-term would be implementing storage fees that create burn for the network with every new GiB of data stored on Filecoin. I know of proposals from @nicola @anorth and @mjroddy that are pushing in this direction that I strongly support!

[f8-ptrk]

we should half all balances on the way - or at least deduct 15%.

[likhita-8091]

In fact, it should indeed be destroyed. The fil ecosystem is already in jeopardy,

1. The number of storage providers is also greatly decreasing, with a decrease of over 1000 compared to this time last year.
2. The STFIL incident occurred, with nearly 5 million coins taken by others and no official action taken. Even if you do not use technical hard forking, at least call on major exchanges to freeze the withdrawal address of this FIL, so that it cannot be sold on centralized exchanges.
3. The total amount of FIL is too much, with many currencies such as Boca and Near, which are actually over one billion. However, their projects have also found that they are not effective and must improve inflation. And Fil should also think about it. With so many coins being released and diluted every day, can prices rise?
4. FVM used to look forward to it, but now it seems like a bunch of dog poop, with low performance and more junk than any public chain on the market. So what else is there for FVM to exist? The transaction volume is less than 2000 in a day, compared to the near blockchain, which has a daily transaction volume of 8 million. How to compare?
5. How advanced is your technology in the IPC subnet, which has been delayed and then delayed? If it were a cow, how would FVM develop like this? Dogs don't even pay attention. IPC is also garbage, even if you develop it, it won't be of much use
6. Do you claim to be doing something and doing useless work? Do some meaningless things, the founder has long stopped managing FIL.
   In summary, don't think about solving the problem from a technical and ecological perspective. Simply destroy the tokens quickly, accurately, and ruthlessly. That is the only way to increase the coin price

[Porterstowell]

Slight Challenge on your first point. It's the number of Storage Provider SYSTEMS that has decreased, not the number of Storage Providers. While true, many SPs have exited the ecosystem, we also have to account for a number of Lotus improvements that enabled SPs to not have to run so many MinerIDs.

Thank you for providing thoughts to the conversation!

[likhita-8091]

In fact, it should indeed be destroyed. The fil ecosystem is already in jeopardy,

1. The number of storage providers is also greatly decreasing, with a decrease of over 1000 compared to this time last year.
2. The STFIL incident occurred, with nearly 5 million coins taken by others and no official action taken. Even if you do not use technical hard forking, at least call on major exchanges to freeze the withdrawal address of this FIL, so that it cannot be sold on centralized exchanges.
3. The total amount of FIL is too much, with many currencies such as Boca and Near, which are actually over one billion. However, their projects have also found that they are not effective and must improve inflation. And Fil should also think about it. With so many coins being released and diluted every day, can prices rise?
4. FVM used to look forward to it, but now it seems like a bunch of dog poop, with low performance and more junk than any public chain on the market. So what else is there for FVM to exist? The transaction volume is less than 2000 in a day, compared to the near blockchain, which has a daily transaction volume of 8 million. How to compare?
5. How advanced is your technology in the IPC subnet, which has been delayed and then delayed? If it were a cow, how would FVM develop like this? Dogs don't even pay attention. IPC is also garbage, even if you develop it, it won't be of much use
6. Do you claim to be doing something and doing useless work? Do some meaningless things, the founder has long stopped managing FIL.
   In summary, don't think about solving the problem from a technical and ecological perspective. Simply destroy the tokens quickly, accurately, and ruthlessly. That is the only way to increase the coin price

[Fatman13]

I support the burning of mining reserve as I shared the exact thought last year. Why not move the proposal to FIP repo? i see community already falsely thought this is in FIP pipeline.

[David-609]

If a market is not profitable for a long period of time, it is bad, and the sentiment is contagious. By agreeing to burn 15% of the token supply, what should the FF Foundation also do

[OpenGate01]

During the last bull market, Filecoin laid a solid foundation. Here are some thoughts from our team on how to improve further:

First, burn tokens. Reasonably burning tokens will boost FIL's price, attracting original investors back to Filecoin and encouraging new traffic.

Second, support ecosystem development and promote on-chain data prosperity. We have already held the first round of ecosystem rewards, which is a great progress. In the 2024 work plan, we mentioned promoting on-chain data interactions, but specific plans have not yet been seen. On-chain interaction data is crucial for investors in deciding whether to buy Filecoin, similar to financial statements for listed companies. Although the TON chain also has many issues, we shouldn't avoid developing FVM due to performance concerns.

Third, cultivate 10 ecosystem projects with profitability. Profitability is the best way to attract traffic. The top 10 listed projects on each blockchain are very important and basically determine whether the ecosystem can develop.

Fourth, strengthen community building and attract new traffic. Our TG community only has 4,000 members, and the DC community only has 800 members. Many investors will not join the Slack community, which is a very serious issue as they might think our project has failed. We can learn from TON's approach by using small airdrops to attract a large number of users.

Fifth, promote the development of real paid storage, which is a relatively long process. The new Datacap system has given notaries more flexibility, which I think is a very good improvement. We should leverage the enthusiasm of notaries. We are planning to establish a distributed storage association in Australia to expand Filecoin's influence in Web2.

[jnthnvctr]

Are you on the Filecoin slack? Very much agree with many of these points - want to pick your brain about what (2) and (4) might look like

(feel free to react with an emoji if you'd like to join a discussion on this - or ping jnthnvctr on the filecoin slack)

[narkissos]

Every effort should be made to make Filecoin's price more attractive. Looking at the history of cryptocurrency development, it has been price surges that attracted more people to join, thus driving the development of a coin's ecosystem, rather than the ecosystem driving the price. Humans are generally emotional beings - an attractive price often garners more attention than a disappointing one, not just in the secondary market, but also from developers and the primary market. Token burning is a very effective measure to increase the price. A circulation of 2 billion is too much; a circulation of 200 million or tens of millions of coins would be better, so burning is a necessary measure. At the same time, the tokens released by the team are too disappointing. Hopefully, there can be measures to curb this death spiral.

[happykiss359]

say very good

[15012700225]

Support. But every thing is slowly for filecoin, Hope FF/PL have a change this time.

[fy810519]

If it is beneficial to ecological development and the increase of the currency price, I suggest burning 300 million FIL tokens.

[NDLABS-Leo]

Support, if the price of Fil is lower than investors expect, then people will not participate in the ecology of Fil, "Mining Reserve" is meaningless.

[luosha63]

Support and hope to come up with a proposal that is beneficial to the ecology

[806253abc]

Supporting the burn of 300 million tokens to reduce FDV. As early miners, we have suffered significant losses, and the community consensus is on the verge of collapse. Only by burning tokens to stimulate price increases can the entire project have hope for success.

[sharkfee]

虽然我不认为3亿的挖矿储备的销毁，会对价格有任何帮助。但有行动好过于没有行动，支持！

[88phnx88]

我们已经实施了 FIP93：将所有资金从 f090 转移到 f099

我们呼吁利用错过的网络现代化日期

• 我们邀请主要的 CalibrationNet 运营商与我们一起进行最后一次测试，并在 2018134/2024-10-02T12:00:00Z 期间激活 EverythingBurns
• 我们邀请所有 MainNet 节点运营商加入我们，共同庆祝我们的团结 4399440/2024-10-30T12:00:00Z

可以在没有审查的情况下进行讨论：88phnx88/lotus#1

[happykiss359]

讨论3个月了有毛用。。大部分人都同意了又不能真正燃烧。。

[mjroddy]

Whilst I agree that creating more burn is very important, I do not think that burning the mining reserve here is the optimal strategy.

There have been discussions about establishing a 'future ecosystem/development fund' controlled by the community. I would rather see the 300m be allocated to that. i.e we don't need to think about this 300m specifically for mining incentives.

This doesn't prevent, some or even all of these funds being burned at a future date, but it does allow us flexibility and a clear path of how we could fund tooling, applications and growth initiatives (including for SP's) going forward.

Filecoin will require significant effort by teams and individuals to compete, I don't believe we should be relying solely on FF/PL initial vesting tokens or relying on their capital allocation decisions of what should be built/funded.

Additionally, not all teams building tooling, infrastructure etc. should be forced to create their own token and economic designs because this comes with significant overheads and complexities that aren't necessarily needed and could deter these teams, whilst potentially diluting the liquidity and value proposition of FIL.

Today, this mining reserve is worth ~$1.1B USD, that will likely increase from here and could provide the community a significant treasury in which we can utilise to drive a greater value proposition of Filecoin and accelerate growth. It will be near impossible imo to get another FIP through that would increase supply if we wanted to do something like this in the future.

We do not have to spend the mining reserve today, we can simply let it accumulate in this treasury fund earmarked for initiatives down the track (post FF/PL vesting), Having a large pool of capital like this will attract builders and I think this will be incredibly important in the coming years. Again, this doesn't exclude the idea of burning these tokens down the track but it does provide a means in which to drive tooling and growth which imo will be far more important to the value of FIL longer term.

So I'm against burning this mining reserve, I am for turning it towards a community treasury (ecosystem fund). I believe a large treasury fund would be a much more effective market signal then removing this supply today.

[jnthnvctr]

Its really bad for discussion to take people's serious responses and tell them to stop talking

[TippyFlitsUK]

@happykiss359 https://github.com/filecoin-project/community/blob/master/CODE_OF_CONDUCT.md#avoid-marketing-or-soliciting

[happykiss359]

sorry!

[Derek-zd]

就是逗人玩，3个月过去了都没动静，再讨论3年吧

[Derek-zd]

每隔一段时间就搞个振奋人心的提案，故意钓鱼呢

[Porterstowell]

QUESTION: Who has tried to raise capital where the FDV was flagged as an issue? I would love to hear feedback from you on what happened.

[mjroddy]

I was waiting for someone else to reply.....

My two cents. Inflation and max supply has certainly come up in some conversations I've had.

But it's certainly hasn't been a show stopper. Most 'traditional investors' aren't familiar enough with crypto tokenomics.

FDV has to be understood in the context of each business. No different to a PE ratio.

I'll also note that it is highly unlikely we'll get over 1.3 billion supply.

I would suggest that this is more a narrative problem than metric problem

[The-Wayvy]

It's not just FDV

It's that no one knows how these coins will be issued

[Stebalien]

At the moment, they're locked in an account with no keys. In my personal opinion, this FIP is just "accepting the status quo" because I'm skeptical that the community will be able to come to consensus on how these funds should be used.

[happykiss359]

We just want to know when the destruction plan can be implemented

[happykiss359]

Is this plan to be implemented on October 2nd？

[88phnx88]

calibnet 的最终测试将于 10 月 2 日进行
主网代币销毁将于 10 月 30 日进行

如果足够多的 QAP 与我们团结起来，就会发生这种情况

[happykiss359]

Great, it's finally going to be implemented! Investors have hope

[happykiss359]

Thank you for your contribution to FIL

[88phnx88]

悲伤

88phnx88/lotus#1 (comment)

[806253abc]

这也是我一直关心的话题，千万不要再错过这轮牛市行情 发自我的iPhone

…

------------------ Original ------------------ From: happykiss359 ***@***.***> Date: Wed,Sep 25,2024 9:47 AM To: filecoin-project/FIPs ***@***.***> Cc: 806253abc ***@***.***>, Comment ***@***.***> Subject: Re: [filecoin-project/FIPs] Burning the Mining Reserve (FIP-0093)(Discussion #1030) We just want to know when the destruction plan can be implemented — Reply to this email directly, view it on GitHub, or unsubscribe. You are receiving this because you commented.Message ID: ***@***.***>

[806253abc]

这是通过✅提案了吗 发自我的iPhone

…

------------------ Original ------------------ From: 鳳凰 ***@***.***> Date: Wed,Sep 25,2024 3:35 PM To: filecoin-project/FIPs ***@***.***> Cc: 806253abc ***@***.***>, Comment ***@***.***> Subject: Re: [filecoin-project/FIPs] Burning the Mining Reserve (FIP-0093)(Discussion #1030) calibnet 的最终测试将于 10 月 2 日进行 主网代币销毁将于 10 月 30 日进行 如果足够多的 QAP 与我们团结起来，就会发生这种情况 — Reply to this email directly, view it on GitHub, or unsubscribe. You are receiving this because you commented.Message ID: ***@***.***>

[momack2]

I participated in a discussion about this FIP at FDS-4 in Brussels, and also discussed this with a few SPs at FIL Singapore. Important takeaways from those conversations:

• The Mining Reserve is FIL set aside for critical future rewards for Filecoin services - we can think of this as the "Filecoin Network R&D budget" for major new business lines. Burning that long-term R&D endowment for short-term gain is short-sighted and bad for Filecoin (both now and in the future).
• Example future R&D efforts I could see this fund that help expand Filecoin:
  1. Creating a DAO-voting treasury for the community to fund new research/improvements/PMF for Filecoin
  2. Rewards for a larger-scale test of major network upgrades (ex testing improved Filecoin cryptoeconomics, new cc rewards model, etc)
  3. Rewards for new L1 proof types - like future rewards pools we might allocate to SPs bringing in more revenue to filecoin via storage classes like PDP, retrieval testing, etc.
  4. Rewarding teams of "storage sales" experts that bring in qualified storage leads to Filecoin, so most SPs don't need to do client BD or acquisition to upgrade capacity to store real data
• I think well crafted and productive FIPs for any of the above items would clearly grow the value of Filecoin as a network in a way that SPs, clients, token holders, ecosystem devs, and builders would all support this network-level investment in making Filecoin better. Therefore, I disagree with the perception that "this reserve is effectively burned anyway since it would require a FIP to use". I believe the Filecoin community can see the benefit of putting our treasury against valuable investments for network growth, and pass a FIP to that end.
• IMHO the existence of the Mining Reserve is minimally impactful on overall FIL valuation (which I believe is the motivation for this proposal), and while removing it may have some short term impact on value (like maybe a small % bump for a few weeks), overall 1.7 vs 2B total supply is not meaningfully different long-term at a network level, and I think a short-sighted move like this will actually signal negative growth trajectory for Filecoin on a ~months-years timescale. Bad for the whole community.
• There is no coming back from burning tokens (the best way to decrease ecosystem standing would be to make total supply or burn untrustworthy). That's 300M FIL the network no longer has the power use for high-growth investments in the future that can compound Filecoin's success and prosperity. We have shut off an option for network-governed growth that limits our future growth.

These are my observations and takeaways after participating in conversations with multiple community members. I am against this FIP (and even more strongly an attempt by a few community members to circumvent network governance and launch this half-baked idea via a fork). smh

[The-Wayvy]

If we had proper governance then there wouldn't be a need to "circumvent" anything

When is the new governance FIP coming online?

It's been over a year since the first draft came out

[happykiss359]

There is no good price, everything you say is just air

[806253abc]

think you're just a selfish, arrogant and self-righteous guy, and you still think about it when the price falls like this? Don't you know how many SPs, market investors are discouraged, 21 years online to now from 238U to today 4U...... All kinds of good news continue every day, every day to cooperate with this project, that institution cooperates, what is next door m, fur, pick-up, has it been out of the circle so far, it is ridiculous, stfil once officially released the platform, how is it now, so many industry bigwigs in the blockchain industry, don't you see the future value of fil, why don't people see the investment, you are so smart, the value of opposing 👎 bitcoin today is that the overall supply is small, and the world can reach a consensus, fil 2 billion issuance data, does it affect anything by destroying the point, for example, the price of 0.0000fil has risen, isn't it still valuable, stupid, the market is wailing again, you are against a ghost...... Standing up to talk doesn't hurt back, right, without the support of the strong cohesion and consensus of the community, can there be today's 22.5e, is it increasing every day, and the hearts of the people are united Taishan moves? Once the morale of the army is weakened, it will not be able to survive, this is an eternal truth, you think about it more and take care of yourself 发自我的iPhone

…

------------------ Original ------------------ From: MollyM ***@***.***> Date: Fri,Sep 27,2024 0:39 AM To: filecoin-project/FIPs ***@***.***> Cc: 806253abc ***@***.***>, Comment ***@***.***> Subject: Re: [filecoin-project/FIPs] Burning the Mining Reserve (FIP-0093)(Discussion #1030) I participated in a discussion about this FIP at FDS-4 in Brussels, and also discussed this with a few SPs at FIL Singapore. Important takeaways from those conversations: The Mining Reserve is FIL set aside for critical future rewards for Filecoin services - we can think of this as the "Filecoin Network R&D budget" for major new business lines. Burning that long-term R&D endowment for short-term gain is short-sighted and bad for Filecoin (both now and in the future). Example future R&D efforts I could see this fund that help expand Filecoin: Creating a DAO-voting treasury for the community to fund new research/improvements/PMF for Filecoin Rewards for a larger-scale test of major network upgrades (ex testing improved Filecoin cryptoeconomics, new cc rewards model, etc) Rewards for new L1 proof types - like future rewards pools we might allocate to SPs bringing in more revenue to filecoin via storage classes like PDP, retrieval testing, etc. Rewarding teams of "storage sales" experts that bring in qualified storage leads to Filecoin, so most SPs don't need to do client BD or acquisition to upgrade capacity to store real data I think well crafted and productive FIPs for any of the above items would clearly grow the value of Filecoin as a network in a way that SPs, clients, token holders, ecosystem devs, and builders would all support this network-level investment in making Filecoin better. Therefore, I disagree with the perception that "this reserve is effectively burned anyway since it would require a FIP to use". I believe the Filecoin community can see the benefit of putting our treasury against valuable investments for network growth, and pass a FIP to that end. IMHO the existence of the Mining Reserve is minimally impactful on overall FIL valuation (which I believe is the motivation for this proposal), and while removing it may have some short term impact on value (like maybe a small % bump for a few weeks), overall 1.7 vs 2B total supply is not meaningfully different long-term at a network level, and I think a short-sighted move like this will actually signal negative growth trajectory for Filecoin on a ~months-years timescale. Bad for the whole community. There is no coming back from burning tokens (the best way to decrease ecosystem standing would be to make total supply or burn untrustworthy). That's 300M FIL the network no longer has the power use for high-growth investments in the future that can compound Filecoin's success and prosperity. We have shut off an option for network-governed growth that limits our future growth. These are my observations and takeaways after participating in conversations with multiple community members. I am against this FIP (and even more strongly an attempt by a few community members to circumvent network governance and launch this half-baked idea via a fork). smh — Reply to this email directly, view it on GitHub, or unsubscribe. You are receiving this because you commented.Message ID: ***@***.***>

[TippyFlitsUK]

@806253abc, you are submitting multiple identical posts outside of conversation threads. It is not possible to determine who you are replying to!

Please make sure to post your comments in reply threads so we are able to see the context of your responses.

Many thanks 🙏

[806253abc]

think you're just a selfish, arrogant and self-righteous guy, and you still think about it when the price falls like this? Don't you know how many SPs, market investors are discouraged, 21 years online to now from 238U to today 4U...... All kinds of good news continue every day, every day to cooperate with this project, that institution cooperates, what is next door m, fur, pick-up, has it been out of the circle so far, it is ridiculous, stfil once officially released the platform, how is it now, so many industry bigwigs in the blockchain industry, don't you see the future value of fil, why don't people see the investment, you are so smart, the value of opposing 👎 bitcoin today is that the overall supply is small, and the world can reach a consensus, fil 2 billion issuance data, does it affect anything by destroying the point, for example, the price of 0.0000fil has risen, isn't it still valuable, stupid, the market is wailing again, you are against a ghost...... Standing up to talk doesn't hurt back, right, without the support of the strong cohesion and consensus of the community, can there be today's 22.5e, is it increasing every day, and the hearts of the people are united Taishan moves? Once the morale of the army is weakened, it will not be able to survive, this is an eternal truth, you think about it more and take care of yourself 发自我的iPhone

…

------------------ Original ------------------ From: MollyM ***@***.***> Date: Fri,Sep 27,2024 0:39 AM To: filecoin-project/FIPs ***@***.***> Cc: 806253abc ***@***.***>, Comment ***@***.***> Subject: Re: [filecoin-project/FIPs] Burning the Mining Reserve (FIP-0093)(Discussion #1030) I participated in a discussion about this FIP at FDS-4 in Brussels, and also discussed this with a few SPs at FIL Singapore. Important takeaways from those conversations: The Mining Reserve is FIL set aside for critical future rewards for Filecoin services - we can think of this as the "Filecoin Network R&D budget" for major new business lines. Burning that long-term R&D endowment for short-term gain is short-sighted and bad for Filecoin (both now and in the future). Example future R&D efforts I could see this fund that help expand Filecoin: Creating a DAO-voting treasury for the community to fund new research/improvements/PMF for Filecoin Rewards for a larger-scale test of major network upgrades (ex testing improved Filecoin cryptoeconomics, new cc rewards model, etc) Rewards for new L1 proof types - like future rewards pools we might allocate to SPs bringing in more revenue to filecoin via storage classes like PDP, retrieval testing, etc. Rewarding teams of "storage sales" experts that bring in qualified storage leads to Filecoin, so most SPs don't need to do client BD or acquisition to upgrade capacity to store real data I think well crafted and productive FIPs for any of the above items would clearly grow the value of Filecoin as a network in a way that SPs, clients, token holders, ecosystem devs, and builders would all support this network-level investment in making Filecoin better. Therefore, I disagree with the perception that "this reserve is effectively burned anyway since it would require a FIP to use". I believe the Filecoin community can see the benefit of putting our treasury against valuable investments for network growth, and pass a FIP to that end. IMHO the existence of the Mining Reserve is minimally impactful on overall FIL valuation (which I believe is the motivation for this proposal), and while removing it may have some short term impact on value (like maybe a small % bump for a few weeks), overall 1.7 vs 2B total supply is not meaningfully different long-term at a network level, and I think a short-sighted move like this will actually signal negative growth trajectory for Filecoin on a ~months-years timescale. Bad for the whole community. There is no coming back from burning tokens (the best way to decrease ecosystem standing would be to make total supply or burn untrustworthy). That's 300M FIL the network no longer has the power use for high-growth investments in the future that can compound Filecoin's success and prosperity. We have shut off an option for network-governed growth that limits our future growth. These are my observations and takeaways after participating in conversations with multiple community members. I am against this FIP (and even more strongly an attempt by a few community members to circumvent network governance and launch this half-baked idea via a fork). smh — Reply to this email directly, view it on GitHub, or unsubscribe. You are receiving this because you commented.Message ID: ***@***.***>

[TippyFlitsUK]

@806253abc, you are submitting multiple identical posts outside of conversation threads. It is not possible to determine who you are replying to!

Please make sure to post your comments in reply threads so we are able to see the context of your responses.

Many thanks 🙏

[806253abc]

Support your point of view, the market will not dare to do anything without a price, just like a beautiful country does not cut interest rates, China does not stimulate the economy, where there will be a reason for the stock market 📈 to rise, why don't they understand this fact 发自我的iPhone

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------------------ Original ------------------ From: happykiss359 ***@***.***> Date: Fri,Sep 27,2024 0:55 PM To: filecoin-project/FIPs ***@***.***> Cc: 806253abc ***@***.***>, Mention ***@***.***> Subject: Re: [filecoin-project/FIPs] Burning the Mining Reserve (FIP-0093)(Discussion #1030) There is no good price, everything you say is just air — Reply to this email directly, view it on GitHub, or unsubscribe. You are receiving this because you were mentioned.Message ID: ***@***.***>

[The-Wayvy]

Bro, just write in Chinese

[helloivanco]

Summary of FIP-0093 (Burning the Mining Reserve)

TL;DR:

FIP-0093 proposes to burn 300M FIL from Filecoin’s mining reserve, reducing the total supply by 15% to address the high Fully Diluted Value (FDV) relative to the Market Cap (MC). This burn aims to reduce dilution concerns for new investors, making Filecoin’s tokenomics more attractive and signaling long-term stability.

Main Arguments For the Proposal:

1. Reducing FDV Overhang:

• @jnthnvctr and other supporters argue that burning the mining reserve will improve the ratio between FDV and MC, making Filecoin more appealing to investors. High FDV relative to MC is seen as a deterrent for new investment.
• The burn will simplify Filecoin’s tokenomics and reduce future inflation concerns, eliminating a source of confusion for potential investors.

2. Simplifying Tokenomics:
Several contributors, including @OpenGate01, believe the burn would make Filecoin easier for investors to understand. By eliminating a large reserve of tokens, Filecoin would be seen as a more straightforward investment, reducing complexity.

3. Positive Impact on Price:
Supporters like @Porterstowell and @Fatman13 expect the burn to create a positive price impact. By reducing the available supply, they believe it would stimulate token value, potentially creating a virtuous cycle of ecosystem growth and re-engaging dormant users.

Main Arguments Against the Proposal:

1. Minimal Long-Term Impact on Price:
@nicola and @momack2 believe that burning the mining reserve will not have a significant long-term effect on price. Even if the reserve is burned, they argue that the price impact would be minimal—around a 15% repricing—because markets often don’t behave rationally.

2. Risk of Limiting Future Innovation:
Critics like @momack2 emphasize that the mining reserve acts as a potential fund for future network development. Burning it now may prevent the network from incentivizing new types of mining or funding ecosystem innovations. By eliminating these tokens, Filecoin could be limiting its flexibility for future growth.

3. Alternative Strategies:
@mjroddy suggests creating a community treasury with the mining reserve instead of burning it. This treasury could fund future projects, provide grants, or incentivize important ecosystem developments like tooling or infrastructure. By keeping the reserve, Filecoin would have more strategic options for future investments.

4. Fairness Concerns:
Some participants argue that burning the mining reserve without reducing other sources of inflation, such as tokens held by Protocol Labs or the Filecoin Foundation, would be unfair. @oliver776 suggested that these organizations should burn an equal proportion of their holdings to ensure fairness across all stakeholders.

Suggestions for Improvements or Alternatives:

1. Phased Burn:
Instead of an immediate and complete burn, @solopine suggests a phased or partial burn to avoid potential disruptions in the ecosystem and give participants time to adjust to the new tokenomics.

2. Create New Incentive Structures:
Instead of burning the reserve, new incentive mechanisms for Storage Providers (SPs) and miners could be introduced. This could involve using transaction fees or other network revenues to incentivize network participants without needing to rely on inflationary tokens from the reserve.

I̶m̶p̶l̶e̶m̶e̶n̶t̶a̶t̶i̶o̶n̶ T̶i̶m̶e̶l̶i̶n̶e̶:̶

-̶ F̶i̶n̶a̶l̶ T̶e̶s̶t̶:̶ A̶ f̶i̶n̶a̶l̶ t̶e̶s̶t̶ o̶f̶ t̶h̶e̶ b̶u̶r̶n̶ m̶e̶c̶h̶a̶n̶i̶s̶m̶ w̶i̶l̶l̶ t̶a̶k̶e̶ p̶l̶a̶c̶e̶ o̶n̶ O̶c̶t̶o̶b̶e̶r̶ 2̶, 2̶0̶2̶4̶, o̶n̶ C̶a̶l̶i̶b̶r̶a̶t̶i̶o̶n̶N̶e̶t̶.
-̶ M̶a̶i̶n̶N̶e̶t̶ A̶c̶t̶i̶v̶a̶t̶i̶o̶n̶:̶ I̶f̶ s̶u̶c̶c̶e̶s̶s̶f̶u̶l̶, t̶h̶e̶ b̶u̶r̶n̶ w̶i̶l̶l̶ b̶e̶ e̶x̶e̶c̶u̶t̶e̶d̶ o̶n̶ t̶h̶e̶ M̶a̶i̶n̶N̶e̶t̶ o̶n̶ O̶c̶t̶o̶b̶e̶r̶ 3̶0̶, 2̶0̶2̶4̶.

Conclusion:

The community remains divided on FIP-0093. Proponents argue that burning the reserve will simplify Filecoin’s tokenomics, reduce FDV, and boost the token’s price. However, opponents caution against the long-term risks of eliminating this reserve, suggesting that it could be better utilized for future network development. The proposal is still being debated as testing and preparation continue for a potential MainNet launch in late October 2024.

[happykiss359]

FIL must be completely destroyed, otherwise a large number of FIL investors will withdraw. Those who do not approve of destruction can play with it

[momack2]

Thanks for this helpful summary / synthesis, Ivan! FWIW I'm a +1 on @mjroddy's alt proposal (but with some sort of gradual community unlocking to ensure long-term impact).

One quick clarification - the "implementation timeline" discussed is not accurate. That is just a splinter group trying to force the proposal through without governance. There is not currently a Draft FIP for this effort (though AFAIK one is WIP), nor a network implementation timeline since the community is divided.

[helloivanco]

Hi @momack2 - thanks. I've struck out the "implementation timeline" from the summary. It appears the efforts to force the proposal have ceased and there are no future plans.

Reference: 88phnx88/lotus#1 (reply in thread) translated as:

"The groups have assured us that they are interested. We believe Hu Ge paid them to skip the testing.

We have updated the code again. Our mission is to provide direction, and we have completed this task. There are no other plans for the future.

May peace and prosperity prevail in the family."

[happykiss359]

fil game over!!!!

[happykiss359]

FIL GAME OVE!!