As you may have noticed, we’ve spent most of the last nine months talking about the Storj network. We’ve focused most of our posts around our plans for (and significant progress towards) building a more economical, highly secure, highly performant, and very durable decentralized storage network.
We haven’t spent a ton of time talking about the utility token, STORJ. For the most part, we think that decentralization is bigger/more interesting than blockchain, and that blockchain is bigger/more interesting than cryptocurrencies and tokens. We are, first and foremost, a decentralized storage network and community; the STORJ token is simply an efficient and effective means to facilitate the transfer of value between those who contribute excess storage capacity and bandwidth to the network and those who utilize that excess capacity for the storage and retrieval of data.
The STORJ token has had an important role to play for many different participants in the network, and that importance will increase as V3 launches and scales. We do think that it will be critical to the network’s success for those participants to have a greater understanding of, visibility around, and confidence in the STORJ token. So, over the next few days and weeks, we will be publishing a number of important posts and updates about our policies concerning the STORJ token.
How the STORJ Token is Used—And By Whom
a. The STORJ token is used to provide incentives for storage node operators to contribute stable, performant, long-term storage and bandwidth to the network. Today, all storage node operators are compensated for storage and bandwidth usage in STORJ token.
b. The STORJ token provides users with an effective and efficient option for buying storage and bandwidth. While we quote prices today in dollars, users can pay in STORJ token or fiat.
c. The STORJ token enables Storj Labs to efficiently and effectively conduct the network. Specifically, it enables us to compensate large numbers of operators (there were over 70,000 operators in the V2 network) in large numbers of countries (over 180 countries and territories in V2). The token also enables programmatic payments (e.g. via smart contracts), and micropayments. In fact, we have been one of the leaders in crypto payments.
To get a sense of scale, for any given file stored on the network, several thousand different storage nodes may be involved in the storage, transfer and distribution of that file. For a customer storing thousands of files, that can mean millions of small transactions to different addresses across multiple geographies.
d. STORJ token is used to provide demand partners (e.g. the many members of our Open Source Partner Program) with incentives for driving demand to the network.
e. STORJ token serves as a medium of exchange for Satellite operators within the Storj Labs “Tardigrade” branded and curated storage network.
f. STORJ token can serve as a medium of exchange in completely decentralized, non-Tardigrade networks.
We believe that all these members of our community must have confidence in the STORJ token. We think that a) open and transparent policies around the STORJ token and b) clear information on balances and flows will help provide the confidence needed for the network to expand and operate stably.
What Will We Be Publishing
In the next few days, we will release the following documents and articles related to the STORJ token.
1.The STORJ Token Balances and Flows Report: This report will document the current balances/supply of STORJ tokens, the major reserves, and the uses/flows of tokens since the token sale in May of 2017. We plan to publish this report quarterly, in conjunction with our quarterly town hall meeting, the next of which is scheduled to be held on January 16.
2.Treasury and Cryptographic Controls: This post will describe the various classes of token reserves held by Storj Labs, and provide an overview of the policies by which we ensure the security and proper use of those STORJ tokens (as well as other cryptocurrencies held by the company).
3. The Timelock Policy: The largest single reserve of STORJ tokens is the 245 M tokens, which have been held in cryptographic timelock since the token sale. To date, we have relocked these tokens in rolling 6-month intervals. We will be adopting a longer term and more nuanced policy when the current timelock expires, and this overview outlines that new policy.
4. Additional Usage Policies and Governance: We are putting in place additional controls to make sure that Storj Labs and our service providers appropriately handle tokens that they own. We also expect to put in place a governance board to oversee company policies such as those mentioned in this post. We hope to have all of those items finalized in time for our next town hall.
As always, we appreciate community input. And, in true open source spirit, we encourage others to take, use, and modify these policies and documents freely. We think that the promulgation of best practices will be key for our industry as a whole to grow and prosper.
The STORJ token is intended to facilitate the provision and receipt of data storage and related services through Storj Labs’ software application, which serves as a user interface and development platform on the network. The STORJ token is not intended to be a digital currency, security, commodity or any other kind of financial instrument.
The contents of this publication contain a high-level overview of the network and the STORJ token and is subject to change as Storj Labs refines its plans. Changes to the network, the STORJ token, and the policies referenced in this post are entirely within the discretion of Storj Labs and could result from commercial, technical or legal issues, among others.