STORJ Token Balances and Flows Report: Nov. 30, 2018


The STORJ token is an integral part of the Storj network, providing 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. Today, we are pleased to publish our first quarterly STORJ token balances and flows report.

We will update this report for the next town hall in January 2019 and then we expect to publish it quarterly at each subsequent town hall. While it is possible to recreate this information directly from the Ethereum blockchain, we think it is helpful for storage node operators, customers, satellite operators, and others who use the token, to have this information presented in a transparent manner for easy consumption. In the same spirit that we make our code, roadmaps, and other items publicly available and transparent, we want to make the token flows accessible as well. As with all of our posts concerning the token, please see the disclaimer at the bottom of this post.

The detailed report is below but the quick summary is:

    a) our token sale put 75.1 M STORJ into circulation.

    b) of the 50.1 M STORJ reserved for conversion of the legacy SJCX token, 43.1 M have been used for conversion, and there are approximately 6.9 M still in reserve for conversion.

    c) of the 54.8 M in operational reserves initially held by Storj Labs after the sale, approximately 5.8 M have been used, primarily for paying storage node operators and other third-party service providers, leaving 49.1 M in our operational reserves.

    e) Finally, 245.0 M STORJ remain in timelock, which is explained in greater detail below.

    f) This means that 75.1 + 43.1 + 5.8 = approximately 124.0 M STORJ are in circulation. Another 49.1 M + 6.9 M = 56.0 M are in non-timelocked conversion and operational reserves.

    g) The total number of STORJ is the 124.0 M in circulation plus the 56.0 M in non-timelocked reserves plus 245.0 M in timelocked reserves = 425.0 M.

We’ve provided addresses for our major reserves below, so that totals can be easily verified.

The success of the Storj community depends on all participants having confidence in and understanding of the STORJ token. If you have questions, clarifications, or suggestions on how we can better present this information in the future, please let us know!

Overview

In May of 2017, Storj Labs BVI, a wholly owned subsidiary of Storj Labs Inc., conducted a public token sale. While most of our focus in the past year has been on building our company and our network, we want to provide a detailed update on token flows since launching the network. As a reminder, we intend to provide a quarterly update on the business and network through our quarterly town hall meeting. It is our intention to produce this token report on a quarterly basis.

Background

In 2014, the Storj Project created 500M SJCX tokens to start the Storj network. 50.0 M SJCX were sold at $0.01/token, raising $500K to fund the first version of the project. A total of 51.2 M SJCX were ever in circulation, and the remainder were never used or issued.

In 2017, Storj Labs BVI conducted an exchange offering (1) for a 1:1 conversion of the SJCX token with a new ERC-20 token called STORJ. (2)

Additionally, Storj Labs BVI conducted a follow-on offering of STORJ tokens at a price between $0.25-$0.50/token, depending on the size of allocation. In this token sale, 72.1 M STORJ tokens were sold, raising $30 M to fund operations.

During the course of the 2017, 500M STORJ tokens were generated and subsequently 75 M STORJ tokens were cryptographically burned bringing the total amount of available STORJ tokens to 425.0 M.

To provide a better understanding of the sale and what has subsequently happened, see table II below, which breaks STORJ token holdings and flows into four categories:

    a)Tokens sold/released in the token sale     b)Tokens used for conversion of SJCX     c)Tokens for regular network operations (operational reserves)     d)Tokens in long term lockup (long term reserves)

Tokens Sold/released in the Token Sale

72.1 M STORJ tokens were sold during the sale (line 1) and 2.9 M were allocated to service providers associated with the sale (line 2). No tokens were given to Storj employees or founders as part of the token sale. Approximately 0% of the token sale proceeds went to funding Lamborghinis or other sports cars for our founders or employees.

As a result, a total of 75.1 M tokens (line 4) were put into circulation as part of the sale.

Tokens Used for Conversion of SJCX

In parallel, we also launched a token converter application to convert SJCX tokens to STORJ tokens at a predefined rate of 1:1. We reserved a total of 50.1 M STORJ tokens for conversion purposes (line 7). As of today, 43.1 M (line 5) of this reserve have been used to convert, and an additional 6.9 M (line 6) remain to be converted. (3)

Tokens Used for Regular Network Operations (Operating Reserves)

Storj Labs reserved 54.8 M tokens for regular network operations (line 13). These tokens are held by Storj Labs and are intended to be used only for operations as described below.

Storj Labs provides decentralized cloud storage at rates that are competitive with the large cloud providers. End users upload data to the network. Files are encrypted, broken up into pieces, and stored on a large network of disk drives. At the peak of the current version of the network, it had over 150K storage nodes operated by 70K different node operators in over 180 countries and territories.

Storj Labs quotes prices for storage and bandwidth to end users in United States dollars (“dollars”). End users can pay in dollars or with several cryptocurrencies, including BTC, ETH, or in STORJ tokens, based on current spot prices on the major exchanges.

While we quote payment rates to storage node operators in dollars, Storj Labs pays storage node operators using the STORJ token, based on the current spot price on the major exchanges. If, in any given month, the amount to be paid to storage node operators exceeds the amount of STORJ tokens received from customers, there is a net outflow of STORJ tokens (line 8). Over the past year, this amount has equaled approximately 2.8 M STORJ tokens. We expect this number to increase substantially with the launch of the V3 network.

In addition to storage node operator payments we make payments to certain other service providers (e.g. community leaders, bug bounty participants) in STORJ token. This amount (line 9) was approximately 1.2 M.

Finally, we have a small bonus program for Storj Labs employees that is primarily designed to incentivize our team to access the network, stay abreast of developments from the user’s perspective and provide feedback on features and developments moving forward. This program pays out a set number of tokens based on the achievement of network milestones, such as product development milestones, achieving service level targets, network size, etc. This amount represents a small percentage of total employee compensation and is intended to align employee incentives with the ongoing development and improvement of the network. Total payouts in the last year for this program (line 11) were approximately 1.3 M. Again, no Lamborghinis.

The total amount of circulating supply added through network operations was therefore 5.8 M (line 12) and Storj Labs’ operating reserves dropped from 54.8 M to 49.1 M (line 13).

Long-term Lockup

An additional 245 M STORJ are held by Storj Labs for future use (line 15). These tokens are also under strict controls. In addition, these tokens have been placed under a 6-month cryptographic lockup. When the current lockup ends in December of 2019, we currently expect to relock the 245 M tokens, replacing the current lockup scheme with a longer term and more nuanced approach. That new approach will be described in a subsequent post.

Totals

The total circulating supply of STORJ tokens after the sale (line 17) was 75.1 M. As of November 30, 2018, this has increased by 48.9 M to 124.0 M due to the conversion of 43.1 M SJCX tokens (line 5) and the use of 5.8M STORJ tokens for network operations.

Although we don’t think that it is a meaningful number, if all unlocked tokens were to be immediately put into circulation, the total circulating supply today would be 180.0 M (line 19).

The maximum total that could be in circulation is, as stated above, 425.0 M (line 20). (4)

Circulating STORJ tokens

Reserves

To aid in the reconciliation of the above numbers with the appropriate reserves, we have provided a list of the major reserves of STORJ tokens held by Storj Labs below, along with their corresponding addresses.

There are 6.9 M STORJ tokens reserved for the converter (lines 6 and 21). There are 245.0 M STORJ tokens in long term timelock (lines 15 and 22). There are 49.1 M STORJ tokens in our operating reserves (line 13), of which 44.2 M are stored in our main COLD wallet (line 23) and the remaining 4.9 M are held in various warm and hot wallets (line 24). As there are 124 M STORJ tokens in circulation (line 17 and line 26), this leaves a total of 425 M STORJ (lines 16 and 27).

STORJ token reserves

Disclaimer

This report is provided to the many individuals in the Storj ecosystem, concerning the circulating supply and flows of the STORJ token.

The STORJ tokens are 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 tokens are 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 tokens and is subject to change as Storj Labs refines its plans. Changes to the network, the STORJ tokens, and other information referenced in this post are entirely within the discretion of Storj Labs and could result from commercial, technical or legal issues, among others. We believe that greater transparency around the STORJ token will contribute to willingness of users, storage node operators, and other service providers to participate in the network. While we have made every attempt to be accurate and thorough in the production of this report, it is provided as is, and you should not rely on this report for any decisions regarding the use, acquisition, or disposition of STORJ tokens.

  1. The sale was conducted under the terms found here: https://storj.io/sale-terms.pdf.
  2. Slightly over 50 M STORJ were reserved for conversion of the outstanding SJCX.
  3. An additional ~510K STORJ tokens were paid to SJCX holders out of our operating reserves (line 10). This includes ~340K paid manually for a set of transactions that could not be completed via the converter and ~175 K to correct issues with recipient payment addresses. A total of 43.4 M SJCX have been converted.
  4. If you are trying to reconcile to the September ‘17 blog post, you will find the following. Total STORJ tokens created (500 M), total STORJ tokens burned (75 M), total STORJ tokens in existence (425 M), and total STORJ tokens in timelock (245 M) should match precisely. Furthermore, an additional ~13.8 M SJCX tokens have converted since September ‘17, and the bulk of the 5.8 M payments from operational reserves have happened since September ‘17. Other, minor differences are a result of rounding or reclassification.