In July, we added Warren Weber to our technical advisory board. Warren is a highly experienced Ph.D. economist specializing in monetary and banking history, monetary theory and policy, and payments systems. Warren recently retired as Senior Research Officer at the Federal Reserve Bank of Minneapolis, a position he held for almost 30 years.
Since his addition to our advisory board, we have been working closely with him to produce both a transparency and economic plan for SJCX. Tokens such as SJCX are becoming increasingly more important in the conversation about next generation protocols and systems. See Crypto Tokens and the Coming Age of Protocol Innovation, App Coins and the dawn of the Decentralized Business Model and Fat Protocols for further reading on the subject. We understand that as the primary holder of Storjcoin X (SJCX), we bear a significant responsibility to the users and holders of our token. As such, we want to put our best foot forward with respect to transparency and the usage of SJCX.
Today, we are making a new commitment with respect to the responsible use of SJCX. We pledge to introduce no more than 10 million SJCX per year to the supply in 2016-2017.
From our inception in 2014 to today we have used approximately 2 million SJCX per year. Almost all of which has gone to fund community volunteers and pay farmers in Test Groups. As the platform continues to scale, we feel this is a more than ample supply to continue to support the invaluable efforts of volunteers and to reward farmers for their crucial role in the development of this platform. Looking forward, any tokens beyond this earmarked amount will be funded by commercial operations. We will provide a more detailed schedule and usage plan in the next update.
As for plans in 2018 and beyond, we have determined that we still do not have enough information at this time to put forth a solid plan (we simply can’t predict the future). For example, we plan to add micropayments to Storj which requires locked SJCX in payment hubs to function. Rather than have the renter or farmer have their funds in limbo (imagine paying $30 for $5 of storage and getting the $25 back 6 month later), SJCX from the outstanding funds could be used instead. That would enable renters and farmers to use the platform with the least amount of friction. For this particular example, we simply do not know how much SJCX should be locked up to facilitate this until it is running in production, and we have real data.
Therefore, we plan to provide an update on what will happen in 2018 and beyond no later than Q3 2017, as we are confident that after running a live production Storj network for a few months we will have the necessary information to put forth a solid plan.
As Warren Weber pointedly and accurately commented:
“For tokens like SJCX to have value, it is necessary that the growth of supply to the market is limited so that they remain scarce and that the growth policy is transparent to potential holders. Through the SJCX policy decision that Storj has taken to limit the issuance of SJCX in 2016-2017 to 10 million tokens per year, Storj has simultaneously limited supply and made its policies clear to the Storj community and SJCX holders, together with the Storj ecosystem. As the usage of SJCX increases to fuel the growth of the Storj network, I believe this policy is in the best interest of the Storj ecosystem. Effectively communicating a transparent approach to the Storj ecosystem regarding the issuance and use of SJCX will continue to be a top priority going forward.”
We thank you for your patience as we continue to work on our transparency and economic plans. No one has attempted this before, so we want to take careful, rational, and well planned approaches as this will set future precedents for ourselves and others.
No more than 10 million SJCX per year added to the supply in 2016-2017. Updated plan no later than Q3 2017, after the production system has been running long enough to give us the necessary information.