STORJ Token Balances and Flows Report: Q1 2021

May 28, 2021

The STORJ token is an integral part of our decentralized cloud storage network. STORJ tokens are a quick and easy way to transfer value between those who provide storage capacity and bandwidth to the network, and those who use the network to store and retrieve data. Our quarterly token reports give details on the balances and flows of STORJ tokens in the preceding quarter. We deliver a summary of these reports, along with updates on the business and network, in our quarterly town hall meetings that are posted online

Our first token report was published in December 2018, and we have published quarterly reports ever since, all of which are available on our blog. We are pleased now to publish this quarterly STORJ token report for Q1 2021. 

The information that is in this report can be recreated directly from the Ethereum blockchain, but we compile it here for the convenience of our community. We present the token flows in these blog posts to provide a clear and transparent resource to all. Just as we make our code and other materials publicly available, we make our token balances and flows open and accessible.

As with all of our quarterly token reports, we are providing an update not just on token flows but also on the tokens we hold in long term lock ups. In 2017, following our token sale, we divided 245M STORJ tokens and placed them in a six-month lockup. As we described in a blog post in December 2017, at the end of that six months we divided the tokens into eight different tranches of 30.625M tokens each and gave them lock expiration dates spaced one quarter apart over eight successive quarters, setting a cryptographically enforced maximum on the number of tokens that could be unlocked or put into circulation in any given quarter over the next two years. We committed to a 90-day advance notice period for Storj to announce if there would be any changes to our unlocking and relocking. As reported in 2020, the STORJ tokens in the tranche that unlocked at the end of Q3 of 2020 were put into operational reserves. The subsequent tranche was relocked to preserve the pattern of one tranche unlocking every quarter. We now, therefore, have seven cryptographically locked rolling tranches that limit the ability of Storj to impact the circulating supply, providing transparency and predictability to the ecosystem. 

We are reducing the notice period from ninety days to sixty days to allow the company time to determine whether any tranche should be removed from the lockups and flexibility to include any such notice in these quarterly reports or separately in a blog post at least sixty days before a tranche is scheduled to be relocked. Currently, we do not plan to take any of the tranches out of the lock up schedule this year.

The following are some highlights from the table below detailing token flows in the quarter ending March 31, 2021: 

a) 214.4M STORJ were in rolling time-locked contracts as of the end of Q1 ‘21, as reflected in rows 1-3. As previously discussed, we initially relocked 100% of our time-locked tokens every six months. Subsequently we divided the timelock reserve into equal-sized tranches of 30.6M tokens that unlocked in successive quarters. In 2020, one of those tranches was taken out of the lock ups, leaving seven equal-sized tranches of 30.6M tokens. To illustrate the regular schedule for relocking, the tranche that unlocked in Q4 of 2020 was relocked to Q4 of 2022, and the tranche that unlocked in Q1 of 2021 will be relocked to Q1 of 2023, and so on. Each of the tranches has been assigned alphabetical letters (A-F, and H, with G representing the tranche that was removed in 2020). Each of the tranches has its own address, as shown in the second table below.  

b) SJCX-STORJ conversions historically were reported in rows 4-7. As explained in our Q3 2019 STORJ Token Balances and Flow Report and our Q4 2019 STORJ Token Balances and Flow Report, after providing ample notice to holders of SJCX, we executed our plan to shut down the SJCX-STORJ converter at the end of 2019. Accordingly, rows 4-7, which previously reported such activity are now intentionally left blank since there has been no conversion activity this year.

c) Rows 8-17 show operating supply at the beginning of the quarter, transfers of STORJ tokens in and out of the operating supply during the quarter, and the operating supply held by Storj at the end of the quarter. 25.6M STORJ tokens were held in operational reserves by Storj at the end of December 2020 (row 8). During Q1, we used 6.6M STORJ tokens, .4M to pay Node Operators (row 9), 1.2M to pay service providers (row 11), and 3.5M to pay early investors who were involved with the company prior to the 2017 token sale as reported in December (row 14). Another 1.5M tokens were used to pay Storj team members (row 13). This activity left a total of 19M STORJ in our operational reserves (row 17). 

d) There were 185M STORJ in circulation at the end of December 2020 (row 19). In Q1 2021, 6.6M were put into circulation from Storj’s operating supply, making the total circulating supply approximately 191.6M STORJ at the end of Q1 (row 19), with another 19M in operational and non-time-locked reserves held by Storj (row 17). The bulk of the operational reserves are held in a cold wallet.

e) The total non-circulating supply held by Storj is 233.4M (row 18), comprised of the 19M in non-time-locked reserves (operating supply at the end of the Q1 2021) plus 214.4M in time-locked reserves (long term lockup at the end of the period). The total supply is 191.6M in circulation plus the 233.4M non-circulating supply, which totals 425M STORJ tokens.


Overview

In May of 2017, Storj Labs International SEZC (formerly Storj Labs (BVI) Ltd), a wholly-owned subsidiary of Storj Labs Inc., conducted a public token sale. As a reminder, we intend to provide a quarterly update on the business and network through our quarterly town hall meeting. It’s our intention to continue producing this token report on a quarterly basis. This report has been independently verified.

Background

The Company reports its tokens to management in two categories:

   a) Long Term Lockup

   b) Operating Supply

Long Term Lockup

Our approach to using time locked tokens to support long-term sustainability was first described on a blog post in December 2018. While the specifics have changed slightly, including reducing our notice period from ninety days to sixty days for any decision to remove a tranche from the lock ups, the approach remains the same: cryptographically locked tokens in a rolling time lock that we report on quarterly to ensure transparency and predictability in our ecosystem. This also furthers our decentralization goals by reducing the ability of Storj Labs to change the supply in the short to medium term.

Reserved for SJCX Conversion

At the time of the token sale in 2017, we established a reserve and conversion mechanism for converting SJCX tokens to STORJ tokens at a predefined rate of 1:1. We initially set aside approximately 51M SJCX tokens for conversion, and announced a deadline of October 2017 to convert SJCX to STORJ token. We extended the deadline to accommodate requests for conversion. Ultimately, we saw no material conversions in Q2, Q3, and Q4 of ‘19. So, as previously reported, we deprecated the converter on January 1, 2020, and returned the remaining tokens to the operational reserve. 

Operating Supply 

We track the operating supply of STORJ tokens (lines 8-17). These tokens are held by Storj Labs, Inc. or Storj Labs International SEZC and are intended to be used for operations as described below. 

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 Coinmarketcap. 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 9). 

Line 10 is to report any repurchases of STORJ from the open market. 

In addition to Node Operator payments, we make payments to certain service providers (e.g., community leaders who monitor our various forums, respond to questions from users, and perform other community-related tasks; bug bounty participants; consultants; contractors) in STORJ token (line 11). 

Line 12 is for any SJCX conversion made outside of the token converter referred to above. 

We have a quarterly bonus program for Storj Labs team employees based on company milestones defined by management. We also have a voluntary program to allow employees to take a portion of their salary in STORJ token. Finally, we have various spot bonus programs from time to time. We track all of these programs in line 13, along with payments to international team members engaged through employers of record. 

Line 14, “Other,” is reserved to report activity that doesn’t fall into any of the other categories, including, for example, non-routine payments to service providers.

Line 15 is to report a decision to transfer STORJ from Long Term Lockup to Operating Supply. 

Line 16 is to report any transfer of STORJ from Reserved for SJCX Conversion to Operating Supply.

Totals

Line 18 is the non-circulating supply of STORJ, which is the number of tokens in Storj’s custody.

Line 19 is the total circulating supply of STORJ tokens, which is the number of tokens not in Storj’s custody. 

The maximum total that can be in circulation is 425.0 M (line 20).

CONFIRMATION

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

If you have questions, clarifications, or suggestions on how we can better present this information in the future, please let us know!


*In prior Token Reports we have used numbers to label the time locked tranches but are switching to letters to make it easier to track the tranches if any particular tranche is not relocked  As reported in the quarterly token reports from 2020, Tranche G was not relocked, and therefore the number of tranches has been reduced from 8 to 7.

DISCLAIMER

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

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. 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 token, and are 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 the 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.


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