SIP 1: Addition of SKALE Chain Pricing

Overview

SKALE is an open source, community driven project with the goal of bringing the power of Ethereum to hundreds of millions, if not billions of people. This is a lofty goal that relies on the network’s ability to grow with sustainable economics. This proposal has met the requirements for the network by being posted on the SKALE Network open forum on the 28th of September in 2023, and has been open for comment and discussion since. The period for comment will close in relation to this vote. If this vote passes successfully, additional changes may be proposed on the forum and made once a subsequent successful vote has passed.

You can view the initial proposal and community discussions on the forum here as well as the technical requirements to provide guidance to validators and chain owners here. The information in these two links is what will be going into effect with any changes being outlined below in the Parameters section, as well as additional links out to code and process for payment that will be included into this vote.

Parameters

The following information will take precedence over anything in the two links above found in the forum.

1. Chain pricing will go live on Jan 1 of 2024. The first payments can be made on Jan 1 of 2024 with the first due date for payments being Feb 1 of 2024. The first payments will be available for withdrawal by validators on March 1 of 2024.
2. Chain pricing will be handled on the SKALE Europa Hub*.
3. Chain payments will be made in the $SKL token on the SKALE Europa Hub*.
4. Chain payments can be made in advance for up to two years which enables renters to lock in the price with a prepayment.
5. Chain pricing will start at value of $3,600 USD per SKALE Chain per month in $SKL
6. The first and last month's rent (paid during the first pay period) is due in the first month of chain service.
7. Chain pricing will increase to $46,000 USD per SKALE Chain per month in $SKL if the network hits 50% utilization but will not impact chains that have made pre-payments as their price is locked in.
8. Chain pricing will increase to $84,000 USD per SKALE Chain per month in $SKL if the network hits 70% utilization but will not impact chains that have made pre-payments as their price is locked in.
9. Utilization rates are based on the percentage of chains rented against the total amount of chains that could be created by the quantity of nodes in the network. As new nodes join the network, the utilization rate will drop, thus keeping the price per chain lower as long as the supply grows.
10. Network utilization is dynamic and can increase from more chains being purchased, nodes leaving the network or active state and can decrease from nodes being added to the network or chains choosing to leave the network
11. Network utilization can be defined as CA/NS where:

• C is the number of SKALE Chains live in the network
• A is the number of nodes in chain which is equals 16
• N is the number of active nodes in the network
• P is the number of available slots on the node which equals 8

12. Chain owners will have to pay for their first and last month by Feb 1 of 2024 or will fall out of compliance and will have a period of time to get in compliance before suffering consequences.
13. To further reiterate, SKALE Chains will be available to be prepaid for up to 24 months (2 years) at any time, instead of the originally proposed 12 months (1 year). Pre-paying multiple months would lock that chain in for the current price, even if the price of a SKALE Chain increases or decreases from either future governance voting or based on the utilization of the network as per the proposal.
14. Chain owners that fall out of compliance at any time by not paying for their chain in a timely fashion will be required to pay all monthly past due amounts plus the upcoming month to become compliant. Essentially there is a two month grace period to catch up in payments.
15. Chain renters that fall out of compliance will lose autonomy of their chain as ownership will transfer to the SKALE Network multi-signature wallet on the Ethereum Mainnet when three (3) consecutive months of chain fees go unpaid. As a last resort of “no payment” the chain’s final month of rent will be utilized to support the transfer of state and assets from that chain to the SKALE collective community chain to protect end user assets from chain default.
16. All SKALE Chain payments will go 100% to validators for the first six (6) months of pricing being active. With the first claims not occurring until the second month after payments can be made, the 100% of the payments will go to validators until at least August 1 of 2024. At that time, the community should vote on whether payments continue to go entirely to validators or get split and diversified into other areas of the network.
17. The smart contracts for facilitating SKALE Chain payments can be found here: https://github.com/skalenetwork/paymaster
18. The ability for dApps to pay will be added into the SKALE Portal here: https://github.com/skalenetwork/portal

• Official SKALE Europa Hub name is elated-tan-skat

Conclusion

The SKALE Network is uniquely positioned to provide not just the incredible developer and consumer experiences that it already does, but also pioneer a path towards blockchain sustainability in the industry. The large SKALE community has worked long and hard on getting to this point through years of engineering, design, and collaboration to create a network that is beneficial to every party involved. SKALE Chain pricing should position the network to even new heights by creating an environment that continues to attract top validator operators to run the network in a sustainable manner without sacrificing the well known zero gas fee model. Show your support for the continued growth and evolution of the SKALE Ecosystem as it moves into its “Phase 2” by voting yes on this proposal!

About me and my process

Most of you in the community know me as the Lead Community Developer for the Calypso Hub. I also spend a considerable amount of time helping projects in the SKALE ecosystem, building open source tools for the ecosystem, speaking about SKALE at events, and holding developer workshops as an independent SKALE developer. In addition, I consult and work with a number of entities in the SKALEverse on a contract basis including some key projects within SKALE and the core team. I was asked by a number of stakeholders within the SKALE ecosystem to support and work with the various constituents of the network in an effort to bring SKALE Chain pricing and payments to life through the official governance process of the SKALE Network. This proposal took many months of discussion, research, and design with many parties throughout the ecosystem to get to where we are today. I started by taking the original ideas proposed in the early phases of the SKALE Network which offered a possible vision on how chain pricing could look. I then iterated through researching various economic components that are common throughout blockchain networks such as gas prices, throughput of chains, uptime, scalability, etc and from there combined it with the validator setup and generally estimated costs from discussions with validators. I then spoke with many different constituents within the SKALE community including validators, delegators, builders, core team members, dApp developers, and chain owners. While the final proposal has changed greatly from where it started many months ago, this proposal reflects what most have considered a “strong starting point” for SKALE Chain pricing and payments to begin while still leaving plenty of opportunity and flexibility on the table for the community to work together to create a sustainable blockchain network in SKALE.

– TheGreatAxios