[SIP-2]: Chain Pricing Addendum

SIP-2: SKALE Chain Pricing Addendum

Background

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. Over the last four (4) years, the SKALE Network has gone through a Mainnet launch, multiple mainnet upgrades with significant performance improvements and feature enhancements, and most importantly has become a home for hundreds of projects deployed and actively building on SKALE. In addition, SKALE Chain pricing which went into effect on January 1st of last year [2024]. SIP-1, the initiation of SKALE Chain Pricing, has been an overwhelming success bringing greater stability to the validators and greater sustainability to the long term network trajectory.

The Hub Model

As the network continues to grow with more going live every month, and more businesses choosing to build daily it’s important to recognize that part of this surge in growth is thanks to the SKALE Hub model. The Hub model enables any SKALE Chain to be used by more than just a single dApp. Hubs may be owned and operated by a single entity or DAO who then manages the other businesses and projects building OR it can be shared ownership by many companies or DAOs working together. A critical benefit of the hub model is that the price per dApp can be drastically reduced since the dApps on the chain can either split the compute equally or hubs can choose unique pricing models to fit their usage. The only requirement for hubs is that they adhere to the SKALE Network Pricing Model set by the SKALE DAO.

The idea of hub chains was born thanks to a combination of:

  • The current default SKAKLE Chain offers far more compute than individual projects need AND is far more powerful than the average Layer 1 or Layer 2 blockchain
  • Appchains do not cultivate community, hubs do! Hubs are also key for community growth and broader network interoperability
  • SKALE V2 [which went live in June of 2022] – enabled SKALE Chain to SKALE Chain communication allowing for bridging and connectivity between hub chains and app chains.

The SKALE Hubs – Calypso, Europa, Nebula, and Titan – now account for over 90% of the applications live on SKALE and ~62% of the compute (calculated by transactions over the last 30 days).

The community believes that the hubs will continue to grow in use and due to the want to work with the operators and the validators to continue to move closer to what is believed to be the true value of the decentralized block space and security available from these powerful SKALE Chains.

Proposal

As a reminder from prior forum posts and governance votes regarding SKALE Chain pricing, we are in the midst of transitioning from a loss leader model where chains are priced intentionally low in order to gain market share, to a net/neutral profitability model where the network pays for itself and becomes revenue positive (where we are now), to revenue value capture stage where revenue is optimized to increase value capture of the token economics. This value capture stage will optimize both for revenue in, but also network growth, which means pricing will still be fair and cost-effective to developers while also creating positive economics to token holders. Web3 models are not meant to be value extractive like Web2 models, but still need to produce economic value capture.

This proposal aims to take one more interim step forward in the process and raise the price of the current default SKALE Chain – which is called a Medium SKALE Chain and consumes ⅛ the resources of a SKALE Validator Supernode – from $3,600 per month in SKL to $7,200 per month, paid in SKL tokens.

This raise is still significantly lower than the 50% utilization rate of $46,000 per month in SKL, however is large enough to ensure that validators see their revenue double while also ensuring the value of a SKALE Chain is competitively priced with the recent and upcoming performance improvements being shared by the SKALE Network developers.

Technical Notes

  • All changes proposed above would occur on the SKALE Europa Hub
  • The changes would occur as a transaction within the existing Paymaster contracts
  • The changes would raise the cost of rent – unpaid and future SKALE Chain fees – to the cost of $7,200 in SKL per month
  • Existing chain owners will have the ability to pay in at the $3,600 price up to 24 months from the current month with the change in price date being April 1, 2025
  • Existing chains who have pre-paid at the current price are not required to pay in additional rent

Timeline

  • After sufficient community discussion targeted at ~7 days, the proposal will be put up for vote on the SKALE DAO
  • Upon approval, the proposed timeline would be to have this applied to the Mainnet Pricing system on April 1, 2025, marking March 31, 2025 as the last month to pay in at the $3,600 rate.
  • Starting April 1, 2025 all payments therein would be at the amount agreed upon by the community before the final vote; which is targeted at $7,200.

Summary

The changes being proposed are to ensure that the network continues to move toward a more sustainable future that works to ensure all existing constituents are in a position to succeed.

As per the governance rules of the SKALE Network, no changes will be implemented without the democratic decision of a SKALE DAO vote. We encourage everyone to scrutinize this proposal, ask questions, and engage in the discussion.

SKALE is a community run, community owned, open source public good. Thank you once again for being part of this exciting journey. We’re not just shaping the future of SKALE, but also influencing the future of decentralized technology at large as we push forward newer innovative decentralized business models.

Sincerely,
TheGreatAxios

About the SKALE OSS Dev Contributors

We are a committed group of developers that work on numerous parts of the SKALE project. We are a community of developers, core team developers, and other network constituents. Our goal is to push forward to initiatives of the SKALE project in a decentralized and community focused manner.

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