TLDR;
This proposal (which aims to be SIP-3) is for a new type of SKALE Chain: the Performance SKALE Chain which would consume less resources compared to a Hub Chain and therefore cost less within the SKALE Network. I also propose some unique economic properties that I believe will help these chains be better suited to thrive within the world of decentralized networks.
Background
Over a year ago, the SKALE DAO passed SIP-1, establishing the foundation for Chain Pricing. This critical first step laid the groundwork for transitioning the network’s economics from inflation-based validator rewards to a model driven primarily by chain fees. That model allows validators and in the near future delegators to be compensated sustainably, while enabling dApps to run without charging end-users gas fees—a core differentiator that positions SKALE to continue to bring the world onchain. More recently, the SKALE DAO passed SIP-2, doubling the active price of the SKALE Hub Chain from $3,600 USD per month paid in SKL to $7,200 USD per month paid in SKL.
With more blockchains being created all the time, and more and more projects, teams, and enterprises interested in their on SKALE Chains; it feels like like the appropriate time to introduce a new SKALE Improvement Proposal (currently proposed to be SIP-3 with no other active proposals from the community).
Proposal
The proposed configuration for a Performance SKALE Chain would be to consume 1/32 of a SKALE Supernode compared to a SKALE Hub which consumes ⅛ of a SKALE Supernode. Offering a smaller and more cost-effective option for dApp developers who want their own dedicated blockchain at a more attainable price point for a singular application or business; these chains will still benefit from SKALE’s shared security model and decentralized validator set, but with lower resource consumption and pricing to match their target buyer.
The original design of the network called for three types of SKALE Chains, labeled as follows:
- Small Chain which consumed 1/128th of a Supernode
- Medium Chain which consumed 1/8th of a Supernode
- Large Chain which consumed 1/1 of a Supernode
As part of this proposal, with all SKALE Chain types growing more powerful with all of the major network upgrades; the community proposes the following naming structure for the two active chain types in the network pending this proposal:
- The Performance Chain which would consume 1/32nd of a Supernode
- Hub Chain which would consume 1/8th of a Supernode
I also propose to change the naming conventions of the existing chain sizes: The small, medium, and large verbiage would be dropped entirely from documentation and usage in order to better communicate the roles of the different chains within the ecosystem.
The last portion of this proposal is exploring the economic design of a Performance SKALE Chain. The SKALE Hub Chains: Calypso, Europa, Nebula, and Titan have proven to be the cornerstones of the SKALE Network and even with recent SIP-2 remain heavily discounted from their long-term target price as the network continues to grow. Per SKALE Improvement Proposal #1, which brought SKALE Chain Pricing into Phase 2, there is a flat fee on SKALE Hubs that can be incrementally increased on the way toward the long-term dynamic pricing curve.
After discussion with a number of developers, potential SKALE Chain owners, as well as the SKALE Team; we would like to propose a static pricing model for performance chains. Performance chains would have the following:
Design
- A starting price of $7,200 USD per month paid in SKL.
- There would be no dynamic curve or longer term price target. This price point is the target price for this chain which is not discounted like the hub chains. Performance Chains and Hub Chains would be priced independently from each other and the SIP-1 price curve would only be utilized for hub chains.
- Performance chains could be increased by up to 8% in price yearly through subsequent governance votes to ensure that chains remain competitive in pricing with macro changes such as inflation. This proposed soft limit is added to ensure that real businesses can build sustainable applications and operating models on SKALE without being priced out from large fluctuations.
- In order to remain competitive with other blockchain networks who don’t have public pricing from our research, Performance Chain pricing could also be reduced at any time by any amount.
Lastly, from a technical perspective the core design of chain pricing would follow and inherit much from SIP-1. The technical proposal is defined below:
- Performance chain pricing will be priced in USD, but paid in the equivalent amount of SKL tokens
- Similar to hub pricing, Performance Chain fees would go 100% to validators for the foreseeable future. This can be changed with a subsequent governance vote.
- Any chain fees paid regardless of who the receiver(s) are, would not be available until the second month of activation
- Performance Chains could be prepaid up to 24 months (2 years) at any given period. This amount could be increased in a separate proposal and vote. This allows chains who prepay to be considered fully paid if a chain fee increase were to occur
- Chains that fall out of compliance by not paying will be required to pay all the monthly past due months (at the active fee amount) plus the upcoming month inorder to restore compliance.
- If a chain is not paid for three (3) consecutive months per SIP-1, the same actions would occur with chain deletion.
- For the actual payments, the Performance Chains would utilize the SKALE Paymaster on the SKALE Europa Hub – which has an official sChain name of elated-tan-skat – pending further discussion and technical exploration with the SKALE Engineering team, a second SKALE Paymaster would be created for Performance Chains
Conclusion
The goal of this proposal is to enable SKALE Chains to be more competitive within the broader “Chain Buyer” market while also increasing the sustainability of companies looking to make SKALE their home long term.
Please share any thoughts, questions, comments, or concerns as we work to explore this together.
Thank you,
TheGreatAxios