💹Nodes Incentives/Rewards

Flostream Nodes

In our refined operational model, both users and application developers will be required to stake tokens to access enhanced bandwidth for specific content. This staking system is designed to allocate resources more efficiently within our network. As part of this arrangement, a portion of the staked tokens will be methodically distributed to storage nodes in recognition of their role in providing bandwidth to the protocol.

Here's a chart illustrating the relationship between the number of nodes run, the bandwidth created, and the rewards received within a network like Flostream:

• Bandwidth Created (in blue) shows a direct correlation with the number of nodes run. As you run more nodes, the bandwidth created by the network increases accordingly.

• Rewards Received (in green) also escalate as the bandwidth created by these nodes increases. This trend indicates that operating more nodes not only contributes to the network's overall bandwidth but also leads to receiving higher rewards

This visualization demonstrates the incentivizing structure of the network, where running more nodes not only enhances the network's capacity but also proportionally increases the rewards for the participants.

We anticipate a progressive reduction in storage costs, potentially reaching near-zero levels over time, due to technological advancements and economies of scale. In contrast, the cost of bandwidth is expected to remain relatively stable.

• Storage Costs (Blue solid line) show a progressive reduction over time, reflecting the anticipated decrease due to technological advancements and economies of scale. The costs are expected to approach near-zero levels eventually.

• Bandwidth Costs (Red dashed line) are represented as remaining relatively stable throughout the years, in line with the expectation that the cost of bandwidth will not fluctuate significantly.

Flosteam Token Rewards

The team has developed a token reward mechanism, and we are committed to continuously refining and enhancing this model.

In this model, Flostream rewards nodes for storage and bandwidth, with a focus on the higher compensation for bandwidth and the decreasing costs of storage over time.

1. Storage Reward Mechanism:

   • Storage Capacity Contribution: Nodes in the Flostream network allocate a portion of their disk space for data storage. The size of this space directly influences the potential rewards.

   • Decreasing Cost of Storage: Technological advancements have led to a decrease in the cost per gigabyte of storage. This trend is reflected in the rewards system, where the compensation for storage adjusts downward over time.

   • Reward Calculation: Storage rewards are typically calculated based on the amount of data stored, the duration of storage, and the prevailing market rate for storage.

2. Bandwidth Reward Mechanism:

   • Network Throughput: Nodes contribute to the network's bandwidth by relaying data. This requires a robust and stable internet connection with high throughput.

   • Higher Operational Costs: Bandwidth involves real-time data transmission, which incurs higher operational costs compared to static storage. This is due to factors like energy consumption and network infrastructure.

   • Reward Calculation: Bandwidth rewards are often calculated based on the amount of data transmitted, the speed of transmission, and network demand.

3. Dynamic Reward Adjustment:

   • Algorithmic Adjustments: Flostream may employ algorithms that dynamically adjust the reward rates for storage and bandwidth. These adjustments are based on current network demand, available resources, and the cost of maintaining infrastructure.

   • Market Influences: External market factors, like the cost of hardware and internet services, also play a role in determining reward rates.

4. Token-Based Compensation:

   • Use of Flostream Tokens: Rewards are distributed in Flostream tokens. The value of these tokens against fiat currencies can vary, adding a layer of complexity to the reward system.

   • Token Economics: The supply, demand, and circulation of Flostream tokens within and outside the network can impact their value and, by extension, the actual compensation received by nodes.

5. Technical Implementation:

   • Smart Contracts: For automation and transparency, Flostream might use smart contracts to manage the distribution of rewards. These contracts execute predefined conditions for storage and bandwidth contributions.

   • Network Monitoring Tools: Continuous monitoring of node performance and resource contribution is essential. This involves tracking storage space utilization, data transfer speeds, and online availability.

By integrating these technical elements, Flostream's reward system aims to maintain an efficient balance between incentivizing node operators and ensuring the economic viability of the network. This technical approach underpins the network's sustainability and adaptability in a rapidly evolving digital landscape.

Moreover, should the global utilization of our protocol exceed the threshold of a 4% annual inflation rate, a redistribution mechanism will be activated. This involves reallocating tokens from the staked amounts to the nodes that are actively supplying bandwidth, ensuring a fair and balanced distribution of resources and incentives within our network.

• S(t) as the total number of staked tokens at time t.

• P(t) as the total payout to storage nodes at time t.

• U(t) as the global usage of the protocol at time t.

• I as the annual inflation rate (4% in this case).

The differential equation for the payout to storage nodes, P(t), based on the staked tokens, S(t), and assuming a constant rate of payout, can be represented as:

$$\frac{dP}{dt} = k \cdot S(t)$$

where k is a constant representing the rate at which the staked tokens are paid out.

For the global usage affecting the staked tokens, assuming that when U(t) exceeds 4%, there's a redistribution from staked tokens to storage nodes, the differential equation could be:

$$\frac{dS}{dt} = -\alpha \cdot S(t)$$

only when U(t) > I, where α is a constant representing the rate of redistribution.

(These equations are simplified representations and assume constant rates. In reality, these rates could be functions of time or other variables, depending on the specific details of the protocol's economic model.)