Economic Model

The income sources of SatoshiNet are primarily divided into two parts: transaction packaging fees (network fees) and earnings from liquidity pool fund inflows and outflows. The SatoshiNet Foundation takes a commission from both income sources, starting at 20% in the early stages and gradually decreasing as the network develops.

1. Basic Assumptions

To better consider the revenue sources for both platform operators and liquidity pool participants, the following parameters are used:

  • Transaction packaging fee: Fixed at 10 satoshis per transaction.

  • Daily transaction volume:

    • Guidance period: Starting from zero and growing to 1,000 transactions per day, stabilizing the network and preparing for more projects to join.

    • Development period: Transaction volume grows from 1,000 to 100,000 transactions per day, with at least 10 active or large token projects joining.

    • Mature period: Transaction volume grows from 100,000 to 10 million transactions per day, with at least 100 active tokens traded.

    • Explosive period: Over 10 million transactions per day, with the most popular BTC ecosystem tokens being traded on SatoshiNet.

2. Mining Nodes

Mining nodes gain the right to mine by staking Pearl tokens.

  • Total network staking goal: 50,000,000 Pearl (33% of total assets).

  • Mining node requirements: The number of nodes required changes during each development phase.

  • Staking amount is temporarily set at 1 million Pearl tokens.

Mining Revenue by Phase:

  • Guidance Period: 3–5 nodes, no focus on economic profit.

  • Development Period: 10–100 nodes. With daily transactions under 100,000, if there are 100 nodes, each node will mine 72 blocks per day. With 10 transactions per block, each block earns 100 satoshis, yielding daily earnings of 7,200 satoshis, and yearly earnings of about 0.02628 BTC ($2,628 USD).

  • Mature Period: With 100 nodes, transaction volume increases by 10 times, resulting in annual earnings of $26,280 per node. At this stage, the required staking of Pearl might drop to 100,000 tokens.

  • Explosive Period: In the ideal scenario, with 10 million transactions per day and 1,000 mining nodes each staking 100,000 Pearl tokens, liquidity is largely locked within the nodes. If the transaction volume can reach 100 million, the staking amount may drop to 10,000 Pearls.

3. Liquidity Pools

The liquidity pool provides the inflow and outflow of funds for SatoshiNet. The SatoshiNet Foundation manages two pools (BTC and Pearl). The funds required for these pools vary in different stages (exact calculations are not available yet). The revenue from these pools is controlled by the foundation, which is responsible for establishing and managing them. If funds come from third parties, the profits will be distributed according to the pool’s fund share but will be subject to the foundation’s commission.

4. Revenue Distribution Model

Principles:

  • Those who provide services receive the profits.

  • The foundation takes a percentage of the revenue for ecosystem development. The revenue share varies across different periods.

    • Guidance Period: No commission taken.

    • Development Period: 20% commission.

    • Mature Period: 10% commission.

    • Explosive Period: 1–5% commission, with a minimum guarantee of 1%.

Liquidity Pool Participant Earnings

  • In the Explosive Period, with a daily transaction volume of 10 million transactions, 1% of the funds are expected to flow in and out of SatoshiNet. Funds entering the network are free of charge, but exiting the network incurs a service fee. The fixed service fee is 5,000 satoshis + 1% of the amount being withdrawn.

  • Assuming an average of 10,000 transactions per day, each worth 1,000 USD (100,000 satoshis), a withdrawal transaction will incur 5,000 satoshis of fixed service fees + 10,000 satoshis of fund fees, totaling 15,000 satoshis. This generates a daily cost of approximately 1.5 BTC.

  • At this stage, with a liquidity pool size of 1,000 BTC, the annual revenue could be 182.5 BTC ($18.2 million), with an annual yield of 18.2%. If a participant stakes $10,000, their annual earnings would be approximately $1,820.

Mining Node Earnings

  • Mining nodes must pay a portion of their earnings to the foundation, up to 20%. Additionally, regular mining nodes need to pay core nodes a data service fee, up to 10%.

  • The remaining earnings belong to the node operators themselves.

Explosive Period Example (10 million daily transactions and 1,000 nodes):

  • Revenue per node: 10,000 transactions per day × 10 satoshis per transaction = 100,000 satoshis/day.

  • Annual earnings per node: 100,000 satoshis/day × 365 = 0.365 BTC/year ($36,500).

    • Foundation share (5%) = $1,825.

    • Core node share (10%) = $3,650.

    • Node operator share (85%) = $31,625.

Node Costs:

  • In the mature period, staking 100,000 Pearl tokens might cost $100,000 USD.

  • Hardware and network costs per node are expected to be less than $3,000 per year.

Node ROI:

  • In the mature period, the return on investment for a mining node would be approximately 30%.

5. Dynamic Adjustment Mechanism

To balance platform earnings and participant attractiveness while adapting to market development, the following dynamic adjustments can be implemented:

  1. Foundation’s Revenue Share: Starting at 20%, gradually decreasing to a stable range of 1–5%.

  2. SatoshiNet Network Fee: Currently 10 satoshis, but it could decrease as BTC prices rise and transaction volumes increase. The fee may eventually drop to 1 satoshi per transaction.


Note: This is a proposal and should be reviewed and approved by the foundation before implementation.

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