From passive yield, to governance and interoperability, to driving Web3 – SPF have an exciting future on our network
You may have heard a lot about ScPrimefunds (SPF), but what are they, and why do they exist?
The ScPrime blockchain is a dual-token network. ScPrimecoins (SCP) are a utility coin facilitating smart contracts on the renter-host protocol, while a passive yield token called ScPrimefunds (SPF) “exist as equity in the network and earn a percentage of every transaction between clients and providers. The purpose is to provide a long-term revenue stream for development and possibly as another pool for incentives.” [From Whitepaper]
These SPF were designed to enable long-term monetization of the network. Out of every storage contract formed, a 10% “tax” on the whole value of the contract is paid across the population of 200M SPF – these figures and addresses can be found on the ScPrime Project Specifications page. The whole value of the contract represents renter ‘allowance’ and ‘bandwidth’, as well as host ‘collateral’ contributions; this comes out to roughly double the ‘price’ of the contract. Thus, it is typically thought of instead as a 20% fee on the typical $4/TB/mo contract price. The SPF fee is paid in full by the renter, which at the blockchain level today is Xa Net Services (operated by SCP, Corp.). The storage providers’ earnings are not affected by the SPF fee, and the price is factored in to Xa Net Services’ rates.
Approximately 60% of the supply is held by SCP, Corp with the remainder distributed to early investors and project stakeholders. The SPF represent an asset whose earnings are directly tied to the earnings of the network. The more SCP coins are entering storage smart contracts, the more SCP they yield. This incentivizes meaningful growth and use of the network, and represents an ability to gain an indefinite stake in network revenue.
SPF play an important role in the evolution to Web3. Presently Xa Net Services perform all the on-chain contracting enabling Relayers to directly access and store data across thousands of independent storage nodes. To achieve full Web3 independence, all that is required is for blockchain contracting to be made available to Relayer users for individual use. With this in place, Relayer users (if they choose) can form and use their own contracts, supplying the SCP to feed their storage use. When this is achieved Xa Net Services will bring revenue through SPF yields and continue development, support, and marketing for these core software components. There is no planned timetable for this move as of 2022.
However SPF don’t just exist in the future; they have existed on our chain collecting their ‘claim’ for years. Since network use up to this point has been generally insignificant, each unit has yielded only a miniscule amount. At a blockchain level, owning SPF enables the wallet software to generate a claim from the SPF fee pool corresponding to the proportion of SPF owned and the period. There is no automatic dividend as the wallet containing SPF would have to be online and active (“hot”) with each claim triggering a new transaction, which goes against best security practices.
SPF are a special token to our network and have been considered for additional use beyond coin yield. Though driven by proof of work today, ScPrime intends to move to proof of stake in the future; SPF would be a likely candidate for the staking/governance token. To access larger liquidity pools and interoperability, SPF has also been considered on popular DeFi platforms like Solana or Avalanche.
SPF are a unique token in the blockchain space and play a key piece in the future of our ecosystem. For additional background, check out the September 29th Storage Provider Meetup where SPFs were discussed at length. Our Whitepaper is also a good resource, but note that specifics on supply and earnings are out of date and the aforementioned Project Specifications contains updated figures. For the technically inclined, our open source codebase is also free to audit.