ScPrime is building out a cloud storage network for their upcoming product, Xa. Customers seeking affordable data storage will purchase from SCP, Corp using traditional payment rails; credit card, purchase order, etc. This will trigger an instance of the core infrastructure product as described in the whitepaper, the Relayer, where coins are locked into smart contracts with a global storage provider network. These transactions are facilitated by the network’s own currency, ScPrimeCoin (exchange ticker ‘SCP’). ScPrimeCoin is also used in an incentive program for storage providers to maximize performance, capacity and growth of the ScPrime network.
Today, SCP’s circulating supply is 30,629,693 SCP. The total supply is 37,313,304 SCP. The ScPrime blockchain uses the Blake2b Proof of Work hashing algorithm for consensus. An all ASIC network powers the creation of new blocks.
When the ScPrime blockchain was brought to life, the genesis block created a ‘pre-mine’ of SCP for various purposes;
- 300,000 SCP to Nebulous, Inc for the original development of Sia, the project ScPrime forked from
- 51,840 SCP to mining pool operators to assist with maturity payout
- 200,000 SCP for initial project expenses
- 1,750,000 SCP for the storage provider incentive program
- 628,000 SCP for exchange listing fees
- 7,622,000 SCP earmarked for an ‘air drop’ to SC (Siacoin) holders
The airdrop was a 1:5 ratio for SC holders (every 5 SC held, 1 SCP would be dropped). Upon examination of the the entire Siacoin address database, it was discovered that 60% of the of the coin’s supply was held in what appeared to be centralized exchange wallets belonging to Binance, Bittrex, Upbit, among others. After receiving no guarantee from these exchanges that any of the airdropped SCP would be delivered to their customers, a decision was made to move the funds into a cold wallet. These 4,525,377 SCP are now marked towards the building and improvement of the ScPrime network through Storage Provider incentives. The process for this is targeted for mid 2021 to become an automated feature tied directly to smart contracting. It is possible this could also be tied to a change in the consensus mechanism.
Supply Precision Change
In February 2020, SCP’s supply went through a precision change, or to be more precise, a change to how the precision is represented to wallet and exchange users. It involved the moving of the decimal 3 places to the left, so that the total supply is in millions, not billions. Technically, the supply of SCP didn’t change, only the representation of it. Visually, transactions on the ScPrime network are seen in SCP, but they actually occur in hastings, which is the smallest unit of a ScPrimeCoin (24 digits or 10²⁷ pre change,10²⁴ post change). The smart contracts that the network uses requires very small transactions amounts because they are calculated as Hastings per Byte per block. The adjustment just changed this representation of a single SCP for every place it is used.
For example, if you had 20,000,000 SCP pre supply change, you would have 20,000 SCP post supply change. This made the supply more manageable, in addition to making SCP more attractive to exchanges, and to facilitate listings on sites such as CoinMarketCap and Coin Gecko. It was possible because at the time, the coin only traded on a single exchange (SouthXchange), who’s team worked with us to dump the book and reset so that no value was lost.
It’s important to understand that this adjustment did not change the valuation of the currency at all. SCP was not devalued. The emission remained consistent and the only change was the moving of the decimal 3 places, which in hindsight helped the project immensely.
Starting with the genesis block, 300 SCP was emitted to miners solving the cryptographic riddle. This emission decreases 0.001 SCP per block until it reaches 10 SCP. This will happen on block 290,000.
To understand how the reward diminishes, we can take the current block number and multiply it by 0.001 and then subtracting that number from 300, we will find the current block reward.
Block 290,000 will be reached in approximately 3.5 years. This can be inferred by taking the blockchain’s 10 minute block time and doing some math.
At block 290,000, the SCP supply will hit it’s estimated ceiling of about 55,000,000 with a very low rate of inflation into perpetuity.
Another emission, a development fee, starting at 20% of the block reward and on a declining schedule, was set aside to cover development costs. This fee, upon reaching 10% at block 105,000 is sent to an unspendable ‘burn’ address to reduce inflation/supply for the duration of the project (reference).
A difficulty adjustment monitors the amount of hashrate mining on the blockchain and changes how hard the calculation is to find a block, a small amount each block, until equilibrium is re-found. This is to prevent certain kinds of attacks based on large amounts of incoming hashrate and also to keep blocks at roughly 600 seconds apart (10 minutes) This algorithm adjusts difficulty every block based on the amount of ASIC’s that are currently mining.
Coin velocity is a concern for all utility coin-based projects, where coins have no intrinsic investment value and act simply as tokens to acquire something. For a coin to maintain and increase value over a long period of time, there must be a reason, mechanic, or incentive for individuals and clients to hold or lock up the currency for an extended period. Something that can slow down a coin’s velocity is called a ‘velocity sink’.
ScPrime has two organic velocity sinks that, as the network continues to grow, along with a functioning product, will see SCP’s coin velocity slow and value increase. These sinks are allowances and collateral.
The primary transaction on the ScPrime network is in smart contracts between SCP, Corp and storage providers around the globe combining to form The Distributed Datacenter or cloud infrastructure. End customers purchase storage space from SCP, Corp via traditional methods, while the company purchases utility coins for use in contracts. At the start of a smart contract, an allowance is locked up. This allowance is a “budget” that mirrors the amount of storage required by the end customer. Upon completion of the contract, the allowance is unlocked and paid to the provider.
As the network continues to scale, these locked up coins are not insubstantial. The current price of renting on the ScPrime network is roughly 36 SCP per TB/month. Redundancy on the network will be dynamic and tailored to individual customer needs, but runs from 1.5x and up to provide higher levels of durability than traditional cloud providers. Now, fast forward a year or two where Xa (ScPrime’s product) has been taking on customer’s data regularly and network usage is at 100PB. Using some simple math below, we see that 10.8 million SCP would be locked up for anywhere from 1.5 to 3 months (average contract lengths) in renter allowances the following assume.
Storage providers take the other side of contracts and are required to put up collateral on a 1:1 for basis to ensure they store data as contracted, verified via random proof generation. If a provider fails to provide proof that the data is available as the contract ends, they forfeit the locked up collateral.
Based on current guidelines, Providers lock up 34 SCP per TB per month on average. Using the future example of 100 PB stored, we can see another 3.4 million SCP locked up for the duration of the contract periods (and beyond with contract renewals).
Allowances and collateral are two very potent velocity sinks that will keep SCP’s velocity low. A utility currency with double digit lockups is likely to encourage greater speculation with traders expecting scarcity to drive coin values higher. Of course the above was just an example and provider pricing will fluctuate based on SCP value, market conditions, competition, etc., but the idea of locking up a substantial stake of the supply as a natural side effect of the product, is accurate and will benefit the project as it grows.
Project Cold Wallets
While the current circulating supply of SCP is just over 31,000,000, the total supply is closer to 37,000,000. At present, ScPrime holds 6,625,578 SCP in various cold wallets. These wallets hold 17.5% of the current supply. Planned use of these funds will mainly be for Storage Provider incentives. Cold wallet’s stake on the total supply will continue to lessen and by year five, will account for less then 9% of SCP’s total supply.