Daybreak: Restore Equal Sector Quality and Burn Mining Reserve #1238

Reiers · 2026-02-27T18:48:17Z

Reiers
Feb 27, 2026

FIP-XXXX: Daybreak — Restore Equal Sector Quality and Burn Mining Reserve

Simple Summary

Gradually reduce the Verified Deal Weight Multiplier (VDWM) from 10× to 1× over 12 months, so all sectors earn equal rewards regardless of deal type. Simultaneously, burn the ~283M FIL mining reserve by transferring it to the burn address f099.

Abstract

FIP-0003 (Filecoin Plus, 2020) introduced a 10× quality-adjusted power (QAP) multiplier for sectors containing verified deals. After five years of operation, the program's outcomes have diverged significantly from its intended goals: Raw Byte Power (RBP) peaked at ~17 EiB in mid-2022 and has since declined to 2.17 EiB; independent community analyses estimate that a substantial portion of verified data may not be retrievable; and a permissioned notary layer has become a gatekeeper for block reward distribution.

This FIP proposes two changes:

Reduce VERIFIED_DEAL_WEIGHT_MULTIPLIER from 10× to 1× over a 12-month linear transition. After the transition, all sectors — committed capacity (CC), regular deals, and verified deals — earn equal quality-adjusted power per raw byte.
Burn the mining reserve (~283M FIL as of epoch 5,796,404) by transferring the balance of the reserve actor f090 to the burn address f099.

These changes remove two sources of centralized influence — notary-gated reward distribution and a discretionary token reserve — while preserving or improving storage provider economics. Total block reward issuance is mathematically unchanged.

Change Motivation

Background: Five Years of Debate

The question of whether the 10× quality multiplier helps or harms Filecoin is not new. This FIP builds on years of community analysis and prior proposals:

Date	Event	Status
Oct 2020	FIP-0003 introduces Fil+ and the 10× VDWM	Active
Apr 2022	FIP-0036 (Sector Duration Multiplier) proposes alternative incentive mechanism	Rejected — 1,000+ comments, strong SP opposition
Jan 2023	FIP-0056 (SDM v2) attempts to revive duration-based multiplier	Rejected — same opposition
Aug 2023	FIP-0080 (Phasing Out Fil+) proposes setting VDWM to 1× for new sectors	Draft — 358+ comments, 2.5 years without advancing
Oct 2023	FIP-0078 (Remove DataCap and QA) proposes phasing out the Fil+ program entirely	Draft — stalled
Jul 2024	FIP-0093 (Set Mining Reserve to Zero) proposes burning the reserve	Draft — ~20 months stalled despite editor approval
Feb 2026	This FIP provides quantitative analysis, transition mechanism, formal security proofs, and gas benchmarking	—

The prior proposals (particularly FIP-0080) identified the correct problems and proposed the right direction. What they lacked — and what this FIP provides — is the quantitative economic foundation to move from discussion to action: a simulation validated against the protocol specification, gas impact analysis against the builtin-actors source code, a formal security analysis covering five attack vectors, and a fully specified transition mechanism.

This FIP is intended to complement and build upon the work of FIP-0080's authors (Fatman13, ArthurWang1255, stuberman, Eliovp, dcasem, The-Wayvy) and FIP-0093's author (dcasem), whose community advocacy over multiple years laid the groundwork for this proposal.

The 10× multiplier does not increase total block rewards

This is the foundational economic fact.

The Filecoin minting model (defined in the Block Reward Minting section of the protocol specification) has two components:

Simple minting: $M_S(t) = M_\infty^S \cdot (1 - e^{-\lambda t})$ — a function of elapsed time only.
Baseline minting: $M_B(t) = M_\infty^B \cdot (1 - e^{-\lambda \theta(t)})$ — where effective network time $\theta(t)$ depends on cumulative capped raw-byte power.

The critical definition from the spec:

$\bar{R}(t) := \min{b(t), R(t)}$ where $R(t)$ is "the instantaneous network raw-byte power (the total amount of bytes among all active sectors)."

$R(t)$ is the sum of physical sector sizes. It is unaffected by quality multipliers. Changing the VDWM from 10 to 1 leaves $R(t)$ unchanged → $\bar{R}_\Sigma(t)$ unchanged → $\theta(t)$ unchanged → total minted supply $M(t) = M_S(t) + M_B(t)$ unchanged.

The 10× multiplier is a pure redistribution mechanism. It does not grow the reward pool — it transfers rewards from CC sectors to Fil+ sectors through inflated QAP.

Simulation confirms identical issuance

This result was validated analytically and by numerical simulation. The simulation models 12 scenarios across 10-year forward projections from the current network state.

Source code: github.com/Reiers/fip-daybreak/sim (CUDA C++)
Hardware: NVIDIA RTX 5080 (Blackwell) and Quadro RTX 6000 (Turing) GPUs
Methodology: Computed cumulative capped RBP from genesis using 10 historical data points, derived $\theta(t)$ per spec formula, projected forward under each scenario. Pledge uses FIP-0081 formula (NV24).
Full dataset: 12 scenarios × 3,650 daily data points + 210-parameter sweep + 4 pledge projections = 59,450 data points

Chain state at epoch 5,796,404 (source: filfox.info/api/v1/overview):

Parameter	Value	Source
Raw Byte Power (RBP)	2.17 EiB	Filfox API: `totalRawBytePower`
Quality-Adjusted Power (QAP)	18.5 EiB	Filfox API: `totalQualityAdjPower`
QAP / RBP ratio	8.51×	Derived
Circulating Supply	832.5M FIL	Filfox API: `circulatingSupply`
Daily Mined	66,249 FIL	Filfox API: `dailyCoinsMined`
Baseline (computed)	~114.5 EiB	$b_0 \cdot e^{g \cdot t}$, $b_0$ = 2,888,888,880,000,000,000 bytes
Active Miners	923	Filfox API: `activeMiners`
Mining Reserve (f090)	282.9M FIL	Filfox API: address balance

Key result — daily issuance is invariant to VDWM:

Scenario	VDWM	At Year 1	At Year 5	At Year 10
Status Quo	10×	61,883 FIL/day	39,400 FIL/day	22,860 FIL/day
This FIP	1×	61,883 FIL/day	39,400 FIL/day	22,860 FIL/day

Identical to 8 significant figures across the full 10-year projection. Not one additional FIL is minted or withheld by this change.

Per-sector economics improve substantially

With VDWM=10, a CC sector competes against Fil+ sectors holding 10× its apparent power. When the multiplier is removed, the same physical storage earns a proportionally larger share of the unchanged reward pool.

Per 32 GiB CC sector at epoch 5,796,404:

Pledge uses the FIP-0081 formula (deployed NV24, Nov 2024): $ConsensusPledge = (1-\gamma) \times SimplePledge + \gamma \times BaselinePledge$ where $\gamma = 0.7$ (fully ramped as of ~Nov 2025).

Metric	Current (VDWM=10)	After Daybreak (VDWM=1)	Change
Daily reward	0.000107 FIL	0.000910 FIL	+8.5×
Storage pledge (20 days)	0.00213 FIL	0.01820 FIL	+8.5×
Consensus pledge (simple, 30%)	0.1207 FIL	1.029 FIL	+8.5×
Consensus pledge (baseline, 70%)	0.0455 FIL	0.0455 FIL	unchanged
Total initial pledge	0.169 FIL	1.093 FIL	+6.5×
Annual ROI on pledge	~23%	~30%	+1.3×

Under FIP-0081, the consensus pledge Simple component scales with the sector's share of NetworkQAP — when the multiplier is removed, NetworkQAP drops from 18.5 EiB to 2.17 EiB, so each sector's share (and thus its Simple pledge) increases proportionally to its reward increase. The Baseline component is unchanged because $\max(Baseline, QAP)$ evaluates to the baseline in both cases (114.5 EiB >> 18.5 EiB >> 2.17 EiB).

Net effect: Revenue per unit of physical storage increases 8.5×. Pledge also increases (driven by the Simple component), but ROI on pledged capital still improves from ~23% to ~30%. The barrier to entry remains dramatically lower in absolute terms — a CC sector becomes immediately profitable without requiring datacap relationships.

The baseline gap is now structural

The baseline function grows at 100% per year from an initial value of ~2.5 EiB. The network exceeded the baseline from April 2021 through early 2023 — at peak (August 2022), RBP reached ~17 EiB against a baseline of ~10 EiB. During this period, baseline minting operated at full rate.

Since mid-2023, RBP has fallen far below the baseline and the gap widens exponentially:

Metric	Value
Current baseline	~114.5 EiB
Current RBP	2.17 EiB (1.9% of baseline)
Historical peak RBP	~17 EiB (August 2022)
Effective network time $\theta$	~3.34 years (vs 5.5 years actual)
Baseline minted (of 770M allocation)	~246M FIL (32%)
Baseline rewards currently deferred	~524M FIL (68%)

The baseline now stands at ~114.5 EiB — nearly 7× the historical peak RBP and 53× the current RBP. Even aggressive growth scenarios cannot close this gap. The 10× multiplier was intended to help the network approach the baseline by incentivizing data storage, but the multiplier inflates QAP — and baseline minting depends on RBP.

Our simulation tested baseline growth rates from 0% to 100%/year. Under FIP-0081, the Baseline pledge component (70% weight) uses $\max(Baseline, QAP)$ as its denominator — slowing baseline growth shrinks this denominator and increases that component. However, at current network state, the Simple component (~97% of total consensus pledge) dominates, making baseline growth rate a second-order effect. We propose leaving the baseline growth rate unchanged.

Fil+ outcomes have diverged from intent

FIP-0003 was designed to "incentivize useful storage" via a quality multiplier for verified data. After five years of operation:

RBP has declined, not increased — from a peak of ~17 EiB (August 2022) to 2.17 EiB today.
Independent community analyses report significant concerns about data retrievability for Fil+ sectors (see Discussion #774 and linked audit reports).
A permissioned notary layer determines which storage providers earn enhanced rewards, creating centralization pressure that is in tension with Filecoin's stated mission of decentralization.
Block rewards per TiB have declined significantly after Fil+ adoption, as the subsidy creates a competitive dynamic where "when everyone gets 10×, nobody does."
Storage economics have inverted — storage providers in some cases pay clients to store data, rather than the other way around.

These outcomes are well-documented in the 358-comment discussion on FIP-0080 (Discussion #774). This FIP does not seek to assign blame — the Fil+ program was a reasonable experiment that did not produce the intended results. The economic data now provides a clear basis for course correction.

Mining reserve has no distribution mechanism

The mining reserve was allocated 300M FIL at genesis (15% of FIL_BASE) as a reserve "for funding mining to support growth of the Filecoin Economy, whose future usage will be decided by the Filecoin community."

The current balance of f090 is ~282.9M FIL (some tokens were transferred in early network operations). After 5+ years, no mechanism for distribution has been ratified, and FIP-0093 has been in review for approximately 20 months.

Burning the reserve:

Permanently removes ~283M FIL of potential future supply inflation
Has zero effect on current circulating supply (the reserve is not circulating)
Has zero effect on daily block reward issuance (the reserve is separate from the storage mining allocation)
Provides a credible commitment to predictable monetary policy

Specification

1. VDWM Transition

Introduce new constants and a function in the storage miner actor (actors/miner/src/policy.rs in builtin-actors):

/// Epoch at which the VDWM transition begins (set to network upgrade activation epoch).
pub const VDWM_TRANSITION_START: ChainEpoch = UPGRADE_EPOCH; // set at deployment

/// Duration of the VDWM transition: 12 months = 365 days × 2,880 epochs/day = 1,051,200 epochs.
pub const VDWM_TRANSITION_DURATION: ChainEpoch = 1_051_200;

/// Target VDWM code value after transition (equals QUALITY_BASE_MULTIPLIER → effective 1×).
pub const VDWM_TRANSITION_TARGET: BigInt = BigInt::from(10);

Replace the static VERIFIED_DEAL_WEIGHT_MULTIPLIER constant with an epoch-aware function:

/// Returns the verified deal weight multiplier code value at the given epoch.
///
/// Context: In builtin-actors, quality multipliers are expressed as code values
/// that are divided by QUALITY_BASE_MULTIPLIER (10) to produce the effective ratio.
/// The current VERIFIED_DEAL_WEIGHT_MULTIPLIER is 100 (code value), giving an
/// effective ratio of 100/10 = 10×.
///
/// This function interpolates: 100 → 10 (code values) = 10× → 1× (effective).
///
/// Pre-transition:    returns 100  (effective 10×)
/// During transition: linearly interpolates from 100 to 10
/// Post-transition:   returns 10   (effective 1×, equal to QUALITY_BASE_MULTIPLIER)
pub fn verified_deal_weight_multiplier_at(epoch: ChainEpoch) -> BigInt {
    if epoch < VDWM_TRANSITION_START {
        return BigInt::from(100); // Original code value
    }
    let elapsed = epoch - VDWM_TRANSITION_START;
    if elapsed >= VDWM_TRANSITION_DURATION {
        return VDWM_TRANSITION_TARGET; // 10 (code value) = 1× effective
    }
    // Linear interpolation: 100 → 10 over the transition period.
    // multiplier = 100 - 90 × (elapsed / duration)
    // Using integer arithmetic to avoid floating point:
    let duration = BigInt::from(VDWM_TRANSITION_DURATION);
    let numer = BigInt::from(100) * &duration - BigInt::from(90) * BigInt::from(elapsed);
    std::cmp::max(numer / duration, BigInt::from(10))
}

Call sites to modify (in actors/miner/src/policy.rs):

// In quality_for_weight(): replace static constant with epoch-aware call.
// Before:
//   let weighted_verified = verified_weight * &*VERIFIED_DEAL_WEIGHT_MULTIPLIER;
// After:
let weighted_verified = verified_weight * verified_deal_weight_multiplier_at(epoch);

The epoch parameter must be threaded through from the activation, extension, or update context. The two primary call sites are:

quality_for_weight() — used during sector activation, extension, and replica update
qa_power_max() — used for maximum power calculations (use VDWM_TRANSITION_TARGET post-transition)

When quality is recalculated:

Sector activation (ProveCommitSectors3, ProveCommitSectorsNI): Uses verified_deal_weight_multiplier_at(activation_epoch).
Sector extension (ExtendSectorExpiration2): Recalculated using verified_deal_weight_multiplier_at(extension_epoch).
Replica update (ProveReplicaUpdates3): Recalculated using verified_deal_weight_multiplier_at(update_epoch).

Grandfathering: Existing sectors retain their original quality until they are extended, updated, or expire. No retroactive quality adjustment is applied. This approach was chosen because:

Zero additional gas (no CronTick changes, no sector iteration at migration).
Respects the economic terms under which existing sectors were committed.
All pre-transition sectors expire within 3.5 years (FIP-0052 max lifetime).

WindowPoSt: Unaffected. WindowPoSt proves existence of sealed data regardless of deal type and does not invoke quality_for_weight().

2. Mining Reserve Burn

At the upgrade epoch, execute a one-time transfer of the reserve actor's entire balance to the burn address:

// In system actor upgrade logic:
reserveActor := builtin.ReserveActorAddr  // f090
burnActor := builtin.BurntFundsActorAddr  // f099
balance := getActorBalance(reserveActor)  // ~282.9M FIL at time of writing
transferFunds(reserveActor, burnActor, balance)

After this transfer:

The tokens are permanently unspendable (same burn mechanism as gas fees).
No new governance mechanism is needed — the reserve simply ceases to exist.

3. FIP-0003 Quality Multiplier Sunset

Upon completion of the VDWM transition (12 months after activation), the quality multiplier mechanism introduced in FIP-0003 will no longer produce differential rewards between sector types. The Fil+ governance infrastructure (notaries, DataCap) may continue to serve application-layer verification and reputation purposes, but will no longer affect protocol-level block reward distribution.

Design Rationale

Why a 12-month linear transition?

Approach	Year 1 CC Reward	Year 1 Pledge (FIP-0081)	Year 1 ROI
Immediate (VDWM 10→1 at activation)	0.000910 FIL/day	1.093 FIL	~30%
12-month gradual (this FIP)	0.000910 FIL/day at completion	1.093 FIL at completion	~30% at completion
3-year gradual	0.000210 FIL/day at year 1	0.217 FIL	~25%

The 12-month transition achieves the same end-state as immediate removal while providing:

Time for storage providers to adjust operational strategies.
Gradual unwinding of Fil+-dependent business models.
Smooth power table transitions for consensus stability.

A 3-year transition unnecessarily extends the period of suboptimal economics.

Why not slow the baseline growth?

Counterintuitively, the growing baseline helps SP economics. Our simulation tested growth rates from 0% to 100%/year with VDWM=1:

Baseline Growth	Reward/TiB (Y5)	Pledge/32GiB (Y5, FIP-0081)	ROI (Y5)
0% (freeze)	0.01824 FIL	1.235 FIL	16.9%
50%/year	0.01824 FIL	1.190 FIL	17.5%
100%/year (current)	0.01824 FIL	1.184 FIL	17.6%

Rewards are identical across all growth rates (RBP << baseline in all cases). Under FIP-0081, pledge is dominated by the Simple component (~97% of consensus pledge at current network state), which depends on NetworkQAP rather than the baseline. The Baseline component varies with growth rate but contributes only ~3% of total consensus pledge. The growing baseline keeps this component from increasing.

Why combine VDWM reduction with mining reserve burn?

These two changes are economically independent (no formula contains both variables). Combining them:

Addresses the two most prominent community governance concerns — Discussion #774 (358 comments) and PR #1039 (~20 months stalled) — in one proposal.
Reduces the number of consensus upgrades needed.
Demonstrates that meaningful economic reform can be achieved with minimal protocol disruption.

Why grandfathering instead of retroactive adjustment?

Gas: Retroactively adjusting all sectors' quality would require updating the power table for every active sector across 923 miners — potentially millions of state updates exceeding block gas limits.
Fairness: Providers committed pledge under VDWM=10 rules. Retroactive changes would alter the economic terms under which those sectors were committed.
Bounded duration: All pre-transition sectors expire within 3.5 years (FIP-0052). The overlap is temporary and diminishing.

What makes this FIP different from prior proposals?

Aspect	FIP-0080 (2023)	This FIP
Economic analysis	Qualitative arguments	Quantitative simulation (59,450 data points, open source)
Security analysis	Brief qualitative section	Formal analysis of 5 attack vectors with quantitative bounds
Gas benchmarking	Not addressed	Full gas impact analysis (<0.01% overhead)
Code specification	"Set multiplier to 10"	Epoch-aware interpolation function with exact call sites
Transition mechanism	"Existing deals keep quality"	12-month linear interpolation with grandfathering
Mining reserve	Not addressed	Combined with reserve burn
Cross-FIP analysis	Not addressed	Verified compatibility with FIP-0081, 0086, 0098, 0100

This FIP is not a replacement for FIP-0080 — it is the quantitative completion of the work that FIP-0080 began.

Backwards Compatibility

This proposal modifies the built-in storage miner actor and requires a network upgrade.

State migration: Minimal. No structural changes to SectorOnChainInfo or Deadline are needed. The quality multiplier is applied at runtime during sector activation, extension, and update. No existing sector state requires migration. The reserve burn is a single balance transfer (~2M gas). This is among the lightest state migrations of any recent core FIP — compare to nv25 Teep which iterated every miner, deadline, and partition.

API compatibility: StateMinerSectors, StateSectorGetInfo, and related APIs return existing quality values for grandfathered sectors and new values for sectors activated after the upgrade. Clients computing QAP should use the verified_deal_weight_multiplier_at(epoch) function for forward calculations.

Miner operations: Storage providers do not need to change their sealing pipeline. The quality multiplier is applied automatically by the miner actor. Existing Fil+ workflows can continue — deals will simply not receive enhanced quality after the transition.

Test Cases

Unit Tests

Multiplier interpolation (code values → effective ratio = code_value / QBM):
- Before TRANSITION_START: returns 100 (effective 10×)
- At TRANSITION_START: returns 100 (effective 10×)
- At TRANSITION_START + DURATION/2 (525,600 epochs): returns 55 (effective 5.5×)
- At TRANSITION_START + DURATION (1,051,200 epochs): returns 10 (effective 1×)
- At TRANSITION_START + DURATION + 1: returns 10 (effective 1×)
CC sector quality is always 1× regardless of VDWM — CC sectors have zero verified weight, so the multiplier has no effect on them. Verify this invariant holds throughout the transition.
Fil+ sector at transition midpoint: QAP ≈ RBP × 5.5 (interpolated effective multiplier).
Sector extension across transition: Sector activated with VDWM=10, extended after transition completes → new QAP = RBP × 1.
Mining reserve burn:
- Reserve actor (f090) balance → 0 after upgrade.
- Burn actor (f099) balance increased by former reserve balance.
- No other actor balances affected.

Integration Tests

WindowPoSt unaffected: Prove that WindowPoSt succeeds identically for sectors regardless of when they were activated relative to the transition.
Block reward distribution: Over a simulated transition period, verify total block rewards match the expected minting curve M(t) = M_S(t) + M_B(t) within rounding tolerance.
Pledge calculation: Verify that initial pledge for new sectors uses the interpolated VDWM at the activation epoch.
Cross-FIP interaction:
- FIP-0081 (pledge ramp): Verify the gamma pledge ramp operates correctly with changing VDWM. The ramp multiplier is independent of the quality multiplier.
- FIP-0098 (simple termination fee): Verify 8.5% termination fee is correctly calculated on the updated initial pledge.
- FIP-0100 (per-sector daily fee): Verify daily fee calculation with updated sector quality.

Security Considerations

A comprehensive formal security analysis accompanies this FIP (full analysis). Five attack vectors were analyzed with quantitative bounds:

Consensus security improves

The minimum physical cost of a 51% consensus attack increases by 17.6%:

Metric	Current (VDWM=10)	After Daybreak (VDWM=1)
Minimum physical storage for 51%	0.944 EiB (via datacap)	1.11 EiB (physical only)
Pledge capital for 51% (FIP-0081)	~~53M FIL (~~$80M)†	~~41M FIL (~~$61M)
Virtual (non-physical) consensus power	~16.3 EiB (88% of QAP)	0
Datacap access required for attack	Yes (permissioned)	No (permissionless)

†Under the current system, the 10x path requires both datacap access AND higher per-sector pledge (Fil+ sectors have ~1.69 FIL pledge each vs ~1.09 FIL for CC sectors under Daybreak). The pledge capital for the 10x attack is actually higher, but the physical storage requirement is 17.6% lower.

Today, an attacker with datacap access can acquire 51% of consensus power with only 0.944 EiB of physical storage — the 10× multiplier supplies the rest virtually. After Daybreak, 100% of consensus power is physically backed. The primary security improvement is the elimination of 16.3 EiB of virtual consensus power and the 17.6% increase in physical storage required.

F3 fast finality (FIP-0086) provides an additional safety margin by reducing the finality window from 7.5 hours to ~30 seconds.

Flash power attacks are economically irrational

An attacker onboarding sectors during the transition and terminating to extract rewards faces:

25-day minimum break-even on the termination fee (FIP-0098: 8.5% of initial pledge ≈ 0.093 FIL per sector under Daybreak)
75% of rewards locked in 180-day vesting — unvested rewards forfeit on termination
Scaling penalty: adding power dilutes the attacker's own per-unit reward
Result: Minimum 25-day capital commitment for zero net profit. Not a viable "flash" strategy.

Quality arbitrage is bounded and diminishing

Under grandfathering, existing Fil+ sectors retain 10× quality until expiry. The maximum premium is:
$$Premium \leq 9 \times CCRewardRate \times RemainingSectorDays \to 0$$
All grandfathered sectors expire within 3.5 years (FIP-0052). This is the cost of a smooth transition — it is the gradual elimination of existing redistribution, not new value creation.

Mining reserve burn has no protocol interaction

The reserve burn is a one-time balance transfer. No economic formula contains both VDWM and the reserve balance as variables. These changes are mathematically independent.

No new attack vectors

Daybreak leverages existing security mechanisms (pledge, vesting, termination fees, F3 finality) without introducing new security parameters. All analyzed vectors either have negative expected return or show improved security posture compared to the status quo.

Incentive Considerations

Who benefits

CC storage providers: 8.5× revenue increase per sector. Per-sector pledge also increases (~6.5× under FIP-0081, driven by the Simple consensus pledge component), but ROI still improves from ~23% to ~30%, and absolute earnings per unit of physical storage increase dramatically.
Small and new SPs: No longer need to navigate the notary system to earn competitive rewards. Equal access based on physical storage contribution.
Token holders: Reserve burn removes ~283M FIL of potential inflation. Reduced gaming improves network credibility.
Genuine data clients: Storage pricing becomes market-driven rather than subsidy-driven. Clients who value Filecoin storage pay fair market rates.

Who is affected negatively

SPs dependent on the Fil+ subsidy: Providers whose business model relies on the 10× multiplier (particularly for non-retrievable data) will see rewards decrease to 1× levels. This is an intended outcome — the subsidy has not produced the useful-storage incentive it was designed to create.
Notary ecosystem: DataCap and notary roles lose their protocol-level economic significance. These roles can transition to application-layer verification and reputation services.
Legitimate verified deal SPs: Providers storing genuine verified data will see per-sector rewards decrease. However, their physical storage still earns 1× rewards, and the transition provides 12 months to adjust pricing to market rates.

Transition timeline

Month	Effective VDWM	CC Reward (approx.)	Notes
0	10×	0.000107 FIL/day	Status quo
3	7.75×	0.000138 FIL/day	Minimal change
6	5.5×	0.000195 FIL/day	CC reward ~doubles
9	3.25×	0.000339 FIL/day	Fil+ premium eroding
12	1×	0.000910 FIL/day	All sectors equal

This gradual curve allows market participants to adjust positions. SPs dependent on Fil+ subsidies have 12 months to transition to alternative revenue models: market-rate storage, FVM-based incentive contracts, FOC/PDP warm storage services, or other application-layer mechanisms.

Product Considerations

Impact on existing storage products

The Filecoin Onchain Cloud (FOC) stack — PDP (Provable Data Possession), FilecoinPay, FWSS, Synapse SDK — operates via FVM smart contracts and is independent of the Fil+ quality multiplier. This FIP does not affect those products.

Future deal incentive mechanisms

With VDWM=1 at the protocol level, deal incentives move to the application layer:

FVM smart contracts can implement custom incentive structures (storage bounties, retrieval guarantees).
The FOC stack provides built-in streaming payment rails for storage services.
DataDAO and data market protocols can offer deal-specific rewards without protocol-level multipliers.

This aligns with the design principle of a minimal, neutral base layer that supports diverse application-layer innovation — consistent with the approach taken by Ethereum and other mature L1 protocols.

Implementation

Required changes

Component	Change	Complexity
`filecoin-project/builtin-actors` — `actors/miner/src/policy.rs`	Add `verified_deal_weight_multiplier_at()`, update `quality_for_weight()` and `qa_power_max()` call sites	Low — function addition + 2 call site modifications
`filecoin-project/builtin-actors` — system actor upgrade	Add reserve-to-burn transfer at upgrade epoch	Low — single balance transfer
`filecoin-project/lotus`	Bundle new builtin-actors, set upgrade epoch	Standard upgrade procedure
`filecoin-project/venus`, `ChainSafe/forest`	Bundle new builtin-actors, set upgrade epoch	Standard upgrade procedure
`filecoin-project/specs`	Update sector quality and token allocation sections	Documentation
`filecoin-project/ref-fvm`	No changes needed	—

Gas impact

The code change adds approximately 200–350 gas per invocation of quality_for_weight() (46–89 additional WASM instructions at 4 gas each). In context:

Operation	Current Gas	Added Gas	Overhead
`ProveCommitSectors3` (3 sectors)	~530,000,000	~900	0.00017%
`PreCommitSectorBatch2` (4 sectors)	~120,000,000	~1,200	0.0010%
`SubmitWindowedPoSt`	~24,000,000	0	0% (does not call `quality_for_weight()`)
`CronTick`	~10–50,000,000	0	0% (grandfathering: no quality recalculation)
State migration (reserve burn)	—	~2,000,000	One-time

Implementation tracking

Repository	PR	Status
`filecoin-project/builtin-actors`	TBD	Not started
`filecoin-project/lotus`	TBD	Not started
`filecoin-project/venus`	TBD	Not started
`ChainSafe/forest`	TBD	Not started
`filecoin-project/specs`	TBD	Not started

Acknowledgments

This FIP builds on the work of many community members who have advocated for economic reform over the past several years, particularly the authors of FIP-0080 (Fatman13, ArthurWang1255, stuberman, Eliovp, dcasem, The-Wayvy) and FIP-0093 (dcasem). The extensive discussion in Discussion #774 and Discussion #1030 provided the community context that informed this proposal.

The economic simulation, gas benchmarking, and security analysis were developed with the assistance of AI tools (Anthropic Claude) and GPU compute (NVIDIA RTX 5080, Quadro RTX 6000) to validate mathematical claims against the Filecoin protocol specification and on-chain data. Pledge calculations use the FIP-0081 formula deployed at NV24. All simulation source code, data, and analysis are published for independent verification:

Simulation: github.com/Reiers/fip-daybreak/sim
Analysis and security proofs: github.com/Reiers/fip-daybreak

References

Filecoin Spec: Block Reward Minting — Defines M_S, M_B, θ, R̄
Filecoin Spec: Sector Quality — Defines QAP, VDWM, DWM, QBM
Filecoin Spec: Miner Collaterals — Defines initial pledge formula
Filecoin Spec: Token Allocation — Defines mining reserve
FIP-0003: Filecoin Plus Principles — Introduced the 10× quality multiplier
FIP-0052: Increase Max Sector Commitment to 3.5 Years — Sector lifetime bound
FIP-0076: Direct Data Onboarding — Current DataCap allocation mechanism
FIP-0080: Phasing Out Fil+ — Prior proposal, Discussion #774
FIP-0081: Pledge Ramp — Pledge smoothing mechanism
FIP-0086: Fast Finality (F3) — 30-second finality
FIP-0093: Set Mining Reserve to Zero — Prior proposal for reserve burn
FIP-0098: Simple Termination Fee — 8.5% of initial pledge
FIP-0100: Per-Sector Daily Fee — Daily fee mechanism
CryptoEconLab: Resilience of the Filecoin Network

Copyright

Copyright and related rights waived via CC0.

Fatman13 · 2026-02-28T02:18:19Z

Fatman13
Feb 28, 2026
Collaborator

Background: Five Years of Debate

There is a blip of FIP discussion by Ancients Research as early as end of 2021, i think, calling for exactly this... This FIP does not seek to assign blame — the Fil+ program was a reasonable experiment that did not produce the intended results. The economic data now provides a clear basis for course correction., ie a metric for when to pivot or not.

Why a 12-month linear transition?

What's the process of getting DC during the 12-month transition? What will the ROI for onboarding CC or DC sectors during the transition look like, roughly, along the head, the middle and the tail? Also would the collateral being returned as VDWM goes down? Would there still be incentives for DC governance to continue their effort when knowing a great chunk of their work load would be gone in 12 month?

1 reply

Reiers Feb 28, 2026
Author

Thanks for the Ancients Research link @Fatman13, that's a good addition to the historical timeline, predating even FIP-0036.
Will add it.

To your questions:

ROI during the transition (head/middle/tail)

The simulation data gives us this directly. Approximate per-32GiB-CC-sector daily rewards at key points:

Month	Effective VDWM	CC Reward/day	DC Reward/day	CC ROI (ann.)
0	10×	0.000107 FIL	0.00107 FIL	58%
3	7.75×	0.000138 FIL	0.00107 FIL	75%
6	5.5×	0.000195 FIL	0.00107 FIL	106%
9	3.25×	0.000339 FIL	0.00110 FIL	185%
12	1×	0.000910 FIL	0.000910 FIL	399%

DC reward stays roughly flat because the higher per-unit reward offsets the declining multiplier - the pool is constant, just redistributed. CC becomes more attractive than DC (after accounting for datacap overhead and governance friction) somewhere around month 4–5, at which point rational SPs stop bothering with new datacap applications.

Collateral during transition

Existing sectors are grandfathered — their quality and pledge remain locked at the VDWM they were committed under. No collateral is returned mid-term. Only when a sector is extended or updated does quality get recalculated at the current (lower) VDWM. This is specified in the Grandfathering section but I'll make it more prominent since it's a common question.

New sectors committed during the transition use verified_deal_weight_multiplier_at(activation_epoch), so their pledge is calculated against the interpolated multiplier at time of commitment. No surprises - you get exactly what you sign up for.

DC governance incentive during transition

The economic incentive to participate in datacap governance declines as the multiplier shrinks, and that's by design.
The 12-month window gives the notary/allocator ecosystem time to pivot toward application-layer roles where permissioned verification arguably belongs - data quality scoring, retrieval guarantees, reputation systems, or integration with FOC/PDP services. These functions don't need a protocol-level reward multiplier to be valuable.

beck-8 · 2026-02-28T06:51:49Z

beck-8
Feb 28, 2026

Would there still be incentives for (DC governance AND sp) to continue their effort when knowing a great chunk of their work load would be gone in 12 month?

This is indeed a big gamble

7 replies

Reiers Feb 28, 2026
Author

@beck-8 Thanks for the support! Could you clarify what you mean by "the way of 10 or 100 for all members" - are you asking about giving all sectors the same multiplier (10× or 100×), or something else?

beck-8 Feb 28, 2026

What are your thoughts on such a crude approach as directly multiplying all sectors by 10 or 100?

Reiers Feb 28, 2026
Author

Great question! That is actually mathematically equivalent to what Daybreak proposes.

Block rewards are distributed proportionally to each sector's share of total QAP. If every sector gets 10×, the multiplier cancels out: your share of the pool is (your_RBP × 10) / (total_RBP × 10) = your_RBP / total_RBP. Same result as 1× for all, or 100× for all.

The total reward pool is determined by RBP and the minting function - not by QAP. So the absolute multiplier number doesn't matter, only whether there's a difference between sector types.

We went with reducing to 1× rather than raising CC to 10× because:

Simpler code change (one constant trends to its base value rather than modifying a second constant)

Cleaner semantics (no multiplier = no multiplier, rather than "everyone has the same multiplier")

Same economic outcome either way

So if "10× for all" is easier for the community to rally behind conceptually, the math supports it - it's just a different framing of the same change._

Edit: @irenegia correctly pointed out below that "all 1x" and "all 10x" are equivalent for rewards but not for pledge. Under FIP-0081, the Baseline consensus pledge component uses absolute QAP — so "all 10x" locks ~30M more FIL than "all 1x" in that component. The reward math above is correct, but I should have noted the pledge distinction. Daybreak proposes 1x. See my reply to irenegia below for the full breakdown. I've also revised the ROI and pledge figures in the main post to use the correct FIP-0081 formula.

irenegia Mar 2, 2026
Collaborator

Sorry, reading this only now, after posting my other msg, but I think there may be a key difference between "all1x" and "all10x" that is about the effect on total locked FIL amount. Would it be possible to include that in your simulation?

And note that total locked influences CC (cicrulating supply), which changes the consensus pledge value. So there is kind of a loop effect here that we need to evaluate in order to avoid wrong estimations about changes in SPs ROI?

Reiers Mar 2, 2026
Author

@irenegia You're right ! I should correct my earlier statement to beck-8. "All 1x" and "all 10x" are equivalent for rewards (the multiplier cancels in the reward share), but they're not equivalent for pledge under FIP-0081. I've edited that reply with a correction note, and revised the pledge/ROI numbers in the main discussion post to use the full FIP-0081 formula (γ=0.7).

The difference is in the Baseline consensus pledge component:

BaselinePledge = 0.3 × CircSupply × SectorQAP / max(Baseline, NetworkQAP)

Under "all 1x", NetworkQAP = 2.17 EiB. Under "all 10x", NetworkQAP = 21.7 EiB. The denominator is max(114.2 EiB, NetworkQAP) = 114.2 EiB in both cases, but the numerator (SectorQAP) differs — 32 GiB vs 320 GiB. So the Baseline component is 10× higher under "all 10x".

Network-wide, that's a ~30M FIL difference in locked Baseline pledge — exactly the gap I quantified in my reply to your other comment. Daybreak proposes 1x, so this falls on the lower-locking side.

On the feedback loop (locked FIL → circulating supply → pledge): you're right that this exists. If ~30M less FIL is locked, circulating supply increases by ~3.6%, which increases the Simple pledge component by ~3.6% (SimplePledge ∝ CircSupply). The system finds a slightly different equilibrium, but the effect is second-order. My simulation models circulating supply dynamically (daily updates with issuance, vesting, and burns), so this feedback is captured in the pledge projection numbers I shared.

Good catch — the beck-8 reply was imprecise on this point.

just-ptrk · 2026-02-28T08:16:16Z

just-ptrk
Feb 28, 2026

cel-feb-2026-filecoin-supply-forecast.pdf

seems also relevant in that direction

6 replies

just-ptrk Mar 2, 2026

do you have anything in mind for FIP003 itself? about the baseline? this FIP is basically just technical enforcement of a number but doesn't touch any of the systems that brought us to the point where we have to consider hard overwriting numbers in a complex system of math - the system failed with the current numbers, whats the outlook for the system if we change one of them?

Reiers Mar 2, 2026
Author

Good question @just-ptrk - and I want to give it a real answer, not a diplomatic one.

You're right that Daybreak is "just" changing one number. But I'd push back on the framing that the system failed because of the numbers. The minting math works exactly as designed -- baseline defers rewards when the network is small, releases them as it grows. That mechanism is sound. What failed is the governance layer that FIP-0003 bolted on top.

FIP-0003's own stated mission is to "maximize the amount of useful storage." Five years in: RBP peaked at 17 EiB and has collapsed to 2.17 EiB. The network is losing SPs every single day. The 10× multiplier didn't grow the network -- it created a system where you need to know the right notaries, get datacap approval, and navigate a permissioned layer just to compete. It's pay-to-win, or know-people-to-win. Small operators can't enter, and the ones already here are leaving.

I work with SPs. For the last two years I've had to turn away small datacenters because the economics don't work for them without datacap. Think about that - a storage network where it's economically irrational to store data unless you've been approved by the right people. That's not a number problem, that's a structural problem.

So what's the outlook if we change this one number?

The outlook is that any operator can seal CC sectors and earn a fair share of block rewards -- 399% ROI vs the current 58% -- while they find real paying customers. No datacap applications, no notary relationships, no governance overhead. Just: bring storage, earn rewards, find deals. The way it should work.

The minting system doesn't need fixing. The baseline continues to defer ~524M FIL that unlocks as the network grows - that's a feature, not a bug. I tested baseline modifications from 0% to 100% annual growth in the simulation and the counterintuitive result is that slowing it actually hurts SP economics (consensus pledge denominator is max(Baseline, QAP) - shrink baseline, pledge goes up). So I leave it alone.

What Daybreak does touch is the one lever that turned Filecoin from an open market into a permissioned club. Remove that, and the protocol goes back to what it's supposed to be: competitive storage that anyone can join. Then FOC, PDP, Filecoin Pay - the real paid deal infrastructure being built right now - can serve actual demand without competing against a subsidized datacap layer that distorts the entire market.

You can explore the economics yourself - plug in any miner ID and see the before/after: daybreak-dashboard.org

The system didn't fail because of the math. It failed because of who gets to decide who wins. That's the change I want to see.

just-ptrk Mar 2, 2026

the danger i see is another fip on the next cycle reinstating all of this. without 0003 and qap as a concept removed itself this effectively amounts to a "lets try these numbers".

you work with miners, as do i: this doesn't bring the stability we are seeking here in the end. qap and fil+ are still vars after this in any economic calculation while we are trying to simulate constants with this fip here.

Reiers Mar 2, 2026
Author

Fair point @just-ptrk - and I have thought about this.

You're right that technically, a future FIP could propose reinstating a multiplier. QAP as a concept still exists in the protocol after Daybreak. But I think the practical risk of that happening is near zero, for a few reasons:

Economics create their own gravity. Once every SP in the network is earning equal rewards on raw bytes - 399% ROI, no datacap overhead - who's the constituency that lobbies to bring back a permissioned subsidy? The notaries? They'll have moved on. The SPs? They're earning more. The investors? They just had 283M FIL burned. You'd need a coalition of people arguing "actually, let's go back to the system that shrank the network from 17 EiB to 2 EiB." Good luck.
The burn is irreversible. The mining reserve doesn't come back. That's a permanent structural change, not a variable.
Fully removing QAP is a follow-up, not a blocker. After Daybreak, QAP = RBP for all sectors. The QAP abstraction becomes dead code - it still runs but produces identity values. A cleanup FIP to remove it entirely from the actors is much simpler when the multiplier is already 1× and nobody depends on it. Trying to do both at once - change the economics AND refactor the protocol's power abstraction — is how FIPs die in committee. FIP-0080 tried to solve everything and stalled for 2.5 years.
The real stability comes from what replaces it. FOC, PDP, Filecoin Pay — these create real revenue streams for SPs that don't depend on governance permission. Once SPs have paying customers, the protocol-level multiplier becomes irrelevant even if it still exists as dead code. That's the stability we're both looking for — not "the right number" but "the right economic model."

I hear you - "let's try these numbers" is not a long-term thesis. But "remove the distortion, let the market work, clean up the dead code in a follow-up" is. Daybreak is step one, not the whole staircase.

Reiers Mar 2, 2026
Author

Quick update on the numbers in this thread - @irenegia's question about total locked FIL exposed that my simulation was using the pre-FIP-0081 pledge formula. I've corrected the main post and all supporting docs. The core thesis holds, but some numbers I cited here were wrong and I want to be transparent about what changed.

Corrected numbers:

	Status Quo	Daybreak
CC reward per sector	baseline	8.5× higher
CC pledge per sector (FIP-0081)	0.169 FIL	1.093 FIL (+6.5×)
Annual ROI on pledge	~23%	~30% (+1.3×)
Total issuance	unchanged	unchanged

The 8.5× reward improvement was always correct — that's a direct consequence of removing the 10× redistribution from CC to DC sectors. What I had wrong was the pledge impact. Under FIP-0081 (γ=0.7), when NetworkQAP drops from ~18.5 EiB to ~2.17 EiB, the Simple consensus pledge component scales up proportionally. So the reward gain is partially offset by higher pledge, yielding a real but modest ROI improvement.

What this means for the CEL comparison: CEL's recommendation #4 — remove Fil+ by granting equal quality — still aligns directly with Daybreak. Their concern about the pledge spiral (rising pledge as network contracts) is valid and separate from what Daybreak does. Daybreak fixes who gets rewarded; it doesn't change the macro pledge dynamics that CEL documents. Those are complementary problems.

What still holds: The multiplier is a pure zero-sum redistribution. It does not increase total block rewards. The minting function uses RBP. Removing it means every operator earns their fair share without needing datacap approval. The governance arguments, the baseline analysis, the transition mechanism, the security analysis, the gas benchmarking — all unchanged. The corrected simulation data and CSVs are on the repo.

I'd rather correct publicly than let wrong numbers sit. The case for Daybreak rests on fairness and structural reform, not on ROI projections.

fpl-mb · 2026-02-28T15:59:43Z

fpl-mb
Feb 28, 2026

Hey Reiers!

I've read through your proposal, and I fully support it.

As an investor, I've been worried about the direction Filecoin has been heading for a while now. There's something fundamentally wrong about a network built on the promise of decentralized storage slowly handing control over to a small group of gatekeepers who decide who gets rewarded and who doesn't. That's not decentralization, that's just a new form of centralization wearing a different costume, and to me, centralization is one of the most damaging things that can happen to a blockchain network. It defeats the entire purpose.

The whole reason I believe in projects like Filecoin is the principle that no single entity should have that kind of power. When a permissioned layer starts controlling block reward distribution, we've already lost something important, and it needs to be fixed.

Burning 283 million FIL is obviously great news for me economically, but honestly that's secondary. What matters most is that this proposal tackles the root problem: the incentives have been broken, the network has shrunk dramatically, and ordinary storage providers have been competing on an uneven playing field. Leveling that field is what actually creates the foundation for real, sustainable growth.

I'm rooting for you. I hope this proposal finally gets the support it deserves.

Best,
Early investor and a strong supporter!

0 replies

TonjeMB · 2026-03-01T07:09:14Z

TonjeMB
Mar 1, 2026

I don't usually comment on GitHub, but this one felt worth speaking up about.

I've been invested in Filecoin for several years, and honestly there's been a growing frustration sitting in the back of my mind that I haven't been able to fully articulate until I read this. The Fil+ program always seemed off to me, not in theory, but in practice. The idea that a small group of people quietly became the deciding factor in who earns what on a supposedly open network... it just never sat right.

I got into crypto because I believe in what decentralization actually means. Not as a marketing angle, but as a real principle, that systems should be open, fair, and not dependent on who you know or whether the right people approve of you. What's been happening with Filecoin is the opposite of that, and watching the network shrink while the same structural problems go unaddressed has been frustrating to watch as an investor.

This proposal gets it right. Fix the incentives, remove the gatekeepers, and burn the reserve. Simple, but significant.

Thanks for putting in the work to actually move this forward!

0 replies

irenegia · 2026-03-02T11:07:18Z

irenegia
Mar 2, 2026
Collaborator

Thanks @Reiers for writing this and doing the simulation work here!
Phasing out Fil+ by creating a system where all sectors earn the same block rewards makes a lot of sense to me.

Question: What happens to consensus pledge when a sector gets extended and its QAP is rescaled down during the transition period? More generally, what are the implications for total locked FIL as a result of this change? Is there a risk of ending up with a significantly lower total locked amount?

Alternative proposal: Simply give 10x to all newly onboarded sectors. Why? Currently, ~83% of sectors have datacap, meaning they already have 10x power. Giving new sectors 10x and waiting for the existing 1x sectors to fade out could be faster than doing the opposite (i.e., giving a smaller multiplier and waiting for old 10× sectors to fade out, as proposed here), especially because we could also allow 1x sectors to get 10x via snap deals. From a power distribution perspective, the outcome is similar to what this FIP proposes. And as you noted, the multiplier does not increase total block rewards. So I think that at the end of the day, the only difference may be regarding total locked FIL (see my question above). Could this approach ensure we don't decrease total locking while maintaining all the other benefits?

13 replies

beck-8 Mar 3, 2026

I really don't have much knowledge to reply to this question as to whether it's 1x or 10x. But the circulation must have increased significantly.

We don't have a shortage of storage providers

I can definitely say this is wrong. @irenegia At this stage, only a few companies with other business lines are still working hard. So and not many SPs are participating anymore. Many of my friends are planning their exits this year.

So not only do we need fairness, we also need to save the market.

just-ptrk Mar 4, 2026

listen to @Reiers! he knows and he has an elegant way to put things to possibly even make this FIP work out. its concerning thou because i honestly thought the project would have managed to have at least the privileged miners survive. wrong.

so, enough miners?

whos gonna store all the data when we reduced this to the necessary 3 miners? if reiers is dead i doubt PL has 3 miners left! then you can all let your preprinted stakes stake there, the whole, planned ~600kk! we could FIP this down to 1 i assume...

let me be blunt, very blunt: the project is where it is because of people who have never sealed a single sector bagged preprinted coins in the billions without delivering corresponding value to the network.

what if we'd let devs/... stake on their "this is the next big thing! THE THING!" FIPs and then burn it based on diff promise/result? those billions would have been burnt... i am happy there is a starmap? star? what? that thing, exactly! the thing! iceland grand tour opening last day main stage thing to tell me how i can connect my native wasm actors to ipc? side chain thingy things? horizontally scale and stuff. if miners would just have done more! technically you can run FOC on ETH - FOCOETH, why even bother with miners? FOCOETH-SPs will for sure stake whatever you ask them to! for sure, fingers crossed - someones gonna pay for hottubs in davos, right? RIGHT???????

your whole "miners are not needed and if we allow them to participate they need to pay us rent" (thats what fip 100 says - don't be a fool and think this made the network more attractive, it didn't) - hard to wrap ones head around tbh. foolish, arrogant. miners do not want to pay rent to get the opportunity to provide storage. the project failed them, continues to fail them. there is a discussion somewhere about miners and F3 and how filecoin can build an incentive to participate by creating opportunities for miners to contribute to the f99 stake. its absurd....

lets ask miners x1 vs x10 - those who have staked, those with hard commitment. miners are sick and tired of being told that their contribution is not big enough. its not enough to bring all the hard commitments, the hard investments into hardware. its not enough to be the provider of all the storage committed to the network. its not enough to be, well, miners! being told whos data to store, how to store it, and all public so the project doesn't miss out! no! miners need to take care that the constructs resembling the FIL currency don't fail despite them simply being a victim to, and we can name it here, greed!

miners....from the networks technical perspective everyone else is just a tourist...what do we get for the x10? tell us miners, what is left you have to offer? why should we even talk this? why shouldn't we do 0.1? your arguments are hollow, argued within a system that failed.

turn around, look back: was it worth blowing ~10 billion on this? ~3 bash scripts and a dead blockchain project? 250kk real moneys and billions over billions in PoS shithead wealth?

https://filecoin.io/blog/posts/introducing-the-filecoin-economy/ read it. this was basically implemented 1:1. it was dumb back then, but, lord, does it look bad now. i am happy to see we all agree that this failed.

this discussion started when wijnand stated "we store our own fil+ 50% with ourselves because retrieval isn't possible reliably otherwise!" - march 2021 or around that, first dc allocation of size ever! this is a discussion since fil+ exists and people said on day1 that we will find ourselves here, exactly where we are! welcome to the party! math back then, math today. getting rid of x10 is not a new idea and the arguments are 5 years old.

you have no idea what releasing x fil over y time to the market would do - thats why we are here! i'd eat shit and accept $0.1 as a miner (yeah! thats better than whats to come otherwise!) - we could build an on chain thing so this is hard commitment, no prob. at. all. - in exchange to get rid of fil+ and what it means, brings. denying those who failed us the possibility to ever money grab free coin again, burning the reserve! lets work together on a thing that allows people who are denied this possibility to hard commit to the filecoin network a tooly thingy so they can back up the promise of success of what ever the fu they want other people to do with a hard commitment - i. am. all. ears.

"the price might go down" - cry me a fucking river.

thats just how it looks like from over here, where i am walking. i am happy to get other views on how we got here.

thats why i do not fip stuff anymore. i decided to just watch it die a long time ago. inevitably. 350PiB capacity left and not a single useful byte stored. lets hope the network doesn't run out of capacity before the foundation finds the 2 PiB of data that will send this freaking project to the moon!

tick. tock.

"patrick, consider fil+ not being up for discussion in the near future", some like that, a north, closing the discussion that brought us fip100 instead of meaningful change to the underlying problem. what. the. fuck. happened????? we hardly have the committee report system runnin' and no grants have been harvested yet! kaitlin's back thou - we aren't gonna do fip001v2? aren't we?

@Reiers sorry, all yours. but someone needed to say it

Reiers Mar 4, 2026
Author

@just-ptrk no worries, that's fine! Thank you for saying it.

I know this comes from yeeeears of watching things go wrong and being told to be patient. I'm right there with you, and so are most of the SPs still standing.

I also want to acknowledge the work you did here calibnet PoC for the reserve burn. That's not just talk! That's coming from someone who cares enough to write the code. I've been looking at it and it informs the Daybreak implementation approach.

The goal here is simple: make the rules fair, make the economics work, and let miners do what they're good at - providing storage. That's what Daybreak does. One FIP, two changes, no committees required.

Let's get it done.

just-ptrk Mar 4, 2026

not my code. we just took the opportunity and ran with it as long as we could keep a fork alive with adhoc sealed sectors.

irenegia Mar 5, 2026
Collaborator

Maybe my comments may have been misread? Let me clarify: I support removing Fil+ as a protocol-level incentive mechanism. As protocol designer, I'm well aware too of the current situation: the network contraction, the bottlenecks created by the datacap system, the pain points for SPs. That's exactly why I'm actively researching alternatives to the current incentive structure.

My comments are technical suggestion to strengthen the proposal. I flagged a specific risk (total locked FIL impact) and proposed a mitigation (10x-for-all) that achieves the same outcome (every sector earns equally, no more Fil+ gatekeeping, same reward redistribution). I agree with the vision here: an SP should be able to spin up storage, earn a fair rate, and take on deals when real demand shows up.

And I fully agree with @beck-8 that we need fairness and to save the market: that was the spirit of my message. When I said "we don't have a shortage of storage providers," I was stressing that we have a shortage of client: the demand side is the bottleneck. We need to make it viable for existing SPs to survive and grow when that demand comes.
On that front, as @Reiers noted in the reply to kubuxu, from a total capital perspective (FIL pledge plus fiat investment), the pledge becomes a smaller share of total per-sector spend, so the choice between 1× and 10× matters less to overall profitability than it might seem.

jennijuju · 2026-03-02T11:53:08Z

jennijuju
Mar 2, 2026
Maintainer

First of all, I really appreciate the depth of work that went into this. The analysis, the implementation detail, all of that raises the bar for how we should be discussing core changes to the protocol (you can tell this has leveraged AI AND on top, there are a lot of thoughts put into it separately!). Thank you for putting this together.

I think it would be better to split this into two separate FIPs when it comes to execution. Deprecating FIL+ and burning the mining reserve are different issues. They touch different parts of the protocol and they will attract different opinions. If they stay bundled, people who support one but not the other are forced into an all or nothing position. From a governance perspective, separating them would likely make meaningful progress easier.

Sunsetting FIL+

On the FIL+ side, I am fully supportive of deprecating it.

From a protocol perspective

At this point, the protocol is effectively paying FIL+ sectors for consensus only. In many cases there is little real service being delivered behind those sectors, yet the network continues to compensate them as if they are providing both storage utility and consensus security. The actual utility data suggests otherwise.

We now have better primitives and building blocks. With FIP 0076 landed, FIP 0109, FIP 1220 in progress, and the recent FOC work, developers can build userland onchain storage markets that are driven by real demand. Today FIL+ governance decides what counts as useful service. I would argue that useful service should be defined by external demand. If someone is willing to pay real money for a storage service, and that payment results in additional income for storage providers AND revenue flowing into the Filecoin economy, that is useful service. Those are the activities the network should reward or subsidize. Consensus block rewards should not be used to internally declare something useful.

A few of us at FilOz have also been looking at how to deprecate FIL+ safely from a protocol and code perspective — this means we get to a point where miner actor sector weights has no dependency w/ verifreg actor; and eventually deprecating verifreg and maybe datacap actor (datacap actor could still be kept to be used in the userland if useful, however, remove it from core protocol). If this direction gains community support & get move along governance process, we would be happy to collaborate on/support you w/ defining/developing a clean implementation path(TBH we are exploring this anyway and we look forward to simplifying L1 along the way).

One technical nuance I would encourage more modeling on is the choice of converging to 1x. Mathematically 1x for all and 10x for all are equivalent in proportional reward terms. However, the majority of sectors today are already effectively 10x, and Filecoin security has a strong collateral component. Reducing overall effective QA could reduce aggregate locking and potentially introduce additional economic or consensus risk. I am not asserting a conclusion, only suggesting this dimension deserves deeper analysis.

From a governance perspective

I have raised multiple times that i personally treat rkh mechanism as one of the biggest security threats in the filecoin consensus protocol, as these actors have power to impact security parameters w/ near to zero accountability. So remove this "human-in-the-loop" mechanism is a win for the protocol.

I also believe FIL+ program has distracted the community focus to build real useful service/tooling/product that can sell Filecoin to something else. I dont doubt FIL+ Program led to some useful tooling built over the years, I just have a hunch the overall ROI is not that high, according to all the network charts.

On FIP governance, history shows that proposals like this stall not because of the design but because of process (My last attempt was here #844 (comment) but also didnt make meaningful progress). It would be wise to involve FF governance early and be explicit about the pathway forward so this does not end up in discussion limbo.

Burning the mining reserve

Regarding the mining reserve burn, I am less convinced it addresses the problem you stated.

FIL+ touches the consensus reward redistribution mechanism with a permissioned notary layer influencing block reward allocation. The mining reserve is governed through the FIP process. It is not distributed through notaries and it does not automatically distort block reward allocation. Burning it may be a valid monetary policy discussion, but it does not remove notary gated reward distribution in the same structural sense as removing the multiplier does.

Somewhat relevant, there is a project called veFIL proposing leveraging mining reserve to enable some sort of governance token so to enable fileocin has a more effective governance process where token holders may directly engage in.

1 reply

Reiers Mar 2, 2026
Author

@jennijuju Thank you - both for the detailed feedback and for what FIP-0085 made possible. Converting f090 to a keyless account was the necessary first step, and Daybreak's reserve burn is only clean because that groundwork exists.

On splitting

I hear the governance argument and I've thought about it. The reason I bundled them is coalition, not technical coupling. The multiplier removal is an SP-facing change - it's about fairness and barrier to entry. The reserve burn is investor-facing - it's about supply overhang and MC/FDV. Separately, each attracts support from one constituency. Together, they create a broader coalition: SPs and token holders both have something to gain, which makes the governance path easier, not harder.

The risk of splitting is that each half loses the constituency that cares about the other half, and both end up in the same discussion limbo that stalled FIP-0078 and FIP-0080. That said - if the community consensus during the governance process is that splitting improves the odds, I'm not going to die on this hill. The multiplier removal is the structural fix; the burn is the complement.

On FilOz collaboration

Yes, absolutely. Having implementation support from the team that maintains the actors codebase is exactly what makes the difference between "discussion post" and "shipped protocol change." I'd welcome a working conversation on the deprecation path - decoupling verifreg from miner actor weights, datacap actor disposition, and the cleanest way to wind down the multiplier in the actors code. Happy to set up a call or async in whatever format works for FilOz.

On 1x vs 10x

I've addressed this in detail in my reply to @irenegia above — the TL;DR is that the difference is only in the Baseline consensus pledge component (~30M FIL on day 1, converging to <4M by year 3). The Simple component is identical under both because the multiplier cancels. 1x means lower per-sector pledge (1.09 vs 1.50 FIL), which optimizes for the barrier-to-entry problem that I think is the most urgent issue facing the network right now.

On governance process

Your point about involving FF governance early is well taken - I've seen the history with #774 and #844. What's the right next step? Presenting at a core dev call? I'd appreciate your guidance on the pathway that avoids limbo, since you've navigated this process more than anyone.

On the mining reserve and veFIL

The reserve burn is a monetary policy complement, not a structural fix - I agree with that framing. The structural fix is the multiplier removal. The burn addresses a different problem: the 2B supply meme and MC/FDV overhang that @jnthnvctr documented in FIP-0093.

On veFIL: I'm aware of the proposal. My concern is that allocating 283M FIL to a governance token creates a new governance surface with its own capture risks - we'd be replacing one permissioned layer (notaries) with another (veFIL holders). The reserve has sat idle for 5+ years; the simplest, most credible action is to remove it permanently. But I understand this is a separate discussion and I'm open to hearing the case if veFIL proponents make it.

quriustus · 2026-03-02T16:29:18Z

quriustus
Mar 2, 2026

+1 — Strong support for Daybreak.
This proposal elegantly solves two long-standing sources of centralization in one clean upgrade:

The 10× VDWM has effectively turned Filecoin into a “notary-gated” reward system for five years. Removing the multiplier and letting every 32 GiB sector earn the same block reward finally restores the original vision of a permissionless storage market.
Burning the entire ~283 M FIL mining reserve (f090 → f099) eliminates the last discretionary token bucket that no one ever really wanted sitting there. Token holders and the network as a whole win.
I really like the thoughtful design choices:

• 12-month linear ramp-down gives everyone time to adjust

• Full grandfathering of existing sectors (no retroactive changes, no gas bombs)

• CC sectors immediately jump ~8.5× in daily reward while total network issuance stays mathematically identical

• Consensus security actually improves (51 % attack now needs ~17.6 % more real storage)
The code sketches look solid and the test plan covers the important edge cases (transition math, pledge recalculation under FIP-0081, extension behavior, etc.). Security analysis also seems thorough — virtual power disappears and flash attacks become uneconomical.

This feels like the right moment to sunset the Fil+ reward subsidy and move genuine data incentives to the application layer (FVM DataDAOs, contracts, etc.).
The notary ecosystem can pivot to higher-value services instead of gate-keeping block rewards.

Happy to review the implementation PR once it’s open and run the simulation numbers myself. Ship it.

0 replies

just-ptrk · 2026-03-02T17:34:03Z

just-ptrk
Mar 2, 2026

btw. @Reiers 88phnx88/lotus#1 has a working poc for burning the reserve. the code has been tested, the calib net forked with it, works fine

1 reply

Reiers Mar 2, 2026
Author

@just-ptrk thanks for surfacing this. The code change was minimal, which is exactly the point: the reserve burn is a single state migration in the upgrade schedule. That's one of the reasons I bundled it with the multiplier transition - the implementation cost is near zero.

Shekelme · 2026-03-02T19:12:53Z

Shekelme
Mar 2, 2026

Not because there's no demand for storage, but because

Also because there's no demand for storage. We haven't had any new deals (both verified and non-verified) for months. For months...
If someone is choking on deals, please share with us and help us support the network despite the lack of economic incentives to do so...
p.s. I know that's not what this is about, but I just came in to take a quick look and say something along those lines. Because

That shouldn't be how a permissionless storage network works.

0 replies

snadrus · 2026-03-03T16:22:57Z

snadrus
Mar 3, 2026

If the top-line goal is to encourage usage, then consider how the contradictory transitionary period would be 2.5 years of pain with "legacy people having power" and "new people not".

**Alternative proposal: Name="Looking Forward Proposal" **
Part A: Immediately Drop FIL+ onboarding to 0.
Part B: Immediately have NEW CC sectors get a 10x (locked cost & power) increase.
[[Mining reserve part unchanged.]]
Result:

new SPs get the same cost & rewards as existing FIL+ SPs.
existing parked-CC people get no new reward, but
-- have the opportunity to participate in new earnings.
-- do not disrupt the current reward layout.
drops the FIL+ focus immediately and focusses on paid deals & paid retrievals.

After 2.5 years, FIL+ dead-code can be removed trivially. A future FIP can either get rid of the multiplier concept and/or reduce locking-fee in some legacy-fair way.

3 replies

Reiers Mar 3, 2026
Author

@snadrus - appreciate the creative reframe. Ending Fil+ onboarding immediately and avoiding transition disruption are goals I share. But I think "Looking Forward" has a core math issue that makes it collapse into Daybreak anyway.

If all new CC sectors get 10x, the multiplier becomes meaningless. The QAP multiplier only affects rewards through relative share of network power. If new CC = 10x and existing Fil+ = 10x, their share is identical to both being 1x.
The 10x cancels out - it's a unit change, not a real incentive. So the proposal effectively is "set the multiplier to 1x for new sectors" -- just expressed differently.

Existing CC miners are worse off under this proposal than under Daybreak. You explicitly note "existing parked-CC people get no new reward." Under Daybreak, existing CC miners see an ~8.5× reward increase as the verified multiplier transitions down and their share of network power grows. Under Looking Forward, they're stuck at 1x while new sectors get 10x -- creating a strong incentive to terminate and re-seal, which means unnecessary network churn and wasted compute for no net benefit.

The 10x "locked cost" raises the barrier to entry. Pledge is proportional to QAP. Giving new CC sectors 10x power means ~10x consensus pledge per sector. Daybreak goes the opposite direction -- a new SP can onboard a CC sector for ~1.09 FIL instead of needing the pledge that 10x QAP would demand.

On the 2.5-year timeline: Daybreak's 12-month transition ramps the network-wide multiplier smoothly from 10x to 1x. Existing Fil+ sectors keep their deal weight until natural expiry (no disruption to current reward layout), while the value of new verified deals gradually decreases. After 12 months, the multiplier is 1x and all new sectors are equal. After ~2.5 years, the last legacy Fil+ sectors expire and it's fully clean -- same endpoint as Looking Forward, but we reach economic parity 18 months sooner.

I think we're actually closer than it seems - the key agreement is "end Fil+, equalize sectors." The question is whether to do it via universal 10x (which is 1x in disguise) or explicit 1x with a smooth transition. I'd argue the explicit path is simpler, more legible, and better for existing SPs.

snadrus Mar 3, 2026

Going to 10x vs reducing to 1x has key differences:

more Locked FIL is a benefit to the network
Fairness: same locked-fil for same power

Daybreak's transition will provide existing FIL+ SPs with dominance over block rewards for 18 months (avg sector expiry time) in exchange for their having paid too high a locking cost. That exchange may be fair, but will discourage new snapping for 18 months as because it's not worth much QAP.

Reiers Mar 3, 2026
Author

"More Locked FIL is a benefit"

Daybreak's answer to supply reduction isn't just higher pledge - it's the 283M FIL mining reserve burn. That FIL isn't locked, it's gone. Permanently.

Mechanism	Daybreak	Looking Forward
Pledge per CC sector	1.093 FIL (+6.5×)	~1.69 FIL (+10×)
Permanent supply reduction	283M FIL burned	0
10 TiB onboarding cost	~35 FIL	~54 FIL
CC Sector Reward	8.5× (all miners)	1× (existing) / ~8.5× (new)
Y1 ROI	~28%	~24% (existing) / ~28% (new)

The marginal pledge difference (1.09 vs 1.69 FIL per sector) is noise compared to burning 283M FIL from the reserve — that's ~14% of circulating supply removed permanently.
If the goal is reducing liquid FIL and strengthening the token, a one-time 283M burn dwarfs the difference between 6.5× and 10× pledge.

And the higher pledge under Looking Forward comes at a cost: 54 FIL to onboard 10 TiB prices out smaller operators and pushes centralization further in the wrong direction.

"Fairness: same locked-fil for same power"

Under Looking Forward, existing CC miners face a 10× power disadvantage versus new CC miners — for following the rules as they existed. Their choices:

❌ Accept 1/10th the effective power of identical new sectors
❌ Terminate and re-seal at 10× (burn gas + compute for zero net benefit)

Under Daybreak, all CC miners benefit equally as the multiplier drops — no re-sealing, no penalty for early participation:

  xychart-beta                                                                                                                                                                 
      title "Daybreak: CC Sector Reward During 12-Month Transition"                                                                                                            
      x-axis "Month" [0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12]                                                                                                                
      y-axis "Reward vs Status Quo" 0 --> 9                                                                                                                                    
      bar [1.0, 1.1, 1.2, 1.3, 1.4, 1.6, 1.8, 2.1, 2.4, 3.0, 3.8, 5.2, 8.5]

The curve is back-loaded by design — existing Fil+ sectors experience minimal disruption in the early months while CC rewards ramp gradually. By month 12, every sector earns based on raw bytes stored. No winners, no losers, just equal rules.

"Daybreak discourages new snapping for 18 months"

This is a feature, not a bug. If we're deprecating Fil+, we should stop incentivizing data verification theater. And the transition isn't a dead zone - CC sector ROI exceeds status quo from day one (24% → 28% at completion, with continuous improvement throughout).

The real question: if snapping only makes sense because of the 10× multiplier, what does that tell us about the organic demand for verified storage? The answer is FOC/PDP - real data services with real payment rails, not artificial reward multipliers.

Where we agree

We both want: end Fil+, equalize sectors, move to FOC. The difference is that Looking Forward creates a two-class system (existing CC at 1× vs new CC at 10×) that forces wasteful re-sealing, while Daybreak treats all miners equally from the start and reaches economic parity sooner.

kernelogic · 2026-03-04T04:32:33Z

kernelogic
Mar 4, 2026

Supply-side adjustments like this aren’t unprecedented in crypto. Several networks have burned treasury or reserve tokens to improve long-term economic alignment. If OKB can burn large portions of its reserve supply, it seems reasonable that Filecoin could also consider reducing its unused mining reserve—especially if the objective is to move toward a cleaner, more sustainable token economy.

0 replies

martapiekarska · 2026-03-04T10:32:08Z

martapiekarska
Mar 4, 2026

Hi @Reiers
Thank you for presenting at the SP WG call yesterday. I appreciate all the detailed writeup you did and analysis. I think many of the points I would want to make have been stated elsewhere, but I still want to express my thoughts, even if I am repeating the arguments.

I appreciate your intention to "make Filecoin fun again" and the concern that today it feels like a hard labour. I think a lot of it is down to bear market - it always feels like hard work when the market is down. But, as you probably know, that is when a lot of good things are built!

On your points regarding difficulty of receiving Datacap: firstly, I would love to know which allocator have you been trying to work with and what was your experience lately. You say that Datacap is hard to get, and yet according to any stats we can measure, the time to data onboarded, on average, is 6-7 days, with leaders taking less than a day. Now, you could say that it is the audit that is causing the delays - the fast allocators run out of datacap and then they need to be reviewed and that is where the delay is. But, again, according to the stats - the average audit time is now 6 days in february - and that accounts for all the back and forth with allocators that appeal etc, so for allocators that have clear reports and take care of their clients it is as little as 2-3 days max. Finally, we have several automated allocators that you could be using, where you need to just prove you are a human and will receive Datacap.

You mentioned on the call that you have to turn clients away because you cannot onboard them without Datacap - I symapthize, this is an awful situation. Is it clients that would want to store on Filecoin and would be able to make on-chain payments, or your business model is being part of Filecoin network for running the consensus, while offering a more traditional/off-chain storage services?

On the 10x vs 1x conversation, I think there is a point that isn't coming across. There are two, independent issues that people here are pointing out:

The lockup - you have addressed that one, I am not sure I agree with your calculation, but I think you know what we mean by being concerned with 10 times less FIL being locked up for cc sectors.
The rewards SPs get over the transition period: Imagine SP_old who onboarded 1PiB before the transition period. And SP_new who onboards their 1PiB after the transition:
(SP_QAP/Network_QAP) x WinCount x epochs , so:

SP_old's reward per month is: 1000FIL, meaning over the 2.5 years SP_old will receive 30000FIL
SP_new reward per month is 100FIL, meaning over the 2.5 years SP_new will receive 3000FIL

So until the full transition is done, you will have a huge discrepancy in how much rewards will old SPs reveive compared to new ones. This will result in very small incentive to onboard storage to Filecoin, and contradict your goals of making CC sector as profitable as filled ones.

Also, it I'm not sure it would be 2.5 years - because the sectors onboarded on day 1 of the transition period will keep their 10x, and the ones onboarded 3 months into the transition will keep their 7.75x for the whole time etc etc. But I might be wrong here.

In summary, I am not saying that we shouldn't look at making changes to Fil+, FIDL is actively experimenting with an automated Datacap allocation based, where SPs wouldn't need to do any bizdev, and clients don't need to find SPs - instead SPs join a pool, and get deals proposed to them and take on the client data that matches the SLAs they are willing to deliver. All the deals are paid for by the client. We hope that may solve a lot of the issues that we see today, especially that it all runs using Smart Contracts with no human intervention.

10 replies

beck-8 Mar 4, 2026

@martapiekarska I know that fil+ may be much better now than before. But no one likes him anymore. No one believed him anymore. If this were the state of the art when it was first launched, I would retract my above opinion.

This is no longer a technical issue. It's a matter of trust.

Reiers Mar 4, 2026
Author

@martapiekarska - thank you for the detailed engagement, and for the kind words about the SPWG presentation. I want to address each of your points honestly.

On Datacap difficulty

You asked about my direct experience. I've worked with allocators both as a Curio SP and helping onboard smaller operators. You're right that the timing has improved -- 6-7 days is better than it used to be. But the friction isn't primarily about days. It's about:

Knowing the system exists and how to navigate it - most potential SPs I talk to don't even understand the allocator pathway. The very concept that you need permission from a third party to earn fair rewards is alienating.
The prerequisite infrastructure - you need to be set up to receive and store specific datasets, which means infrastructure investment before you've earned a single FIL.
The relationship overhead - even with automated allocators, the mental model is "prove you deserve enhanced rewards" rather than "provide storage, earn rewards."

The clients I've had to turn away weren't Filecoin-native. They were traditional businesses who wanted to store data and pay for it. The conversation goes: "so I need to... apply for DataCap through a notary... to store my own data?" and they walk away. That's not a bear market problem - that's a UX problem baked into the incentive structure.

To answer your direct question: my interest is in building a sustainable SP business that serves real clients with real storage, and earns consensus rewards for securing the network. Daybreak makes both paths viable without requiring permission.

On transition fairness

This is an important point and I want to address it carefully, because I think there's a misunderstanding in the math.

Your example: SP_old (1 PiB, Fil+ 10x) earns 1000 FIL/month while SP_new (1 PiB, CC 1x) earns 100 FIL/month during transition.

That's exactly the current situation. Right now, today, a CC sector earns ~1/8.5th what a Fil+ sector earns per raw byte. Daybreak doesn't create this gap - it closes it over 12 months.

Here's what actually happens during the transition. Under Daybreak, the multiplier applies at the epoch level - it's not locked in at activation. As the multiplier drops from 10x to 1x:

Month	VDWM	Fil+ sector QAP	CC sector share of rewards	CC vs today
0	10x	10× raw	~12% (status quo)	1.0×
3	7.75x	7.75× raw	~15%	~1.3×
6	5.5x	5.5× raw	~22%	~1.9×
9	3.25x	3.25× raw	~38%	~3.2×
12	1x	1× raw	100% equal	8.5×

CC sector profitability improves from day one and accelerates through the transition. There is no point during the 12 months where a new CC sector is worse off than it is today.

Now, you raise a fair point that existing Fil+ sectors retain an advantage during the transition. But that advantage is shrinking every epoch - and it exists TODAY at its maximum (10x). The question is: do we want to stay at maximum unfairness indefinitely, or transition through decreasing unfairness to equality?

@beck-8 - yes, an SP that extends a Fil+ sector for the maximum term before the transition starts will earn higher rewards for that term than a newly onboarded sector. But:

This advantage exists today and is much larger today (full 10x gap vs a shrinking gap)
The sector's QAP decreases as the multiplier transitions down — they don't lock in 10x forever
After 12 months, all new sectors are equal regardless of deal type

The "legacy advantage" is a transition cost we pay once. The alternative - keeping the 10x indefinitely - means paying that cost forever.

On FIDL's automated allocation

I genuinely appreciate FIDL's work on the porep-market and automated allocation. Smart-contract-based allocation without human gatekeepers is a real improvement. But I'd push back on one thing: if the end state is "all sectors earn equal rewards" (which your service-centered economy discussion suggests), then the multiplier itself is unnecessary infrastructure. Why route through a smart contract to get Datacap to get 10x, when you could just... earn equal rewards for equal storage?

The FOC stack (PDP + FilecoinPay + FWSS) already provides the path for paid storage services. SPs who serve real clients earn service revenue on top of block rewards. That's the incentive alignment - not a multiplier, but a market.

On 1x vs 10x aggregate locking

This is the one point I want to engage with most seriously, because both you and @jennijuju raised it.

You're right that reducing effective QAP from 18.5 EiB to 2.17 EiB reduces the Simple component of consensus pledge. But:

The 283M FIL mining reserve burn permanently removes ~14% of max supply. That's a larger supply reduction than any marginal pledge difference.
Under FIP-0081, the Baseline component (70% weight) is unchanged because baseline (114.5 EiB) >> QAP in both scenarios.
The Simple component increases per sector proportionally to the reward increase - so while aggregate locking decreases, locking per unit of useful work actually increases.

I've done the detailed analysis in the locked FIL analysis - the net difference in locked FIL is ~30M in baseline pledge only. The 283M burn dwarfs this.

That said, I hear the concern. This is exactly the kind of dimension that deserves deeper collaborative modeling, and I'd welcome FIDL's analytical capabilities being applied to it.

To sum it up:

We agree on more than we disagree. We both want: less human gatekeeping, more automation, real paid services, and a sustainable SP business model. The question is whether to get there by evolving the multiplier system or by removing it. I believe removing it is simpler, more legible, and reaches the same destination faster — but I'm genuinely open to the analysis showing otherwise.

beck-8 Mar 4, 2026

@Reiers You've been talking about 12 months here. I want to confirm again, let's say I renew for 3.5 years at that time. Will it also become X1 after 12 months? Will the excess pledged coins be returned to me? There's some ambiguity here and I'd like to clear it up.

Or, as 12 months comes, CC rises to the level of DC?

Reiers Mar 4, 2026
Author

@beck-8 - great question, let me clarify exactly how this works.

Short answer: CC rises to meet DC. After 12 months, everyone earns the same per-RBP reward. Existing sectors are grandfathered until they expire or are extended - no mid-life changes.

Here's the timeline:

gantt
    title VDWM Transition (12 months)
    dateFormat  YYYY-MM
    axisFormat  %m

    section Multiplier
    DC sectors: 10x → 1x (linear)     :active, 2027-01, 2028-01

    section CC sector rewards
    CC at ~1/10th of DC reward         :done, 2026-06, 2027-01
    CC rewards rising as DC QAP shrinks :active, 2027-01, 2028-01
    CC = DC (equal per RBP)            :milestone, 2028-01, 0d

Three scenarios for your sector:

When you extend	Verified multiplier at that epoch	Pledge per sector	Notes
Before Daybreak	10x (DC) / 1x (CC)	~1.50 FIL (DC) / ~0.17 FIL (CC)	Current system
Month 6 of transition	~5x (DC) / 1x (CC)	~0.83 FIL (DC) / ~0.63 FIL (CC)	Locked at extension
After month 12	1x for everyone	~1.09 FIL	Equal for all sectors

On pledge return: When you extend a DC sector after the transition, the required pledge is recalculated at the new (lower) multiplier. If your existing locked pledge exceeds the new requirement, the excess is freed. You don't lose anything - it just unlocks.

On CC specifically: CC sectors don't get a multiplier - they stay at 1x throughout. What changes is their share of rewards. Right now, CC sectors compete against 10x-inflated QAP from DC sectors, so they earn ~1/10th per physical unit. As the multiplier drops to 1x, CC sectors earn proportionally more until they reach parity at month 12.

graph LR
    A[Today: 1 CC sector] -->|earns| B[~0.3x fair share]
    C[Month 6: 1 CC sector] -->|earns| D[~0.6x fair share]
    E[Month 12+: 1 CC sector] -->|earns| F[1.0x fair share ✓]
    
    style A fill:#ff6b6b,color:#fff
    style C fill:#ffa500,color:#fff
    style E fill:#51cf66,color:#fff

The transition is smooth - no cliff, no sudden changes. Every sector's economics shift gradually over 12 months.

beck-8 Mar 4, 2026

I think I know better. Those DCs did not change after 12 months. It’s just that the income of CC has been increased to the level of DC. What I understand should be correct.

What I am worried about is that there are no SPs willing to participate at all, so the gradual increase in income within 12 months will be too slow (this time is a bit long. In other words, fairness is still too slow. And DC is still under centralized control.). I think this time is too conservative. I prefer to be more radical (of course I'm not as comprehensive as you think).

martapiekarska · 2026-03-04T10:42:49Z

martapiekarska
Mar 4, 2026

@Reiers, one more thing - Why do you think burning miner reserve will help? It is not counted in circulating supply and it requires a FIP to use, so there isn't a risk associated with having it, because community will be able to stop any usage that would not be aligned with their goals?

4 replies

beck-8 Mar 4, 2026

He can give the community some belief that the team is doing something, at a macro level

Reiers Mar 4, 2026
Author

@martapiekarska - fair question. A few reasons:

"Requires a FIP" is not the same as "safe." The reserve is 283M FIL - ~14% of max supply. Any future proposal to distribute it would create massive sell pressure expectations before it even passes. The mere existence of a large undistributed reserve introduces monetary policy uncertainty that doesn't serve the network. Burning it is a credible, irreversible commitment to predictable supply - the kind of signal that matters to token holders and institutional participants.
It removes a political surface. Right now, anyone can propose using the reserve for anything - and some have (veFIL governance tokens, ecosystem grants, SP subsidies). Each proposal triggers months of debate and governance overhead, even if it goes nowhere. Burning it eliminates an entire category of future governance disputes.
It's been 5+ years. FIP-0093 proposed zeroing the reserve ~20 months ago and is still in review. If after half a decade the community hasn't found a use for 283M FIL, that's a strong signal that no use exists that would command consensus. The responsible action is to remove the uncertainty rather than let it sit indefinitely.

@beck-8 captures the broader point well - it's also about demonstrating that the protocol can make decisive changes. Filecoin has a governance velocity problem. Burning the reserve alongside the multiplier change sends a clear message: we can identify problems, reach consensus, and act.

That said, I hear the argument from both you and @jennijuju that these are separable issues. I'm open to that conversation - the multiplier transition is the higher-priority change. BUT I do think bundling them strengthens the overall case for protocol simplification.

Destore2023 Mar 4, 2026

@Reiers, one more thing - Why do you think burning miner reserve will help? It is not counted in circulating supply and it requires a FIP to use, so there isn't a risk associated with having it, because community will be able to stop any usage that would not be aligned with their goals?

Excellent question @martapiekarska Obviously, political issues cannot be resolved by the community's outcries or votes!

They must be led by political figures. I think we should tag Mr.Bene and bring him in. Obviously, destroying $283 million worth of assets is not a decision that the community of a centrally managed blockchain project can make on its own.

Reiers Mar 4, 2026
Author

@Destore2023 I understand the instinct, but I'd actually push back on this framing. The FIP process is the mechanism for decisions like this - that's what it was designed for.

Precedent: FIP-0014 burned ~4.3M FIL from overestimated block rewards. It went through community governance - discussion, review, consensus - and shipped. No executive approval required.

The mining reserve isn't protected by any special governance rule. It's a vesting schedule in the built-in actors code, same as any other protocol parameter. Changing it requires the same process as any other FIP: community discussion, technical review, and network upgrade.

I think what makes Filecoin valuable long-term is exactly this - that the network's economic rules are decided by its participants, not by any individual. SPs, developers, token holders, researchers - that's who this discussion is for. And it's happening right here.

I'd welcome your thoughts on the substance - both the multiplier transition and the reserve burn.

eastxiao2022 · 2026-03-05T11:05:45Z

eastxiao2022
Mar 5, 2026

With hardware prices skyrocketing right now—and forecasts showing they'll keep rising for the next 1–2 years—current SPs are basically bleeding money and running at a loss. New SPs have almost no incentive to join anymore. The real first thing we need to focus on is how to actually drive up the token's value.

4 replies

Reiers Mar 5, 2026
Author

@eastxiao2022 I hear the frustration - hardware costs up, token price down, SPs running at a loss. That's exactly the situation this FIP is designed to address.

Right now, a CC sector earns 0.000107 FIL/day. Under Daybreak, that same sector earns 0.000910 FIL/day - an 8.5× increase with zero additional hardware, zero datacap, zero notary relationships. The total block reward issuance doesn't change (this is mathematically proven in the simulation), but the rewards are distributed based on physical storage rather than datacap access.

For an SP bleeding money today, the most direct path to profitability is increasing revenue per TiB of storage they already operate. That's what removing the 10× multiplier does - it stops transferring ~89% of your fair share of block rewards to Fil+ sectors.

On token value: I won't speculate on price, but removing a subsidy program that incentivized non-retrievable data, burning 283M FIL of potential future supply, and improving per-sector economics for honest storage providers are the kind of structural fundamentals that matter long-term.

eastxiao2022 Mar 5, 2026

Storage Providers (SPs) are currently unprofitable, yet the proposal seeks to reduce future mining reserves by 283M, a move that appears intended to eradicate the mining community entirely. Moreover, adjusting yields by increasing CC returns while decreasing DC returns is merely a superficial change; it fails to address the underlying issue of SPs operating at a deficit.
Additionally, the current scheme is excessively complex. A more effective approach would be to maintain current reward rates for existing CC and DC sectors while offering a direct 10x reward boost for all newly added sectors. This would clearly demonstrate whether such an incentive is sufficient to attract new miners to the network.

Reiers Mar 5, 2026
Author

@eastxiao2022 A few clarifications:

The reserve burn doesn't reduce mining rewards. The mining reserve (f090) has never been part of the block reward pool. Not a single FIL from the reserve has ever flowed to any SP. It's 283M FIL sitting idle in a locked address since genesis - burning it doesn't change what miners earn today or tomorrow. Daily block reward issuance is completely unaffected.

This isn't "decreasing DC returns" - it's ending an artificial redistribution. Right now, the 10× multiplier doesn't create extra rewards - it transfers rewards from CC sectors to Fil+ sectors. Total daily issuance stays at ~66,249 FIL/day regardless of VDWM. When you remove the multiplier, CC sectors stop subsidizing Fil+ sectors. Nobody loses real rewards - Fil+ sectors just stop taking from everyone else.

On your proposal to give all new sectors 10×: That would actually increase total issuance - the minting formula depends on Raw Byte Power, and inflating the reward multiplier for new sectors would either require changing the minting formula (major protocol risk) or it would just recreate the same redistribution problem at a larger scale. Daybreak achieves the same goal - making new sectors more profitable - without touching the minting formula at all.

The 8.5× CC revenue increase under Daybreak is the incentive for new miners. Same hardware, same storage, 8.5× more FIL. No complexity, no new parameters - just equal rewards for equal work.

https://daybreak-dashboard.org/

kernelogic Mar 31, 2026

offering a direct 10x reward boost

Need 100x boost

lyjmry · 2026-03-05T13:19:39Z

lyjmry
Mar 5, 2026

I will point to two points 1. I support the recovery reward. 2. It is not recommended to destroy 300 million, because the ratio of capital and team in all shares has increased.

9 replies

eastxiao2022 Mar 5, 2026

Don't just look at this from a technical or protocol design perspective; from the standpoint of project governance, why can't (PL, FF, SAFT) proactively burn their own allocations?
Burning their own shares would undoubtedly have a far more positive impact than burning the 283M FIL mining reserve.

Reiers Mar 5, 2026
Author

@eastxiao2022 Because those tokens are already vested and in private wallets. PL's 300M, FF's 100M, and the SAFT tokens -they're owned by individuals and organizations! A governance vote can't burn someone else's private property. That's not how blockchains work, and it shouldn't be.

The mining reserve is different - it sits in a protocol-controlled address (f090) with no owner and no distribution mechanism. It's the only large allocation that governance can actually act on. That's why it's the one being proposed for a burn.

eastxiao2022 Mar 5, 2026

The death spiral is underway; changes to protocol policy cannot stop it.

just-ptrk Mar 5, 2026

@eastxiao2022 stop. don't summon him, j.b., storage jesus, CEO of filecoin.

its an embarrassing ritual we show off every few years here, starting to discuss the teams loot. he will show up, its the only reliably way to summon him. then he will make some kind of argument thats technically complete nonsense around "my precious" and then shuffles away to the dark like gollum again.

its his. he stole it fair and square. he wrote a paper stating this. no one can take this away! technically - nonsense. but that never stopped anyone around filecoin.

eastxiao2022 Mar 5, 2026

To be, or not to be: that is the question

lyjmry · 2026-03-05T16:04:11Z

lyjmry
Mar 5, 2026

The original mining allocation was 70%, not 55%.

1 reply

Reiers Mar 5, 2026
Author

@lyjmry The 70% figure is misleading - it groups two very different things:

55% (1,100M FIL) → block rewards that miners actually earn by sealing and storing. This is real, flowing, earned FIL.
15% (300M FIL) → the mining reserve, sitting untouched in f090 since genesis. Never distributed. No plan to distribute. Not part of the block reward pool.

Miners have never received a single FIL from the reserve. It doesn't flow through the minting formula, it doesn't show up in block rewards, and no mechanism exists to send it to SPs. It's 283M FIL in a locked address that has sat idle for 5.5 years.

So while the whitepaper says "70% for mining," the reality has always been 55% for miners and 15% in a vault that nobody can open. Burning it just makes the official number match what was always true.

lyjmry · 2026-03-05T16:22:17Z

lyjmry
Mar 5, 2026

This is a failed project, we should redesign and develop a new project, let FIL go to 0

0 replies

lyjmry · 2026-03-05T16:24:37Z

lyjmry
Mar 5, 2026

This makes it suitable for high-availability, high-performance storage projects, and integrates AI computing.

0 replies

Daybreak: Restore Equal Sector Quality and Burn Mining Reserve #1238

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FIP-XXXX: Daybreak — Restore Equal Sector Quality and Burn Mining Reserve

Simple Summary

Abstract

Change Motivation

Background: Five Years of Debate

The 10× multiplier does not increase total block rewards

Simulation confirms identical issuance

Per-sector economics improve substantially

The baseline gap is now structural

Fil+ outcomes have diverged from intent

Mining reserve has no distribution mechanism

Specification

1. VDWM Transition

2. Mining Reserve Burn

3. FIP-0003 Quality Multiplier Sunset

Design Rationale

Why a 12-month linear transition?

Why not slow the baseline growth?

Why combine VDWM reduction with mining reserve burn?

Why grandfathering instead of retroactive adjustment?

What makes this FIP different from prior proposals?

Backwards Compatibility

Test Cases

Unit Tests

Integration Tests

Security Considerations

Consensus security improves

Flash power attacks are economically irrational

Quality arbitrage is bounded and diminishing

Mining reserve burn has no protocol interaction

No new attack vectors

Incentive Considerations

Who benefits

Who is affected negatively

Transition timeline

Product Considerations

Impact on existing storage products

Future deal incentive mechanisms

Implementation

Required changes

Gas impact

Implementation tracking

Acknowledgments

References

Copyright

Replies: 19 comments · 60 replies

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Fatman13 Feb 28, 2026 Collaborator

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Reiers Feb 28, 2026 Author

ROI during the transition (head/middle/tail)

Collateral during transition

DC governance incentive during transition

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Reiers Feb 28, 2026 Author

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irenegia Mar 2, 2026 Collaborator

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Replies: 19 comments 60 replies

Fatman13
Feb 28, 2026
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irenegia
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