Sui Chief Economist Discusses Blockchain Economic Model Design

Recently, a blockchain economy expert shared his insights on the design of network economic models. This expert was originally an international trade researcher, focusing on global value chains and supply chain management. He believes that blockchain technology is highly relevant to supply chain management, as it can transparently track the product manufacturing process, which prompted him to enter the Web3 field.

When designing a blockchain economic model, the key is to balance the interests of the three parties: validating nodes, token holders, and users. Validating nodes want to earn higher gas fee revenues, users want lower gas fees, while token holders are in an intermediate position. The core of the design is to find the appropriate level of gas fees to achieve a balance of interests among all parties.

The expert pointed out that the uniqueness of a certain blockchain platform lies in its horizontal scalability. When demand increases, validation nodes can increase block space, thereby maintaining lower gas fees. This is different from other fixed-supply blockchains, which experience a surge in gas fees when demand rises.

The platform also introduced a reference gas price mechanism, which increases market transparency and predictability. Validation nodes need to publicly disclose the transaction fees they are willing to accept, with the reference price set at two-thirds of the fee level that validation nodes are willing to operate at. This competitive mechanism ensures the sustainable operation of validation nodes while also capping the gas fees.

Another innovation is the design of the storage fund. Users need to pay a permanent storage fee in advance, which is retained and proportionally adjusted to the staking rewards of the validating nodes to compensate for their storage costs. If the data is no longer needed, users can also delete it and receive a partial refund.

Regarding inflation and deflation, experts emphasize that this involves not only token supply but also the level of network activity. If the rate of on-chain activity growth exceeds the emergence of new tokens, it will create pressure to lower gas prices; conversely, there will be pressure to raise gas prices.

The token supply of the platform is capped at a target of 10 billion tokens. Future economic development will depend on the comparison between the growth of network activity and the speed of token unlocking. Experts believe that this design provides certainty for the long-term economic operation of the market.

Finally, experts suggest that as the use and development of the network progresses, the token economy may need adjustments. For instance, recent issues in storage may require fine-tuning of the storage fund design. He emphasized that the process of practice testing theory is very interesting, and the ultimate goal of the token economy is to align the incentives of all participants towards a prosperous network.