Dear Human nodes,
Today we are announcing a change in the fees for various operations on the Humanode blockchain.
As most know, one of the core ideals that Humanode is built on is the Cost-Based Fee System, allowing the network to run efficiently at a low stable cost while being able to provide the Validators the fees required to run the nodes and give them additional revenue on top of that.
We believe that the current fee systems for most blockchains are broken, and hinder the development of actual decentralized financial systems that can replace, or actually work side by side with the old centralized fiat currencies. This is where the cost-based fee system comes into play.
Naturally, the cost-based fee system cannot be built overnight, and it can’t run or be effective just because it looks great on paper. Armchair theories are about as effective as a 3-year-old claiming that the healthiest food in the world is chocolate cake and demanding that all meals reflect that fact.
The implementation of the cost-based fee system is a step-by-step approach, and it will be adjusted based on reality as we move forward.
Change in the Fee System
As the first step on this path, based on the actual operation of the blockchain, rather than the absolute minimal cost assigned at the beginning, the team assigned a “weight” to all actions that require computing power to execute, such as authentication, transfer of tokens, claiming tokens, etc.
The fee was normalized around the weight of the balance transfer call, which was set to be around 0.01 HMND for a simple balance transfer. Technically speaking, the 2 factors that affect the cost are the effective length of the extrinsic (in bytes) and the weight of the call.
In short, based on the calculation of the actual cost to the network, and by adding “transactional fees” that will be distributed to Humanode validators on top of that, the new fees will reflect the current reality.
For example, the in-house transaction fee from one HMND wallet to another which was originally set at 0.000000000001 HMND, will be raised to 0.01 HMND. (Based on the current market price, 0.01 HMND is roughly the equivalent of $US 0.00015, so compared to, say most other blockchains, it is as cheap as can be)
In general, how big the single transfer value is, does not change the transaction price. You can send 1 HMND, or you can send 1,000,000 HMND and the transaction cost will still be 0.01 HMND. Of course, fees may change depending on the transaction type or volume, such as for batch transactions. In any case, the fees will be calculated based on the actual cost, then will be shown on the UI, and will be clear, visible, and stable.
Authentication fees will be set to be free for the foreseeable future to boost adoption, and the only time a fee should apply to the average user who only runs a validation node or uses it to transfer fees, or perhaps participates in the network as an investor, would be for sending funds (0.01 HMND), transactions for setting keys to launch their node (roughly 0.3 HMND), and for claiming (unlocking) tokens (0.12 HMND).
Why the change?
In order to run the Humanode network, and pay validators the current network is being subsidized by the treasury (as in a special fund dedicated to being able to subsidize validation operations for a minimum of 2 years) of the Humanode network.
However, as Humanode is being listed in various centralized exchanges, with partnerships and real-life implementations of the Humanode layer 1 technology coming to fruition, and with the added fact that we are only a few short months away from becoming fully EVM compatible, we came to the conclusion that this was the time to start building the foundation of the cost-based fee system by calculating the actual cost of operation.
Our hope is that through this step, we will be able to move from subsidizing the fees for the validation to being able to cover the costs through actual fees earned from the network, allowing us to expand the validation pool, and eventually be able to share the profit to be earned from the application of the technologies and applications of them.
As stated, this is our first step. Adjustments will surely come based on a larger pool of actual data. However, the road to greatness always starts with the first step, and can only be attained by continuing to move forward as you apply the knowledge gained on the path.
The Humanode Core Team