December 8, 2023
SKALE Chain Pricing Proposal Passed - Revolutionizing Blockchain Sustainability
The SKALE Improvement Proposal (SIP 1) for SKALE Chain Pricing has passed, ushering in the future of blockchain economic sustainability.
When it comes to the growth trajectory of decentralized applications, three factors are paramount: cost predictability, scalability, and accessibility. With the approval of the SIP 1: The Addition of SKALE Chain Pricing, SKALE introduces an innovative solution that utilizes chain subscription fees, offering a unique architecture specifically engineered to tackle these challenges and benefit both developers and end-users. The introduction of chain pricing provides an extra revenue stream for validators, allows dApp developers to plan financially, and takes the burden of gas fees off of users, permanently. This marks a step forward in the evolution of the SKALE Network’s sustainability and scalability as the world's fastest blockchain.
Decoding the Challenges in dApp Growth
In the journey of dApp growth, developers face three primary hurdles: high gas fees impacting user adoption, unpredictable costs affecting financial planning, and scalability issues that can limit an application's performance. Let’s unpack these challenges.
High Gas Fees
While high gas fees may not be an issue for dApp development per se, they do represent a barrier for user adoption, especially during peak-demand periods. This is particularly true for dApps deployed on the Ethereum blockchain, where high transaction fees can deter potential users.
Traditional blockchains often have variable gas fees, which consequently introduce a layer of financial uncertainty for dApps. This fluctuation in costs makes long-term financial planning and acquisition of users challenging, thereby hindering stable growth for decentralized applications.
Even when dApps are well-designed, they can face challenges in scaling to meet user demand due to the inherent limitations of traditional blockchains. These limitations can result in slow transaction times and a compromised user experience.
How SKALE Chain Pricing Changes the Game: A Predictable and Scalable Growth Model for dApps
When Chain Pricing is implemented, SKALE’s architecture will have a multitude of unique features that collectively address the issues of cost predictability and scalability. For starters, developers can deploy dedicated SKALE chains for a flat monthly fee, based on network utilization. This feature not only simplifies budgeting but also provides a predictable cost structure that lends itself to more effective long-term financial planning. Additionally, thanks to these chain pricing payments to validators, the burden of gas fees is sustainably lifted from users.
In the traditional business world, overhead costs are a consistent line item that businesses can plan around. The SKALE chain subscription fee essentially acts as the overhead cost in the dApp development world, allowing for better resource allocation and financial planning compared to the variable costs associated with traditional blockchains.
As stated earlier, the chain subscription fee is based on network utilization. Chain pricing will start at value of $3,600 USD per SKALE Chain per month in $SKL. Chain pricing will increase as the utilization percentage increases, but will not impact chains that have made pre-payments as their price is locked in.
As the network matures, SKALE's chain pricing will instead operate on a dynamic scale, where the cost for each additional chain increases incrementally as the number of available nodes remains constant. This incentivizes the expansion of the network through the addition of more nodes, ensuring that costs for developers remain manageable. This sliding scale of pricing is designed to adapt as the network grows, aligning costs with resource usage and network demand. In the future, as network utilization rises, this pricing model will mature to dynamically adjust chain prices, fostering a sustainable ecosystem for both validators and developers.
For those interested in delving deeper into this mechanism, get more insight from the dedicated governance proposal.
Benefits of SKALE Network Chain Pricing Model
Predictable Financial Planning
The flat monthly fee structure is a cornerstone feature for developers. It not only eliminates the stress of variable costs associated with traditional blockchains but also establishes a predictable financial landscape. This predictability frees developers to allocate resources more efficiently, make informed decisions about scaling, and engage in proactive long-term planning, with the ability to pre-pay for chains up to 24 months. Essentially, it turns what is often a financial juggling act into a manageable, forecastable budgeting exercise.
Fee-Free User Experience
User satisfaction plays a crucial role in the success and adoption of any application, decentralized or not. One of the unique features of SKALE is the zero-gas fees for end-users, made possible by the flat monthly fee paid to validators by dApp developers. The overall architecture of SKALE also ensures faster transaction speeds, further contributing to a seamless user experience that encourages repeat usage and long-term engagement.
Focus on Development
By solving two of the biggest hurdles in dApp development—cost and scalability—SKALE allows developers to shift their focus back to where it truly matters: the application itself. No longer burdened by the challenges of fluctuating gas fees and unpredictable scalability, developers can invest more time and effort into enhancing features, improving security, and iterating based on user feedback.
Sustainable Economic Model
On most other blockchains, gas prices are costly and unpredictable, or gas fees are subsidized by the dapps/blockchains themselves. Both of these models are unsustainable long term. SKALE’s chain subscription model brings a sustainable economic model to blockchain - one where there are zero gas fees for users without any gas subsidies needed.
Pioneering the Next Wave of dApps with SKALE
SKALE Chain Pricing is set to go live on January 1, 2024. By providing a solution to the problems of cost unpredictability and scalability, SKALE empowers developers to build more robust, user-friendly, and financially viable dApps. Chain pricing allows for zero gas fees for users, taking the guessing games out of blockchain, paving the way for mass adoption.
Check out the Snapshot proposal to get into the details of what’s coming on SKALE.
SKALE is the world's fastest blockchain, designed for fast, secure, user-centric Ethereum scaling. SKALE chains offer zero gas fees to end-users and have advanced features such as ML/AI smart contracts, on-chain file storage, interchain messaging, zero-cost minting, and enhanced security features.
The SKALE Network enables developers to deploy their own EVM blockchain in minutes without sacrificing speed, security, or decentralization. Welcome to the SKALEverse.