Filecoin: CC sector upgrade guide and model research for storage providers

Original source: Filecoin Network

TL;DR

Upgrading existing CC sectors seems to be one of the best opportunities for Filecoin Storage Providers (hereinafter referred to as “SPs”): if verifiable transactions and existing CC sectors are available, in order to minimize new costs, SPs may Consider upgrading these sectors instead of encapsulating new ones.

In general, the cost difference between upgrading a CC sector and adding a new transaction-native sector is small and should not prevent SPs from considering an upgrade strategy.

Results may vary by SP, so we invite you to do your own research.

background

In this article, you will see:

• Different storage pipelines currently available in the Filecoin network
• Expected cost models with and without capture

In the Filecoin network, storage providers can encapsulate two different types of sectors:

• CC sector: Data is set to zero by default
• Transaction sector: get data from storage client

Thanks to the introduction of FIP 0019 (“SnapDeal”) and the ReplicaUpdate method, it is now possible to bring data into CC sectors. This means that storage providers who want to store user data currently have two different options:

• Encapsulation of transaction sectors (i.e. encapsulation of new sectors with user data)
• Upgrade CC sector through SnapDeal to introduce user data. we distinguish

1. Upgrade existing CC sector
2. Encapsulate new CC sector and upgrade immediately (CC sector upgrade pipeline)

Our model aims to compare all the different strategies of storage providers for storing user data.

result

Upgrade existing CC sector VS transaction sector

Based on our model, upgrading existing CC sectors appears to be one of the best opportunities for Filecoin storage providers.

Our model predicts that the cost of upgrading an existing CC sector is equal to or even lower than the cost of adding a new transaction sector to the network (assuming no FIL lease costs, nor accounting for past packaging costs of existing CC sectors). The July 7, 2023 cost variance is $0.05 per 32 GiB sector ($1.6 per TiB). Since this is based on dynamic calculations (especially gas costs), the figures may vary. Additionally, future protocol changes (see below) may exacerbate this difference to the benefit of CC sector pipeline upgrades.

CC Upgrade Pipeline VS Trading Sector

It is also possible to start with a CC sector and upgrade later if you do not have access to verified transactions.

In fact, the difference between the CC sector upgrade pipeline and the transaction native sector pipeline is not significant. Also, in our current model, we don’t account for miscellaneous expenses such as electricity, bandwidth, labor costs… Given that the difference in total cost after introducing miscellaneous expenses will be negligible, we expect the actual difference to be much closer.

Further observe the validity of verified transactions

If there is a verified transaction, but no existing CC sectors are available, the storage provider should consider wrapping new sectors with the verified transaction.

Future Scenario

Possible future changes in the C sector upgrade pipeline

CC sector acquisition is cheaper

Our model assumes that the cost of encapsulating a CC sector is the same as a transaction sector. If it is assumed that the cost of acquiring a CC sector is lower than the cost of encapsulating a new transaction sector, then the profit of the CC sector pipeline will be close to (or even higher than) the profit of the transaction sector. Factors that may make acquiring a CC sector less expensive than encapsulating a new transaction sector may include:

• SaaS pipeline/improvement focused on CC sector
• Prepackaged sector market

Gas accounting for transaction and sector (re)activation

One of the differences that stands out in the comparison of CC sector upgrades and trading sectors is due to gay fee accounting. In particular as of June 7, 2023:

• A single sector with transactions does not need to pay the gas fee for sector activation and transaction activation (subsidized by Cron).
• Sectors packaged through the CC sector pipeline pay sector activation and transaction activation gas fees.

This is a flaw in the protocol that prevents a fair comparison of the two pipelines. The gas accounting activated for rebalancing transactions may change in the future. For example, check out this discussion. In this case, we expect the cost of the CC sector upgrade and transaction sector pipeline to be closer.

Reduced SnapDeal Cost

Another option to improve the CC sector upgrade pipeline is to reduce the verification cost of the SnapDeal protocol. Attempts have been made to solve this problem (see FIP discussion 645).

Model

In our model, we study various strategies (i.e., pipelines) that can be used to store data in the Filecoin network. The model uses basic SP resources as model input and relies on some realistic assumptions to calculate estimated costs and returns for each pipeline.

Assumptions

• 32 GiB sectors
• The transaction size is the same as the sector size (ie 32 GiB). Note that this is consistent with the status quo (average verified transaction size is about 30 GiB, see relevant stats here).
• Transactions are only validated, assuming the transaction duration matches the remaining sector lifetime at activation (i.e. sectors can be extended if needed).

define

Check out this page for more details.