qip-0011: Paying for Account State Usage

README.md

@@ -18,5 +18,6 @@ Those proposing changes should consider that ultimately consent may rest with th
 | [8](qip-0008.md)  | Consensus (hard fork) | Dynamic Tree Expansion           | wizeguyy       | Standard | Draft  |
 | [9](qip-0009.md)  | Consensus (hard fork) | Interlinks                       | gameofpointers | standard | Draft  |
 | [10](qip-0010.md) | Consensus (hard fork) | Network Object Identifiers       | wizeguyy       | standard | Draft  |
+| [11](qip-0011.md) | Consensus (hard fork) | Paying for Account State Usage   | wizeguyy       | standard | Draft  |
 
 <!-- IMPORTANT!  See the instructions at the top of this page, do NOT JUST add QIPs here! -->

qip-0011.md

@@ -0,0 +1,128 @@
+```
+ QIP: 11
+ Layer: Consensus (hard fork)
+ Title: Paying for Account State Usage
+ Author: wizeguyy <[email protected]>
+ Comments-Summary: No comments yet.
+ Comments-URI: https://github.com/quainetwork/qips/wiki/Comments:QIP-0011
+ Status: Draft
+ Type: Standards Track
+ Created: 2024-04-01
+ License: BSD-2-Clause
+```
+
+## Abstract
+This QIP proposes a mechanism for paying for the state used by an account in
+the state tree. State pricing is dominated by the disk IOPS necessary to
+load/store trie nodes to perform state root updates. Therefore, we price
+account slots logarithmically according to the size of the account trie, and
+let the market drive the price through its ability to buy/sell account space.
+
+## Motivation
+As the popularity of a blockchain grows, the data necessary to maintain the
+state of each account grows. This state trie growth degrades performance, as
+the cost of recomputing state root updates becomes the dominant processing cost
+associated with processing a transaction.
+
+Given the material costs associated with account slots, the protocol needs to
+impose that cost on users to prevent unsustainable state usage. Because these
+costs are born by the entire network, and not simply the transactor, it is not
+sufficient to impose this cost in the form of transaction fees. A long-term
+cost must exist, proportional to each account's impact on the state tree and
+the duration of that impact (i.e. not just at the time the transaction is
+processed).
+
+## Rationale
+The complexity to update the state root is proportional to the number of
+accounts in the state tree. Since we use Patricia Merkle trie (PMT) with its
+extension node optimization, the tree complexity is rarely worst-case, but for
+the reader's intuition, the worst case update cost is bounded by its radix-16
+tree update cost: $O(log_{16}(N))$ for $N$ accounts. In the case of a PMT, the
+physical limitation is often the number of disk IOPS necessary to update each
+database record for each trie node.
+
+### Letting Markets Decide the Price
+Since node operators may be running any number of hardware configurations, with
+different CPU, memory, storage, or network constraints, it is impossible to
+pick a concrete price for any of these resources that makes any sense. In fact,
+even if we could, the concrete number selected today may be very different as
+node operators upgrade hardware or experience failures over time. The solution
+to this, is to expose these limited resources to the market so that market
+participants can decide the price of these resources based on each's own
+subjective preference.
+
+To accomplish this, we build the protocol to enforce account prices
+according to the current size of the account trie. Then we make it possible to
+buy and sell account slots back at whatever the current price
+is. 
+Every account must
+pay for its index in the PMT, but it may sell its account space back if it
+no longer requires it. This accomplishes two things:
+
+1) The market determines efficient price for account slots
+
+2) Users are incentivized to clean up the state trie by destroying their
+accounts when they no longer need them.
+
+An important thing to consider, is that Quai's design has the ability to scale
+and add more capacity if these limits end up being too small. If, for example,
+speculators buy up too many account slots to resell them to future buyers, they
+run the risk of increasing block processing latency, which through
+[QIP-0008](qip-0008.md) will ultimately lead to the addition of more chains
+with more resources. If this happens, speculators will have to compete with
+these newly available resources, which would harm their speculative investment.
+So there is some negative feedback here, which incentivizes speculators to
+participate and help determine market pricing, without fully consuming
+resources that would trigger a trie expansion. In fact, when the network gets
+close to that point, there is a strong incentive for account holders to sell
+back any account space they no longer need, which helps balance resource usage
+as the network scales.
+
+## Specification
+### Account Pricing
+Every new account added to the tree must pay for its address space. The cost of
+this address space must increase as the number of addresses increases. This
+will create negative feedback: speculators will occupy address space with new
+accounts when its cheap, and destroy their accounts when if it becomes
+expensive. This balance of speculator preference with user demand, is how the
+market determines the appropriate address space price.
+
+To achieve this, we use the radix-16 computational bound described above, to
+set the account slot price. The price function is:
+
+$$ P_a = K_a* \lfloor log_{16}(N) \rfloor $$
+
+where $P_a$ is the price to create or sell an account slot in Quai per account,
+$N$ is the total number of accounts in the trie, and $K_a$ is a constant
+scaling factor chosen to adjust price responsiveness to trie size.
+
+#### Choosing $K_a$
+We choose $K_a$ to set a Schelling point about a reasonable acceptable trie
+size, while understanding that the actual size will again depend on the
+subjective demand for account space. We choose 1 billion (2^30) accounts per
+chain as a reasonable upper bound, and we choose 0.1 Quai per account to be a
+high cost which will lead to reduced demand in the account space market. 
+
+We choose:
+
+$$ K_a = 0.1*\frac{Quai}{account^2} $$
+
+$$ \approx 9.31*10^{-11} \frac{Quai}{account^2} $$
+
+### Protocols for Buying and Selling Account Slots
+ For a new account to be created, enough Quai must be sent to cover the account
+ creation price $P_a$. The new account will be credited with the balance of the
+ transaction minus the creation price, $P_a$. Any transaction to a new account,
+ which does not satisfy the creation price, will fail.
+
+Conversely, to sell account space back, we provide a precompiled contract with
+a destruction method. The destruction method will allow the user to provide a
+"beneficiary transaction", which may transfer the balance including the sale
+price of the account (along with optional TX data) to any other address in the
+trie. Upon successful execution of the transaction, the account will be deleted
+from the state trie.
+
+Contract address and ABI TBD.
+
+## Copyright
+This QIP licensed under the BSD 2-clause license.