Last week, Marcin Benke, advisor to our R&D team, presented for the first time, at EthCC (Ethereum Community Conference) in Paris - our latest research on price models.
Golem has been dedicating substantial efforts to R&D lately, as you may be able to see. Last week we published the Model 0 post, and our new Marketplace was recently implemented in the latest software version 0.19.0. You will also hear from this team again soon in our Graphene update.
Last year we presented our mid-term goals roadmap, where we highlighted the R&D team as responsible for building tools, models, and mechanisms that are useful, not only to Golem but to the whole ecosystem. Model 0 and Pay as You Use Golem, are part of these efforts and are generalized enough that can be implemented in other p2p networks, even though Golem is our focus.
Back to “Pay as You Use Golem” – this is a very simple yet effective new model for p2p marketplaces, looking for fairer models for their economies. Let’s think of it in the Golem setting: both requestors and providers need the underlying economy of the network to have a pricing model that not only “satisfies them”, but also makes sure “cheating” by bad actors is reduced as much as possible.
At the moment, Golem uses the “Fixed Price” model, where the requestors in the network fix prices and providers accept. After consideration, we concluded this is not a fair model for p2p networks. Parameters change all the time: task sizes, job value, and it is not possible to make these estimations without knowing the details. Additionally, workers would need to add a “risk premium” to ensure that they would not work in vain.
The Time and Materials price model is a better alternative. When the task size is unknown it can adapt to it, and if both ends are honest, it is a fair model. However, if this is not the case, one risks overcharging by dishonest workers, and at the same time, requestors might decide not to pay at all for the performed task.
Pay as You Use is a model based on Time and Materials, where the providers charge for the resource usage (eg. CPU time). Providers offer prices per resource unit, and to compare offers, requestors rate the Providers’ efficiency.
This new pricing model is not only fairer, but also enables new use cases in Golem, as WebAssembly, so Pay as You Use will be introduced into Golem’s mainnet within the release of our WASM use case (yes, we will explain this soon! Good things come for those who wait). We have been running simulations for this new model, and we are very satisfied with the results. However, we continue our work improving this solution as well as trying out more game theoretical approaches.
Please check Marcin’s presentation for the full explanation - slides here:
As mentioned above, Golem is committed to the improvement and advancement of technology. P2P networks and computation platforms play an essential part in this wide industry. As we build leading-edge technological components for our platform to be the best fit for computations, our economic solutions must be at the same level. Stay tuned.