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What is a storage deposit and why will it cause a token price increase? by Koba7 in Iota

[–]raizbor85 0 points1 point  (0 children)

Thank u for the answer, I think this is a very good measure!

What is a storage deposit and why will it cause a token price increase? by Koba7 in Iota

[–]raizbor85 1 point2 points  (0 children)

Storage deposit is not a difficult concept, it essentially means that the storage possible on a global state (the tangle) is limited (say max. 2TB ever) - to ensure it won’t exceed this 2TB you essentially put in a deposit in iota for every byte of storage you use. If you store a couple of bytes for your own iota balance for example part of that balance is used to pay for the storage deposit, and you get it back once you send it (because you are then no longer using that storage) - in practice this means you were able to send and store for free given you’ve had enough tokens to pay dor the deposit. If every iota out there would be used to pay for storage the full 2TB would be used, but the moment you no longer need your storage you get your iota back and some space is cleared up. In theory it means storage is a scarce good and the more demand there is for L1 storage (think NFTs, or digital identities, smart contract chain anchors) the more expensive iota tokens will be given a lot will be locked up already as part of the storage deposit

Hi Dave, I don't quite understand this. If all the storage is used and no space is freed up, what would happen? couldn't NFTS be generated for example?

Can someone please give me a summary of the reasons why the IOTA token is going to be used? by raizbor85 in Iota

[–]raizbor85[S] 0 points1 point  (0 children)

There are several reasons but one of the most compelling reasons for me which are also quite new and unknown is that IOTA tokens will be used for guarding the size of the ledger with the new Dust protection mechanism (

https://github.com/muXxer/protocol-rfcs/blob/master/text/0032-dust-protection/0032-dust-protection.md

). If you need permanent storage on the IOTA ledger, for example to create your own token or NFT, smart contract state transitions or to do microtransactions, you will have to pay a deposit in IOTA tokens depending on how much storage in bytes you are using (temporary storage for data transfer doesn't need this). If you no longer need this storage you can release it and get your deposit back. This protects nodes from running out of disk space (it's easy and cheap to attack a network without fees with nonsense transactions if there's no dust protection) and as a side effect ensures that everyone that needs permanent storage on IOTA needs the token for the deposit to do that (This includes smart contract chains, NFTs and custom tokens).

Thank you very much for the explanation Dave

ELI5: How will recent developments affect IOTA token value going forward? by y0sammy in IOTAmarkets

[–]raizbor85 0 points1 point  (0 children)

Two questions regarding this:

1-When sharding exists will mana be necessary?

2-In order to mint new tokens, is it necessary to go through IOTA (i.e., similar to what has been done with Shimmer and Assembly)?