Proposal: Using a Harberger Tax in the Global State Machine

  • The state memory.
  • The global state machine nodes.

The State Memory

Developers will need to utilize the global state memory for their apps to update their apps’ status. TEA Project app developers must contend with the fact that the state memory is a limited resource and will have costs associated with using it.

  • Devs will need to purchase the state memory token issued on a bonding curve, where the privilege of using 1 MB of state memory is denominated as one token’s worth.
  • There’s also an associated state memory tax calculated as follows: the current state memory token price x 1% (the tax percentage is determined by the DAO). This amount is calculated every day (24 hours).
For every 1 token (equalling 1 MB of state memory), devs are taxed (the token price) * 1% every day.

Consequences of the State Memory Tax

Note that the state memory tax is the sole source of the global state maintainer nodes’ revenue, but it doesn’t go directly to the node owners. The revenue is split between being paid out as dividends to the global bonding curve token holders (where the CML node owner probably owns a large share) and as public service rewards to hosting CML. So being a global CML node owner (or a staker to these nodes) makes one very interested in how well the TApps are doing in the TEA ecosystem.

Global State Machine Maintainer Tax

As noted above, the global state maintainer nodes receives an even share of the state memory tax paid by TApp developers. But this revenue isn’t free in that they have to pay a tax that’s based on the following formula:

Some Practical Consequences of the Global State Machine Maintainer Tax

The self-assessed value of the global state maintainer node is what’s controlled by the global CML owner and through which the Harberger tax dynamics operate. If the CML owner sets too high of an assessed value, they end up paying unnecessarily high taxes. If they set it too low, then an opportunistic buyer can swoop in and pay a bargain price to claim the CML. The self-assessment is not only for tax purposes, but an actual price at which others in the ecosystem can buy the CML away from you.

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