How do Proposal Fees work?

What are Proposal Fees?

Proposal Fees are incurred when people want the blockchain data network to perform some services. These requests on the network are Proposals. On the BeefLedger Proof of Authority (POA) Network, these Fees are levied in $BEEF.

Types of Activities

There are three main types of activities, which can incur a cost to users. These are:

• Data state updates - this is when someone wants to add a new asset, or add a new transaction or additional asset-related data to the database;

• Community attestation - these are specific processes by which, in addition to the multisig protocol-driven update approval process, a proposer can invite the community as a whole to review and attest to the state update; and

• Marketplace transactions - this is where assets exchange hands.

What are the fees and how are they distributed?

Data State Updates

Data state updates incur a standard fee. All state updates incur the same fee. At present, the fee is set and hard-coded by the BeefLedger development team at 1 $BEEF / state update proposal. A future iteration of this will be to enable the community as a whole to make determinations of fees.

To support this, our present framework includes the following main parts:

• Fee levels are automatically increased in accordance with the applicable Consumer Price Index10 at the time. This condition notwithstanding, the applicable Fees is the prerogative or the members. Fee levels are determined by members from time to time.

• Proposals to reduce fee levels require a super majority vote of members and a majority of votes of Nodes.

• Proposals to increase fee levels or introduce additional fees for network services require an absolute majority vote of members to be accepted for implementation.

Data State Updates: How are the fees distributed?

Data State Update fees are paid to the BeefLedger treasury. At the end of each month, we propose that a proportion of net proceeds is distributed pro rata to operators of Sealer Vaults.

Community Attestations

Community attestations mechanisms are designed to solicit a form of social consensus based on economic reasoning.

When a proposal for a community attestation is made, a proposal fee is paid to the network treasury (smart contract). Members participating in the attestation then submit a vote fee when they wish to vote on whether a proposal is affirmed or rejected. The vote fee functions as a reputation stake. The vote fee is returned if the member’s vote = the majority decision. The vote fee is forfeited to the network treasury if the member’s vote = the minority decision.

Community Attestations: How are the fees distributed?

For members whose vote = the majority decision, they receive their vote fee back (refunding the stake) and a pro rata distribution of the forfeited reputation stake and 50% of the proposal fee; the remainder 50% is paid to Sealer Vaults (25%) and the BeefLedger treasury (25%).

Marketplace Transactions

Listing products (that have been tracked on the Asset Tracker) to the Marketplace incurs zero upfront fee. A fee is payable when there is a successful transaction (sale).

Marketplace Transactions: How are the fees distributed?

Marketplace transactions fees are paid to the BeefLedger treasury. At the end of each month, a proportion of net proceeds is distributed pro rata to operators of Sealer Vaults.