# (WIP) Introducing AutoCap: An Automatic DataCap Allocator Based on On-Chain Activity

At [CryptoEconLab](https://cryptoeconlab.com/), we've built [**AutoCap**](https://filautocap.xyz/), a system that enables Storage Providers to access Filecoin Plus (FIL+) DataCap through a transparent, automated, and activity-based process.

AutoCap allocates DataCap based on **verifiable on-chain economic activity**, removing the need for manual applications or subjective approval processes.

## What is AutoCap?

Under the current Filecoin Plus (FIL+) model, DataCap is typically allocated through a **permission-first process**.

A client applies to a DataCap Allocator, the allocator verifies the client’s dataset off-chain, and DataCap is granted upfront. The client then uses that DataCap to make verified storage deals with Storage Providers, who benefit indirectly through the verified deal power multiplier.

AutoCap pivots this logic.

Instead of requesting DataCap in advance, participants **prove real, verifiable economic activity on-chain first**, and DataCap is distributed automatically as a reward.

AutoCap is a **round-based DataCap allocation system** that rewards participants proportionally to their contribution to the Filecoin network, measured by **FIL burned through the settlement of Filecoin Pay rails**.

Each round defines a fixed amount of DataCap to distribute. Participants who generate FIL burns during the round receive a share of that DataCap proportional to their contribution relative to other participants.

Conceptually, AutoCap retains DataCap as the incentive, but changes the proxy for value:
- In the traditional FIL+ flow, value is inferred through **prior verification and approval**
- In AutoCap, value is measured through **observable, on-chain economic contribution**

This results in an **action-first, reward-later** model, where allocation is derived from behavior rather than permission.

## How Does AutoCap Work?

AutoCap operates in **discrete allocation rounds**. Each round defines a self-contained accounting period during which economic activity is measured and DataCap is distributed.

Each round is parameterized by:
- A fixed **start time** and **end time**
- A **registration fee**, paid in FIL
- A fixed **total DataCap pool** to be allocated at the end of the round

### Rounds

The round lifecycle consists of three protocol phases:
1. **Registration** ;
2. **Contribution**;
3. **Allocation** and **Distribution**.

Rounds are independent from one another. Activity in one round does not carry over to the next, and participants must explicitly register for each round they wish to participate in.

This design ensures:
- Clear accounting boundaries
- Deterministic allocation outcomes
- No retroactive effects across rounds

### 1. Registration

When a round opens, participants can register through the AutoCap Dashboard by:

- Connecting a Filecoin-compatible wallet
*(this wallet becomes the **Participant Address** tracked for on-chain activity)*
- Paying the registration fee from that wallet
- Providing a **DataCap Actor ID** (`f0xxx`) where any allocated DataCap will be sent

Registration establishes the binding between measured on-chain activity and the DataCap recipient for the round.

**Important:** Registration defines two distinct address roles:

- **Participant Address (wallet address)**
This is the address from which **on-chain activity is measured**.
Only activity originating from this address is counted toward the round.

- **DataCap Actor ID (`f0xxx`)**
This is the address that receives the DataCap allocation at the end of the round.
It is not used for activity measurement.

Each Participant Address may register **at most once per round**.

### What Counts as On-Chain Activity

For the purposes of AutoCap, *on-chain activity* is defined narrowly and precisely.

AutoCap measures **FIL burned by a registered Participant Address as a result of Filecoin Pay rail settlements**, subject to the following conditions:

- The burn originates from a **registered Participant Address**
- The burn results from the **settlement of a Filecoin Pay payment rail**
- The settlement is **denominated in FIL**
*(currently the only supported unit)*
- The settlement is **finalized on-chain**
- The settlement occurs **within the start and end time of the round**

Only FIL that is **actually burned as part of settlement** is counted toward a participant’s contribution.

The following do **not** count as on-chain activity for AutoCap:

- Unsettled Filecoin Pay rails
- Payments or transfers that do not result in FIL burn
- Activity originating from non-registered addresses
- Activity occurring outside the round window
- Activity denominated in assets other than FIL

> **Note on Future Refinements**
>
> Future versions of AutoCap may refine this measurement to count only Filecoin Pay settlements that can be **directly linked to sealed storage sectors (PoRep-backed storage deals)**.
>
> This refinement would further align DataCap allocation with verifiable storage activity, while preserving the action-first, reward-later model.

### 2. Contribution

During an active round, registered participants generate economic contribution by **burning FIL through the settlement of [Filecoin Pay](https://pay.filecoin.cloud) payment rails**.

AutoCap does not track generic payments or transfers. It observes **finalized Filecoin Pay settlement events** that result in FIL being burned on-chain and originate from a registered **Participant Address**.

#### Settlement and FIL Burns

Filecoin Pay supports programmable payment rails that accumulate obligations over time.
FIL is **not burned continuously**, but rather **at settlement**, when accumulated obligations are finalized on-chain.

Only FIL that is:
- Burned as a direct result of **rail settlement**
- Finalized on-chain
- Denominated in FIL
- Originating from a registered Participant Address
- Occurring within the round window

is counted toward AutoCap’s accounting.

Unsettled rails, pending obligations, or reverted settlements are not included.

#### Examples of Eligible Activity

AutoCap is agnostic to *how* Filecoin Pay rails are used, as long as they result in eligible FIL burns. Typical examples include (non-exhaustive):

- **Providing storage services via Filecoin Pay and settling payment rails**, resulting in FIL burns https://pay.filecoin.cloud

- **Storing data through PDP-based storage flows** that rely on Filecoin Pay settlement https://pdp.vxb.ai/calibration

- **Storing data via DDO-style workflows on testnet**, where Filecoin Pay is used as the settlement layer https://github.com/Eastore-project/ddo-client

- **Service provisioning workflows** that use Filecoin Pay as a programmable payment and settlement mechanism

In all cases, AutoCap measures only the **burned FIL outcome**, not the service type, counterparty, or metadata.

### 3. Allocation and Distribution
Once the round closes, AutoCap computes DataCap allocations using a deterministic, proportional formula based solely on **eligible FIL burns** recorded during the round.

Your DataCap Allocation 
= (Your Eligible FIL Burned / Total Eligible FIL Burned in the Round)
× Round’s Total DataCap Pool

Only FIL burned through **finalized Filecoin Pay settlements** originating from registered Participant Addresses and occurring within the round window are included in the calculation.

**Example:**
- Round has 10 TiB of DataCap to distribute
- Total FIL burned by all participants: 100 FIL
- You burned: 10 FIL (10% of total)
- You receive: 1 TiB (10% of total DataCap)

This mechanism ensures:
- **Fairness** — allocations are strictly proportional to contribution
- **Transparency** — all inputs are on-chain and publicly verifiable
- **Determinism** — the outcome depends only on observed data, not discretion

If no eligible FIL is burned during a round, no DataCap is allocated.
Also, allocations are computed independently for each round and are not adjusted retroactively.

### 4. Monitoring and Transparency

AutoCap provides a real-time dashboard that allows participants to:

- View upcoming, active, and past rounds
- See registered participants for each round
- Track **eligible FIL burns** as settlements are finalized on-chain
- View expected DataCap allocations (updated as new settlements occur)
- Verify registration status and associated addresses

The dashboard links to https://pay.filecoin.cloud, where all Filecoin Pay settlements and resulting FIL burns can be independently verified.

## Who is AutoCap For?

AutoCap is designed for **Storage Providers** who:

- Provide services that generate **economic activity via Filecoin Pay**
- Want transparent, automated access to DataCap based on verifiable on-chain behavior
- Prefer a competitive, rule-based allocation mechanism over manual applications

By providing services through Filecoin Pay — including storage-related workflows — Storage Providers can simultaneously:
- Generate on-chain economic activity
- Earn DataCap allocations via AutoCap
- Use that DataCap to make verified storage deals

AutoCap is **optional**. Storage Providers may continue to access DataCap through existing Filecoin Plus channels. AutoCap introduces an additional path based on an **action-first, reward-later** model.

## Why FIL Burns?

FIL burns provide a **protocol-native, verifiable signal of economic activity** on the Filecoin network.

When FIL is burned as part of Filecoin Pay settlement:
- The event is recorded on-chain
- It is irreversible and cannot be faked
- It reflects finalized economic usage of Filecoin services

By tying DataCap allocation to FIL burns, AutoCap uses a **neutral and objective proxy for value**, avoiding subjective evaluation or intent-based signaling.

### Registration Fees

Registration fees are **do not** count toward a participant’s eligible FIL burn for DataCap allocation.

Their purpose is to:
- Prevent spam registrations
- Ensure minimal economic commitment from participants
- Maintain clean accounting boundaries between access control and contribution measurement

## Usage in Practice

### For Storage Providers Who Want to Participate

This section describes the typical workflow for participating in an AutoCap round, from preparation to allocation.

### Before the Round Starts

Before a round opens, ensure you have the following:

1. A **Filecoin-compatible wallet** capable of interacting with the Filecoin Calibration testnet
2. The **Filecoin Calibration testnet** added to your wallet configuration
3. Sufficient **testnet FIL** to cover the round’s registration fee
4. Your **DataCap Actor ID** (`f0xxx`) where any allocated DataCap should be sent

> Note: The wallet used during registration becomes your **Participant Address** and is the only address whose Filecoin Pay settlement activity will be tracked for the round.

### When the Round Opens: Registration Process

When a round enters the **OPEN** state:

1. Navigate to the AutoCap Dashboard
2. Select the active round from the round selector
3. In the Participants table, click **“Register Now”**
4. Connect your Filecoin wallet when prompted
5. In the registration modal:
- Review the displayed registration fee
- Enter your DataCap Actor ID (numeric portion only, without the `f0` prefix)
- Confirm the registration details
6. The system simulates the transaction to verify that it will succeed
7. Approve the transaction in your wallet
8. Wait for on-chain confirmation
9. Upon confirmation, registration is complete

After registration, the dashboard will begin tracking **eligible FIL burns** originating from your Participant Address for the duration of the round.

### During the Round

During the active round window:

1. Generate FIL burns by using **Filecoin Pay** from your registered Participant Address
2. Ensure that activity results in **finalized Filecoin Pay settlements denominated in FIL**
3. Monitor the AutoCap Dashboard to:
- Observe eligible FIL burns as settlements finalize
- Track your provisional share of the DataCap pool
- Compare activity relative to other participants

AutoCap does not prescribe specific services, counterparties, or workflows.
Participants are responsible for ensuring that their Filecoin Pay usage complies with protocol requirements and results in eligible settlement burns.

### After the Round Closes

Once the round ends:

1. Eligible FIL burns are finalized and aggregated
2. DataCap allocations are computed deterministically based on the round’s formula
3. Final allocation results are published on the dashboard
4. DataCap is issued to the **DataCap Actor ID** specified during registration

> Note: The exact timing and on-chain execution mechanism for DataCap issuance is under active development and will be documented prior to mainnet deployment.

### Monitoring and Transparency

The AutoCap Dashboard can be accessed at any time to:

- View upcoming, active, and completed rounds
- Inspect registered Participant Addresses
- Verify eligible FIL burns for all participants
- Observe allocation calculations and outcomes
- Follow links to Filecoin Pay explorers for independent verification of settlement and burn events

### Questions or Feedback

AutoCap is under active development.
If you have questions about participation, assumptions, or system behavior — or if you have feedback on how the mechanism can be improved — please reach out to CryptoEconLab.