---
# System prepended metadata

title: Filecoin Baseline Minting Educational Calculator
tags: [educational calculator]

---

# Filecoin Baseline Minting Educational Calculator 

###### tags: `educational calculator`

> :warning: :warning: This is a working draft! There are several missing bits and paragraphs through the document :warning: :warning:

## Intro

This app allows you to **interactively understand how Baseline Minting works** in terms of mining incentives and what happens **when the Baseline Function is crossed up or down**.

You have full control over how the raw-bytes Network Power looks like on the future! That's the `user`, and by tweaking the `When?` and `How fast?` fields for each stage, you can see **how it behaves and compares to an `optimistic` scenario, and against itself when Baseline Minting is turned off**.

## Description


As we're going to see, having **Baseline Minting enhances the long-term sustainability** and of network power by saving part of the block rewardwhen it's below the Baseline Function. Those savings accomplishes two functions:
- **Enhances security** by avoid distributing an disproportionate share of the rewards if an significant share of the network went down temporarily.
- **Improves sustanability** by distributing those savings to future miners when the network recovers and have it's power close to the baseline again

## Simulations

In order to visualize such effects, we'll be simulating what would be the baseline reward under different scenarios and comparing them directly. Specifically, the metric "Mining Utility" captures how much percent of an advantage the miner is having compared to an scenario where the Network Power is always equal to the Baseline.

Specifically, we have four scenarios on this app. Two for the user (`user` and `user-baseline-deactivated`) and two fixed (`optimistic` and `baseline`). 

On the left sidebar, you will find several options for controlling how the `user` scenarios for the Filecoin Network Power should grow with time.

## Scenarios

#### User

The `user` scenarios have their default settings assigned to an hypothetical situation, where the network doesn't grow initially, starts to grow at the same rate of the baseline function after some time, and it has sudden acceleration some years from now, only to get steady again.

In order to directly compare the effect of having Baseline Minting turned on or off, we have an second `user` defined scenario which is `user-baseline-deactivated`, which is analogous to deploying an fictious FIP on the beginning of the simulation which says "Baseline Minting now behaves just like Simple Minting".

*Technical specifics: this is done by iteratively increasing the cummulative capped power by the baseline function rather than the network power.*

#### Optimistic

The `optimistic` scenario is an scenario where the Network Power always grows as 5% as larger than the Baseline Function. 

#### Baseline

The `baseline` scenario is an scenario where the Network Power is always equal to the Baseline Function.

## References

[1]: Filecoin Baseline Incentives GitHub Repository: https://github.com/BlockScience/filecoin-baseline-incentives

[2]: Baseline Minting Incentives (Danilo Lessa Bernardineli, Gabriel Lefundes, Burrrata, Jeff Emmett, Jessica Zartler, ZX Zhang): https://medium.com/block-science/baseline-minting-incentives-743b229b9b80

[3]: Filecoin Network Crosses Baseline Sustainability Target for First Time
 (Danilo Lessa Bernardineli, Gabriel Lefundes, Jamsheed Shorish, ZX Zhang, Michael Zargham): https://filecoin.io/blog/posts/filecoin-network-crosses-baseline-sustainability-target-for-first-time/

## Contributors

This calculator has been developed as part of the collaboration between BlockScience and Filecoin. We acknowledge the work of the following collaborators for making it come to life:

- Will Wolf (BlockScience, ML engineer)
- Danilo Lessa Bernardineli (BlockScience, Subject Matter Expert)
- Burrrata (BlockScience, Community Lead)
- Jamsheed Shorish (BlockScience, Scientist)
- ZX Zhang (Protocol Labs, Research Lead at CryptoEconLab)

## Glossary

### Raw Bytes Network Power (RB PiB)

How much storage capacity there is on the network. This is the sum of the total active onboarded storage by all miners and sectors.

### Block Reward

The Block Reward on a given period is the sum of how much Filecoin was minted through the Simple Minting and the Baseline Minting mechanisms.

#### Simple Minting

An mechanism for issuing Filecoin as storage mining rewards through an time exponentially decaying function.

#### Baseline Minting

Similiar to Simple Minting, but it uses the concept of an "Effective Network Time" rather than the time since launch for issuing rewards.

#### Effective Network Time (ENT)

An time-like measurement that takes into consideration how the RB Network Power historical trajectory is sucessful at tracking the Baseline Function. When RB Network Power is above the Baseline, then ENT *tends* to move forward with the same rate as the real time. Else, it *tends* to go slower than it. [1]

### Marginal Reward (MR)

An indicator about how much Filecoin is earned for any unit of onboarded raw storage. It is defined as the instantaneous block reward divided by the instantaneous RB network power.

Marginal Reward Per Storage: $\omega(t) = \frac{BR(t)}{P_{rb}(t)}$

### Mining Utility (MU)

In order to make Marginal Reward comparisons relevant, it is important to contextualize it in regards to an common scenario. Mining Utility divides the Marginal Reward of any scenario against that common scenario, which is defined as being the situation where the RB Network Power is equal to the Baseline Function at every point on time (past, present and future).

Normalized Marginal Reward Per Power: $\pi(t) = \frac{\omega_s(t)}{\omega_b(t)}$

## References

[1]: Baseline Minting Incentives (Danilo Lessa Bernardineli, Gabriel Lefundes, Burrrata, Jeff Emmett, Jessica Zartler and ZX Zhang). https://medium.com/block-science/baseline-minting-incentives-743b229b9b80

[2]: 