Sia Once Blasted Ethereum for Foundation. Now It Wants One – Decrypt

In brief

  • Sia has proposed hard forking the decentralized cloud storage network’s protocol.
  • Doing so would allow for a portion of each block reward to go to a Sia Foundation.
  • Sia has criticized the Ethereum Foundation for being too heavy-handed with protocol developments.

Just over three years ago, Sia co-founder David Vorick took to Medium to pen an ethos for the decentralized cloud storage network. In it, he called out the Ethereum Foundation for inserting too much centralized control into what was meant to be a decentralized blockchain.

Today, however, to counter sluggish growth, Sia proposed creating its own foundation.

The basic premise of Sia, launched by Nebulous, Inc. in 2015,  is that most people don’t need all the hard drive space they have. Just as someone might rent out an extra room on Airbnb, they can sell that hard drive space on Sia for Siacoin. Boom: decentralized storage.

But despite several networks forming around the concept, including Storj and Filecoin, decentralized storage hasn’t found much of a foothold in the blockchain world. Siacoin is currently trading for less than a cent, according to CoinMarketCap, and its 24-hour trading volume is in the low 3 million range. That said, it still ranks within the top 75 cryptocurrencies in terms of market cap, with $142 million, meaning there’s some value to the proposition.

In May 2017, when Sia’s market cap was just beginning its first big boost in interest, a month-long climb to $522 million, co-founder David Vorick explained the company’s ethos in a Medium post. Bitcoin, Vorick said, is incredible because it “operates in the absence of trust.” He aspired to make Sia stand apart from other altcoins by ensuring it held tight to a decentralized M.O. 

Vorick contrasted this with the Ethereum Foundation, which, he said:

“…has taken full control of the protocols [sic] future, including the rights to make sweeping changes to things such as the consensus algorithm, the coin supply, and even chain rollbacks. Most devs in the altcoin ecosystem maintain the same amount of control, which means users of this ‘decentralized’ ecosystem typically end up placing absolute trust in the dev team.

“This is not what we want for Sia.”

The problem, he insisted was that “once a person or group has power, they will almost never relinquish it voluntarily.”

Fast-forward to today. Sia’s other co-founder, Luke Champine, posted a proposal to reddit calling for the creation of the Sia Foundation, with Champine as president. Though posted by Champine, the proposal refers to “we” throughout, suggesting that it comes from the entire Sia team and/or Nebulous. (Champine has not yet responded to a request for comment.)

The foundation would theoretically play a large role in pushing the Sia blockchain forward, but to fund it, Champine proposes a hard fork of the protocol. Each block reward would be doubled from the current rate of 30,000 Siacoins (roughly $94) so that an additional 30,000 goes to a Foundation Fund. There would also be a one-time transfer of 1.57 billion Siacoins ($4.94 million) after the hard fork.

In other words, Champine et al are proposing expanding the coin supply; annual inflation for 2021 could run as high as 10.4%though the proposal calls for capping the amount in the fund at 5% of total supply and burning any unused coins. 

Additionally, the foundation would be tasked with maintaining and improving the core software, controlling a legal defense fund, deploying security upgrades to defend from attack, promoting adoption of the coin, and getting it more exchange listings. Twenty-five percent of the funds would go to things like “grants, bounties, hackathons, and other community-driven endeavours.” All funds, Champine wrote, will be managed by a multisig. 

To be fair, Champine et al. aren’t ramming the proposal down people’s throats. It’s been posted to reddit, where users are actively discussing its merits. One of those merits is a more pronounced split with Nebulous (Champine would divest from the company before taking his new post). Another is getting money into developer hands, akin to how Blockstack created the Stacks Foundation to spur innovation on the blockchain it invented.

One dissenting voice is Marcin Jachymiak, who worked at Nebulous until this July. He says the proposal, which leaves 12 days for discussion, is too rushed. Moreover, he said, it departs from the Sia ethos. 

Jachymiak told Decrypt, “One of the things that made Sia different from other altcoins was the lack of pre-mine.” Now, it effectively wants to do one to jumpstart development. 

That’s neither a bad nor malicious reason. But it does point to the fact that, when it comes to decentralization, maybe you have to have a strong foundation to build from.