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Pay as You Use Golem: a brief (but effective) primer - our latest research on price models for p2p networks

Last week, Marcin Benke, advisor to our R&D team, presented for the first time, at EthCC (Ethereum Community Conference) in Paris -  our latest research on price models.

Golem has been dedicating substantial efforts to R&D lately, as you may be able to see. Last week we published the Model 0 post,  and our new Marketplace was recently implemented in the latest software version 0.19.0. You will also hear from this team again soon in our Graphene update.

Last year we presented our mid-term goals roadmap, where we highlighted the R&D team as responsible for building tools, models, and mechanisms that are useful, not only to Golem but to the whole ecosystem. Model 0 and Pay as You Use Golem, are part of these efforts and are generalized enough that can be implemented in other p2p networks, even though Golem is our focus.

Back to “Pay as You Use Golem” – this is a very simple yet effective new model for p2p marketplaces, looking for fairer models for their economies. Let’s think of it in the Golem setting: both requestors and providers need the underlying economy of the network to have a pricing model that not only “satisfies them”, but also makes sure “cheating” by bad actors is reduced as much as possible.

At the moment, Golem uses the “Fixed Price” model, where the requestors in the network fix prices and providers accept. After consideration, we concluded this is not a fair model for p2p networks. Parameters change all the time: task sizes, job value, and it is not possible to make these estimations without knowing the details. Additionally, workers would need to add a “risk premium” to ensure that they would not work in vain.

The Time and Materials price model is a better alternative. When the task size is unknown it can adapt to it, and if both ends are honest, it is a fair model. However, if this is not the case, one risks overcharging by dishonest workers, and at the same time, requestors...

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