In an earlier article about gas fees on Sui, we mentioned that storage fees factor into the gas fee calculation. Just as gas fees pay for the cost of processing transactions on Sui, storage fees pay the cost of data storage.
Reflecting the lack of volatility around non-blockchain data storage costs, Sui's storage fees remain fixed until updated through a governance proposal. As of this writing, the storage fee is set at 76 MIST, or 0.000000076 SUI, per storage unit.
Sui's strong support for on-chain data makes storage fees an important component of its tokenomics. However, the overall design simplifies matters by collecting storage fees as a portion of gas fees. This one-time fee pays for storage in perpetuity. In addition, users get a rebate when they delete data they own from Sui.
Storage Fee Calculation
Although a governance proposal periodically sets the storage fee, there are some underlying intricacies to data storage measurement. Sui calculates the storage fee based on each storage unit in a transaction.
Each byte of data equals 100 storage units, making a kilobyte equal to 100,000 storage units. If we had a transaction involving a one kilobyte NFT, for example, the storage fee would equal 7.6 million MIST, or .0076 SUI, at the price noted above.
Every transaction gas fee folds in the related storage fee. Again using a one kilobyte NFT as an example, the total gas fee would include the 7.6 million MIST storage fee. Importantly, however, if that NFT gets deleted from Sui, it would stop using storage resources and a portion of the original storage fee, currently set at 99 percent, would be returned to the gas fee payer as a rebate.
Storage Fund
Storage fees collected during transactions go into a storage fund rather than being distributed directly to independent Validators, the people supporting the network infrastructure. This model recognizes that future Validators need to maintain storage for assets transacted by Validators that may not be in the network anymore.
The storage fund's assets are staked to Validators. The stake rewards that accrue from this activity pay the Validators to offset the costs of storing data on Sui. The direct correlation between data storage and storage fund growth means that stake rewards increase as storage needs increase. This mechanism ensures that, as Validators' costs increase, their revenue increases.
Drawing on staking rewards instead of the storage fund capital makes the storage fund a self-supporting feature of Sui, continually garnering storage fees from each network transaction and paying out rebates to users who remove data from the network.
Stable Tokenomics
Sui's tokenomics model was designed to be self-sustaining, and the storage fee mechanism serves that purpose. The size of the fund directly reflects the amount of data stored on the network. As fees accumulate, and by design experiences neither spikes nor dips, the storage fund creates its own gravity, supporting the many Validators running the network.
From time to time, governance proposals will set new storage fees based on various externalities, introducing a human factor to correct the model as needed. As data storage infrastructure costs decrease, storage fees may follow. Likewise, a rise in the SUI token's value may necessitate a lowering of storage fees.
