Storage Fund Functions

Sui Network's object-centric design makes data storage more flexible by providing an efficient and sustainable economic mechanism for financing data storage, which is vital given the ability of Sui to store arbitrarily large amounts of on-chain data.

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Sui storage design makes it super cheap to store data on Sui, which allows to store all data on-chain without having to bother about off-chain storage.

Sui storage fund has three key features:

• The storage fund is a tool for shifting gas fees across different epochs. This ensures that future validators are compensated for their storage costs by the past users who created those storage requirements in the first place.
• The storage fund pays out only the returns on its capital and does not distribute its principal. Validators literally borrow the storage fund's SUI coins as an extra stake and keep the bigger share of the staking rewards. At the same time, validators don't receive funds directly from the storage fund. This guarantees that the fund doesn't lose its capitalization and can survive indefinitely.
• The storage fund has a storage rebate function. Once an object is deleted from the storage, the user that ran the transaction gets a refund or storage rebate.

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Deleting transaction objects does not mean transactions are deleted, too. Past transactions remain immutable on-chain for good.

Storage Fund Mechanics

Sui storage fund size is fixed for each epoch according to the net inflows accumulated throughout the epoch:

• Inflows from the storage fees paid for transactions executed during the current epoch.
• Inflows from reinvestments of the fund's returns into new principal.
• Outflows from storage fee rebates paid to users who delete the object data associated with past transactions.

The key property of the rebate function is that it ensures that storage fund outflows are always less than the original storage inflow. This guarantees that the storage fund is never depleted and that its size corresponds to the size of the stored data.

What Storage Fund Incentivizes

The storage fund mechanics bring about the following incentives:

• users are encouraged to delete data and obtain a rebate on their storage fees
• deflationary pressure is created over the SUI coin since increased activity leads to larger storage requirements and the removal of SUI coins from circulation
• capital efficiency is fostered by introducing a rent model where users pay for the storage space they actually use through a pay-per-period model.

For more information on Sui storage, read official Sui docs.