Storage Rent on the Ergo Blockchain

in #blockchain4 months ago

A unique feature of Ergo is storage rent. This is where a small fee is extracted from dormant UTXOs/boxes which haven’t been used in the last four years. This fee then goes to the miners who secure the network. This income for miners will allow them to stay profitable even as mining rewards quickly taper off and transaction fees remain at near zero. The storage rent feature also acts to reduce the size of the blockchain by reclaiming lost coins from forgotten wallets, therefore increasing decentralization as it keeps the data storage requirements low for those who run a full node.

To avoid paying these fees, holders simply need to move their ERG once every four years. The popular Chrome browser wallet Nautilus has a tab which shows the wallet’s oldest UTXO and has a function to easily renew UTXOs.

How fees are calculated

For an average size UTXO, the storage rent levied every four years will be approximately 0.14 ERG. It should be noted that if a box does not hold enough ERG to pay the fees, then any native tokens or NFTs can be claimed by miners, so it is important that holders are well educated on this feature.