Pricing Model

Addressing Variable Market Conditions

The future market landscape is unpredictable, and the AR.IO Network smart contract is designed to be immutable, operating without governance or manual intervention. Using a pricing oracle to fix name prices relative to a stable currency is not viable due to the infancy of available solutions and reliance on external dependencies.

To address these challenges, ArNS is self-contained and adaptive, with name prices reflecting network activity and market conditions over time.

To achieve this, ArNS incorporates:

1. A dynamic pricing model that adjusts fees using a "Demand Factor" based on ArNS purchase activity
2. A Returned Name Premium (RNP) system that applies a timed, descending multiplier to registration prices for names that have recently expired or been returned to the protocol

This approach ensures that name valuations adapt to market conditions within the constraints of an immutable, maintenance-free smart contract framework.

You can view current live pricing at ArNS.app to see these formulas in action.

Key Definitions

• Protocol Revenue: Accumulated ARIO tokens from name registrations, lease extensions, and under_name sales
• Period (P): The time unit for DF adjustments, equivalent to one (1) day, denoted in milliseconds
• n: The current period indicator
• Price: The cost for permabuy or lease of a name
• Under_names: Subdomain equivalents, denoted by an underscore "_" prefixing the base domain

Dynamic Pricing Model

ArNS employs an adaptive pricing model to balance market demand with pricing fairness for name registration within the network. This model integrates static and dynamic elements, adjusting prices based on name length and purchase options like leasing, permanent acquisition, and undername amounts.

Core Pricing Components

Base Registration Fee (BRF)

The fundamental price for names, varying by character length, adjusted periodically.

Genesis Registration Fee (GRF)

The starting price for name registrations varies by character length. This is superseded by Base Registration Fees as the protocol evolves.

Table: Genesis Registration Fees

Demand Factor (DF)

A global price multiplier, reflecting namespace demand, adjusted each period based on revenue trends.

DF Mechanics:

• Intent: The Demand Factor adjusts based on protocol revenue comparison to the Revenue Moving Average (RMA)
• Increase DF: When recent revenue is higher than or equal to (but non-zero) the RMA, the DF increases by 5.0%
• Decrease DF: When recent revenue is less than the RMA or both are zero, the DF decreases by 1.5%
• Maximum DF Value: Unbounded
• Minimum DF Value: 0.5
• Starting Demand Factor: 1 (initial value at network launch)

Revenue Moving Average (RMA)

The average of protocol revenue from the past seven (7) periods.

Pricing Formulas

Adjusted Registration Fee (ARF)

$$ARF = BRF × DF$$

Annual Fee

$$Annual ~Fee = ARF × 20$$

Lease Pricing

• Lease Registration Price:

$$Lease ~Price = ARF + (Annual ~Fee × Years)$$

• Lease Extension/Renewal Price:

$$Lease ~Renewal ~Price = Annual ~Fee × Years (max 5 years)$$

• Grace period: Two (2) weeks

Permanent Purchases

• Permabuy Price:

$$Permabuy ~Price = ARF + (Annual Fee × 20 years)$$

• Lease to Permabuy Price: Same as above

Under Name Fees

• Initial Allocation: 10 under_names are included with each name registration
• For Leases:

$$Lease ~Under ~Name ~Fee = BRF × DF × 0.1$$

• For Permabuys:

$$Permabuy ~Under ~Name ~Fee = BRF × DF × 0.5$$

Primary Name Fee

Set or change primary name: The fee is equal to the associated fee for a single under_name purchase of a 51-character name of equivalent purchase type to the new primary name, regardless of the new primary name's length.

Step Pricing Mechanics

• Synchronizes BRF (Base Rate Factor) with ARF (Adjusted Rate Factor) after seven (7) consecutive periods at the minimum DF value
• Resets DF to 1 following a step pricing adjustment

Returned Name Premiums (RNP)

ArNS applies a Returned Name Premium (RNP) to names that re-enter the market after expiration or permanent return. This premium starts at a maximum value and decreases linearly over a predefined window, ensuring fair and transparent pricing for re-registered names.

RNP Mechanics

Intent

The premium starts at its maximum and decreases linearly until the name is purchased. If the name is not purchased before the premium window closes, it reverts to standard pricing and is no longer classified as "recently returned."

RNP Window

• Duration: Fourteen (14) periods

Returned Name Premium Formula

The premium multiplier follows a linearly declining function:

$$RNP = 50 - (49 / 14) × t$$

Where:

• RNP: The Returned Name Premium multiplier applied to the purchased name price
• t: Amount of time (or time-intervals) elapsed since the start of the return window

RNP Registration Price

$$Price = RNP × (Lease~Or~Permabuy) ~Registration~ Price$$

Permanent Name Return Proceeds Split

• 50% goes to the returning name owner
• 50% goes to the protocol balance

The RNP multiplier is applied to the registration price of both permanently purchased and leased names.

Gateway Operator ArNS Discount

Gateway operators who demonstrate consistent, healthy participation in the network are eligible for a 20% discount on certain ArNS interactions.

Qualification Requirements

To qualify for the discount:

• The gateway must maintain a "Gateway Performance Ratio Weight" (GPRW) of 0.9 or higher
• The gateway must have a "Tenure Weight" (TW) of 1.0 or greater
• A gateway marked as "Leaving" shall not be eligible for this discount

Eligible Discounted Interactions

• Purchasing a name
• Extending a lease
• Upgrading a lease to permabuy
• Increasing undernames capacity

Next Steps

Congratulations! You now understand the complete ArNS pricing system. Ready to get started?