Flexible Pricing and Supply/Demand Dynamics

Through the tokenomic mechanism, compute providers in the SAGA network will compete to offer the most cost-efficient and reliable computing capacities for executing every computational process bidden by network operation agents. AI service providers will vie to provide the most efficient and precise algorithms and AI engines. Data providers will compete to supply the best quality and most reliable data needed by AI algorithms. Network operating agents will compete with each other in their abilities to construct computational workflows from data, computer resources, and AI services and ensure their efficient execution, clearing, and settling of transactions on behalf of consumers, who will bid for actual work to be done on the SAGA network. A successfully executed computational workflow will trigger a SAGA smart contract, which will mine the amount of SAGA native tokens proportional to the computational work expended when executing the workflow.

To support the dynamic pricing of computational resources within the network, the SAGA framework will: Firstly, provide a composite computing price index, which will be available to all constituents of the framework in real-time via a native API. While prices of computing resources charged by individual providers may differ from the index due to objective reasons (specialized capabilities, additional services, discounts/free support for socially beneficial computing projects, etc.), the index itself will serve as a global benchmark and a dynamic 'bonding curve', relating SAGA to the external market of computing resources and economy. The spot computing price in the network will depend on the supply and demand dynamics of computing resources and could significantly vary depending on immediate circumstances. This will introduce the supply/demand dynamics, so when demand exceeds supply, the average price of computing within the SAGA network will exceed the price of computing 'in general', as measured by the index. New computing resources will be attracted to the network, which will balance the price. Additionally, the index will simplify transaction pricing because it will introduce a simple measure according to which prices of different computational resources could be estimated and compared to each other — which is essential for the network to work; Within this framework, SAGA directly or via its partners may introduce decentralized finance instruments, such as future trading, staking, and others, in order to facilitate market mechanisms for balancing compute price within the network and sustaining growth of the network and token value; Lastly, the dynamic pricing of computing resources within SAGA will allow it to react in real-time to surges of computing demand, which may become a distinctive and important property of the framework as a whole.