Analysis of SAGA Economic Model: The Road to Affordable Blockchain
The essence of SAGA's business model is to distribute block space to downstream demand parties. A key issue involved is how to price. SAGA adopts a unique "musical chairs pricing":
(1) Assume that there are a=12 validators in the initial state, and SAGA hopes to select 8 of them for delegated verification
(2) First, SAGA selects a certain number of validators from the ranking of pledge rates to enter the bidding stage. For example, if p=10, then the 11th and 12th validators will be eliminated
(3) Next, 10 validators make bids, and they are sorted from low to high according to the bids. 8 of them are selected as delegated validators. At the same time, the price is determined according to the highest price among the 8 validators. Validators No. 2 and No. 7, who bid $6 and $8, are eliminated. The remaining 8 validators are shortlisted and agree to be priced at $5.
