A proposed change to Session Pro's tokenomics

As set out in The Future of Session, the Session Technology Foundation is focused on three goals: launching Session Pro, reducing the cost of maintaining Session, and putting the project on a sustainable footing. As part of that work, Session’s developers are proposing a change to Session Pro's tokenomics, specifically, how the Session Network is compensated for the resources that Pro uses, and how Session Pro payments can fund the continued development of the Session app.

This post outlines the proposed changes and how they can enable the long-term sustainability of Session.

What is being proposed

Under the proposed model, Session Pro’s tokenomics would involve two separate components, determined independently of one another: a per-Pro user Network Fee paid to the Session Network and a Session Development Fee to fund the ongoing maintenance and development of the project.

The first: the Foundation pays a Network Fee into the Session Network to account for the resources that Pro places on it, adding to rewards for Session Node Operators. For the initial launch of Pro Beta, this is estimated at $1.13 USD per Pro user per month. More on how this estimate is reached and paid out below.

The second: payments made by users for Session Pro are received by the Foundation, net of the 15% commission taken by Apple and Google, and directly fund the development and maintenance of the Session app.

These two components are independent of one another. The Network Fee is determined strictly by projected network costs of Pro users incurred by node operators, not by what is paid for Pro, and it is not a share or proportion of those payments.

Why this change? 

Under the Pro tokenomics originally outlined, unlocking a Pro feature was treated as a Network Fee paid in Session Token (SESH). That fee was to be burned and reminted back into the ecosystem, with 90% added to the Staking Reward Pool, which rewards Session Node Operators for their validation and storage, and 10% into protocol-owned liquidity. The fee arose at the moment a user upgraded to Session Pro, and its amount was tied to the user’s payment for that upgrade, rather than to the load actually placed on the network by the Session Pro user after upgrading.

There are two problems with the sustainability of the original model that this proposal seeks to address.

Firstly, it left Session without a sustainable way to fund its own development. Because the entire Pro payment was treated as a Network Fee and returned to the network, nothing remained to support the software development and maintenance that Session depends on. As the Foundation currently relies solely on community donations and grants from non-profit organizations, it continues to face the risk of a permanent shutdown without additional, stable sources of funding. Directing Pro payments to the Foundation, while compensating the network separately, gives Session a stronger chance of survival. 

Secondly, the Network Fee in the original model held no relationship to the resources a Pro user actually places on the network. It was fixed to the amount and timing of a user's upgrade payment rather than to real usage, so the network was not compensated in line with the load Pro creates. Grounding the fee in the network's costs and settling it through a mechanism the Foundation does not directly control is both a more accurate reflection of what Pro costs the network and a more decentralized design than a fee set by, and routed through, the Foundation's own pricing.

Pro Pricing and the Session Development Fee

The Session Development Fee is the portion of a Pro payment that reaches the Foundation once app store commissions are deducted, and it is directed entirely to the maintenance and development of Session. This covers the work the project depends on and currently has no stable source of funding for, including building the full Pro feature set, moving core functionality into libsession and deploying Session Protocol v2 with PFS and post-quantum cryptography. Current progress toward these goals is covered in the most recent development update. The Session Development Fee is set independently of the Network Fee and is not a fixed proportion of any payment.

At launch, Session Pro will be priced at US$2.99 per month on an annual subscription, US$3.99 per month on a three-month subscription, and US$4.49 per month on a monthly subscription. Apple and Google convert these to local currencies automatically, so amounts shown in each store will vary by region. Payment methods outside the app stores are being explored for future releases of Session Pro. Payments made through these external gateways would also go to the Session Development Fee.

Session's developers intend to publish periodic updates on how the Session Development Fee is being used, alongside the development updates already published on the Session blog.

How the Network Fee is calculated

Rather than arising from user payments for upgrades to Pro, the Network Fee is based on the increased load Pro users are projected to place on the network. However, because the Session Network does not distinguish Pro traffic from any other traffic, this load cannot be measured directly. Instead, it is modeled by the Foundation taking into account various costs of running and maintaining a node along with the expected usage of a typical Pro user. The model estimates the network resources a Pro user consumes, as derived from the Pro feature set and reasonable assumptions about how Pro users behave. While Pro users subscribing through the Apple or Google stores incur this fee, the same fee is applied uniformly for any other Pro user, such as promotions or future alternative payment mechanisms, regardless of the actual payment made for those accounts.

Two things make a Pro user’s network load heavier than that of an average account. The first is who takes up Pro at all. Its features, such as higher character limits, more pinned conversations, and animated display pictures, are only worth having to someone who already uses Session intensively and frequently. Therefore, it is assumed that the users who tend to upgrade to Pro will be among the most active of Session’s user base. The limited statistics available today show that network usage is far from uniform: some users, who are those most likely to value Pro, send many times more messages than average.

The second is the load the features themselves add on top. Much of that feature load is modest in the initial Pro features: the dominant demands on the network are the constant polling and message retrieval that every account generates, which Pro does not materially change. One important exception is the Pro-enabled animated display picture, which is a larger file size that is fetched by every conversation partner and community member who views the Pro user’s profile, each fetch traveling its own three-hop onion path. A single Pro user's display picture can therefore generate traffic across the network well out of proportion to that user's own activity. In this case, this is a load the network carries not because of what the Pro user does, but because of everyone who sees them. In the future, other planned Pro features will incur significant network costs which will also be factored into the model. 

Based on the current planned feature set, the Foundation’s modeling yields a Network Fee of $1.13 per Pro user per month. This figure is designed to cover the share of Pro users on the network, taking into account both direct and indirect costs of operating a Session Node. This figure forms the basis of Session Pro’s network tokenomics at the launch of Pro Beta. However, the model will be reviewed and updated by the Session Technology Foundation as new Pro features are added, which could increase the Network Fee, or as improvements to the efficiency of Session are rolled out (such as upcoming upgrades relating to Session Router, which could decrease it). The fee may therefore move up or down accordingly as the Session Network (both Pro and non-Pro) develops.

How the Network Fee is settled

Settlement would be handled in a deliberately hands-off, trust-minimized way, with no ongoing control retained by the Foundation.

The fee would be denominated in US dollars and settled in USDC. That USDC would be sent to a purpose-built smart contract which anyone can fund and anyone can execute. On execution, the contract would convert its balance into SESH, for example through a Uniswap pool, and burn the SESH it acquires, retaining nothing. Because the amount of SESH is set by the market conversion rather than by the Foundation, the Foundation does not determine how much SESH is burned.

The burned SESH would be remintable into the Staking Reward Pool through a publicly callable function of the Session Network, from where it would be emitted to Session Node Operators over time based on the network reward rate. The resources Pro places on the network are, in effect, returned over the long term to the operators who provide them. The amount settled in this way is determined by the modeled cost of a Pro user to the network. It does not increase with the price of Pro, or with the payments received for it.

Under the proposed settlement, the contract converts and burns its entire balance, with no portion allocated to protocol-owned liquidity at launch. Given the Foundation's current financial position, funding development and the network is the immediate priority. Protocol-owned liquidity remains a goal, and an allocation is expected to be reintroduced in the future. 

By design, the contract would hold no administrative key, pause function, or upgrade path controlled by the Foundation or anyone acting on its behalf, and funds sent to it cannot be recovered or redirected. The contract address will be published.

What happens next

At launch, Session Pro Beta will operate under this proposed model, with the Network Fee accruing for each active Pro account from launch onward. 

The conversion contract described above is still being developed. To avoid delaying the launch of Pro Beta any further, Pro Beta will launch before the contract is deployed. In the interim, the Network Fee will continue to accrue daily for each active Pro account, and the Foundation will reserve the corresponding amount for conversion to SESH once the contract is live, at which point it can be burned and reminted into the Staking Reward Pool.  

With this proposal, the Foundation aims to balance the sustainability of Session's invaluable community of node operators with the need to fund ongoing development. Session community members are invited to share their thoughts, questions, and suggestions on these proposed changes, and the feedback of node operators is particularly encouraged. As the launch of Session Pro Beta is rapidly approaching, your input can help refine the updated network tokenomics for Session Pro.