WTN tokens are currently available extremely cheaply. Anyone can acquire them with ease. This will continue to be the case into the medium term future (because there are more SNS swap rounds scheduled). If you’re interested in governance, you need only participate. Beyond that, I expect governance decentralisation will be further facilitated by holders of WTN token gradually selling them off due to the value that they will undoubtably accrue.
Also bare in mind this whole thing isn’t about finding perfection, it’s about finding an effective trade-off (as with most things in the real world). The trade-off is between:
a vibrant flowing economy where economic value can easily change hands, and
a governance system which continues to function on proof of non-transferable stake (for obvious reasons)
Decent point, but doesn’t water neuron do the opposite? It gives WTN holders MORE votes than their stake should warrant. nICP holders “give away” their votes for their liquify, but for every action there is an equal and opposite reaction.
And while this mechanism isn’t functionally different than liquid democracy, for a while , unlike liquid democracy it isn’t really transferable away from WTN…
So if WTN gets 51% the only recourse is burning your nICP.which reduces total VP and give WTN holders even more say.
At small levels this is probably fine and maybe even more organizationally efficient, but we should have caps on these kind of systems so they can’t amass anythkng close to a majority of VP.
Let’s put transferability to one side for an instant.
What ICP needs is a way to manage neurons in a multi-sig setup. Whether that is canister controlled, or not, is to me not so important. If it can be done without being canister controlled, that’s fine by me.
ICP will not succeed with institutions if we cannot have multi-sig control of neurons. No bank or government or corporation is going to ask its CFO to hide the seed phrase under the mattress.
And before anyone says it’s unrealistic that they could get that much power, keep in mind that given a proper liquidity premium, no rational democratic actor going forward, will stake through the NNS. Zero. It would be financial stupidity. Obviously, This is going to happen tomorrow but given time and the turnover of neurons, I think it is economically inevitable at this point.
Fortunately, the system is open in decentralized, and hopefully before that ever happens, we have a number of competing systems that balance each other out. We could actually probably figure out a very lush garden of different risk features.
How are you measuring what their stake should warrant? Liquid democracy already makes this link somewhat tenuous. I do see your point, but there’s already precedent for neurons obtaining significantly higher VP than their stake (due to followees) as you acknowledged. They earn this additional VP through reputation, but my understanding is that WTN holders will also be able to follow others who demonstrate technical insight and an ability to make and communicate informed decisions. Again, there’s a trade-off here, and I think it’s justified.
we should have caps on these kind of systems so they can’t amass anythkng close to a majority of VP
Agreed. I suspect this will happen.
We could actually probably figure out a very lush garden of different risk features
Sounds good (as long as none of these alternatives violate proof-of-stake, by allowing those with liquid stake to cast a vote, or some other poorly thought out / dangerous approach)
Would you please clarify this statement? I didn’t understand what you meant. WTN neurons have all the say in how both the 8yr neuron and the 6mo neuron vote. When someone liquidates their nICP via full dissolve, I believe that does decrease the 6mo neuron stake like you said. However, I don’t see how that gives WTN neuron owners more voting power to cast. Also, what do you mean by 51%? Are you referring to 51% of total voting power in the NNS?
Given that your proposal suggests to make all neurons transferable, I would expect that this proposal also provides a full analysis on why this does not create any security issues. For example, a fundamental building block of the ICP governance so far is that voters have skin in the game (with ICP being locked in neurons), so that neuron holders vote in the long-term interest of the network. What is your assessment with respect to that ?
Having considered this further, I think the situation is more nuanced. I think there are fundamental differences between canister controlled neurons and how they’re implement. I’d love to hear your thoughts @skilesare.
Take liquid staking solutions for example, WaterNeuron’s solution and StakeGeek’s solution were worlds apart. I’m still trying to get a feel for Meta Pool (but the closed source nature of it doesn’t fill me with hope).
I think if the canister in question is verifiably controlled by a sufficiently healthy DAO, meeting a set of necessary criteria, then I don’t see why VP restriction on the NNS side would be needed, or even fair (after all the NNS is a DAO, which also needs to be healthy and is expected to meet the same sorts of criteria).
This may not be an exhaustive list, and would be cool to flesh it out based on community discussion, but I think the two most important things are:
A sufficiently high Nakamoto coefficient (this is obvious). Large enough to account for reasonable margins of error, with a sufficiently large portion of the VP doxed.
Non-transferable neurons (which govern the DAO). This should also be obvious. It ensures voters are tied to the outcomes of their votes. Transferability simply destroys this guarantee. Even if it’s possible to subvert transferability restrictions (e.g. IdGeek), it’s still important for those restrictions to be there (locks on doors don’t always keep burglars out, but doors are still designed with locks, and that’s good and proper).
Are these the only two foundational requirements for a DAO we can have confidence in, or are there others?