Community fund | Revised design proposal

I think moving maturity between neurons is probably not going to fly (as attributes can’t be moved around), but the idea of generalizing the CF to make it less specific and opinionated and allow a more diverse set of goals and activities to be funded/supported is a sentiment I agree with.

Happy to explore this direction further.

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How exactly does this work here? Why burn the ICP raised? SNSs need to have enough money to drive the dapp to run, if you burn the ICP provided by CF, then where does the dapp need to find the money? What is the point of raising funds?

We can see this expression in many of the DFINITY Foundation’s proposals, which have become an excuse for the Foundation to intervene in the application layer implementation.

The fact that CF is included under NNS already declares to all investors in the community that CF is privileged as a venture DAO compared to the venture DAOs created by third-party developers in the market.

In fact, NNS brings the investment of CF intervention in sns and additional costs for developers. Clearly, each vote for NNS is a heavy debt for SNS, and the developer takes on the additional debt of all of NNS’s pledges compared to raising funds directly from individual investors on Launchpad.

Not only does the project owner have to pay for the gas produced by ICP, but it also has to repay NNS for the votes.

This seems to be saying that all programs under ICP must be directly responsible for all stakers of NNS or you will not be able to raise funds.

Apologies this was confusing. The ICP raised by the decentralisation sale will be controlled by the SNS and can be used by the SNS as they wish.

At a later date when the NNS becomes the controller of SNS tokens from the neurons allocated to the CF in the decentralization sale, if the NNS sells those tokens for ICP that ICP will be burned.

Whilst the NNS has some properties which other venture DOAs maybe do not, it’s not all one way. Other entities maybe have advantages such as nimbler decision making or vertical focus which make the decision to use the NNS/SNS/CF route advantageous for some projects and not so for others.

I’m not sure I fully understand your argument here.

Projects have the free choice to evaluate the trade-offs and decide of they wish to a) use the SNS launchpad as their decentralisation vehicle or choose another community built DAO launchpad b) decide if they would like the CF to make an investment in their project as part of that decentralization sale.

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Moving maturity around neurons with the same PrincipleID could work though no? For example, I could then send, for example, “5” maturity from a 8 year neuron to staked maturity from my 6 month neuron. That would be very helpful for a lot of folks.

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The constraint today is maturity is an attribute of a neuron so by design it can’t be moved around. I will discuss with the team if ownership by the same principal could alter that constraint.

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I already suggested this months ago while discussion for the maturity proposal was still on going, this is what a dfinity dev said:

Not sure what happened to that request.

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Thanks for your answer.

On the last point, I think there is no free choice for IC projects. the addition of the NNS vote has actually given privileges to both SNS and CF, with SNS getting the privilege of more replicated nodes and more security, while CF is basically seen as a credible proof of NNS for the project.

The key is investor judgment. NNS voting offers the privilege of if much, and if projects are not certified by NNS, investors will view them as high-risk and off-brand. Projects with NNS certification are obviously more attractive to investors, and all projects have to go out of their way to get more NNS votes.

This necessarily adds more costs to the project side. As an example in Polkadot, projects need to participate in slot auctions to get some privileged features, and each auction needs to raise hundreds of millions of dollars in votes, which is a terrible debt for the ecosystem, so a number of projects have fled the Polkadot ecosystem.

This can limit innovation, and I’ve talked to a number of programs that have had headaches with the NNS vote.

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Hi all, FYI the motion proposal for the community fund is now open for voting.

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N may I know if there any future privilege, perk or incentivization to the 8years neuron that joined the community fund?

Maybe I am misreading here, but it seems that through this method, maturity is calculated as equivalent to a certain amount of ICP at a given time.
Does this not go against the grain of the tax-related proposal which aims to obscure how much exactly maturity is worth by adding a modulating mechanism at dissolution? In other words, if we can calculate exactly how much the maturity in a neuron contributing to the community fund is worth, would that not also apply to the maturity of all other neurons, which can then be used by tax authorities to determine taxable income?

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There is no special treatment for 8-year neurons. However these kind of neurons collect the most maturity and thus can exposure more maturity to the CF.

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We are working to make the higher replication subnet a protocol feature which is available to any other canister or project. It’s on the core protocol part of the recently published roadmap

So yes there are some characteristic of an SNS from a trust perspective (trusted canister WASMs, and initiation of decentralization) which may not easily be replicated given the NNS has some unique characteristics from a trust perspective. We are trying remove any un-necessary additional privileges which accidentally may have got included with the SNS implementation.

I can see your point.

Possibly another way of looking it is as a spectrum of costs for creation of a DAO from zero (in the case of a completely permissionless design) to hundreds of millions of dollars in the polkadot example. I’m not sure it’s healthy to have zero costs, as a project does need to establish some degree of credentials and trust prior to involving users in a DAO creation, but I would also worry if we end up with very high costs of DAO creation.

The framework we have put in place is that the NNS has the autonomy to decide what costs it wishes to place on projects. The NNS DAO could establish a voting convention that SNS creation requests are only rejected in case of the most egregious of abuses, or it could alternatively decide to impose very high costs on projects. If the NNS chooses poorly then there will be a natural opportunity for others to fill the gap with a DAO creation framework with lower costs but hopefully with similar levels of decentralised trust.

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If under this guarantee, then the creation cost of DApp DAO is still reasonable and unlikely to be a problem in the short term.

But IMO this guarantee is not reliable in the longer term, because the mechanism already exists and you can’t predict every voter’s decision forever. When some NNS voters find it profitable to suppress the project (and projects may be forced to concede more concessions in order to pass NNS), everything will be changed.

This is not guaranteed in the system.

Hi @Denis,
I would describe it as follows:

  • A user can expose maturity to the community fund and as a result the maturity might increase at a later point in time. As part of this process the user does not receive tokens or neurons, as the NNS is the owner of them.
  • The NNS could also mint ICP and invest in SNSs without any reduction in maturity of CF neurons. However by reducing the maturity of participating CF neurons, we reduce potential impact on tokenomics as this maturity cannot be spawned, while it is exposed to the CF.
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Thanks, @bjoernek, I’m probably being dense about this, but I’m not sure if this answers the basic question. In your proposal you state that the Maturity of CF neurons is reduced by X pro rata and SNS treasury receives X newly minted ICP as part of the swap. This indicates that maturity is being valued at a particular rate of ICP at a given time. Does this not undercut the compounding maturity proposal? Tax authorities will simply say that it doesn’t matter whether the final maturity is modulated, since it is obviously being valued at a certain rate currently.

Here is the description of Maturity Modulation in the wiki:
• Maturity is an attribute of a neuron; it is not a tradable asset. The decentralized governance of the Internet Computer can change the treatment of maturity at any time.
• If a user wants to generate income from maturity, he/she needs to burn maturity to create new ICP via spawning a neuron which is a non-deterministic process.
• The maturity modulation function introduces uncertainty in the creation of ICP from maturity. This article explains how the maturity modulation function works.

As far as I can tell, the Community fund treats maturity as a deterministically tradable asset.

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I just want to leave my voice here that I am adamantly against a Community Fund officially sanctioned by the NNS: https://twitter.com/lastmjs/status/1558069812827488261

For these reasons:

  1. Exposes the entire NNS DAO to unwarranted legal and economic risks
  2. The facts and circumstances of each project are unique, and legal and economic designs should be specific to those projects, and the consequences scoped to those projects
  3. This will complicate the NNS, split its purposes and focus, and distract it from being laser-focused on governing the core IC protocols, which I believe should be its main (perhaps sole) purpose
  4. The community can develop their own DAOs to focus on fundraising

I am afraid that if we incorporate the Community Fund into the NNS, we will bring many problems upon us in the future stemming from the reasons I listed above (and perhaps others I haven’t thought of).

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ICDevs.org uses a (not very well used due to interface issues) “Dedicate a Neuron” feature that lets you point your neuron at ICDevs and lets us use the maturity as a donation (see ICDevs.org).

I don’t see why we can’t set this up as a separate DAO with nothing to do with the NNS that uses the same functionality.

It can basically work in exactly the same way just not connected to the NNS.

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Thank you for your feedback @Denis, and this is an important and probably a subtle element!

The key point I would like to make is that the NNS is minting new ICP and invests it in SNSs. The maturity of CF neurons is not swapped against ICP but rather only locked until it is released/increased again.

As a thought experiment, you could imagine that the NNS CF invests in SNS without CF neurons exposing their maturity. The fact that you lock the maturity of CF neurons ensures that the impact on inflation is kept minimal (because the locked maturity cannot be spawned).

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Thanks for your response, @bjoernek. These issues are pretty complicated, it is fair to say, but since so much effort has been expended on the maturity modulation feature, it is worth getting things perfectly straight.
So, let me take this example. Say, I contribute maturity from a neuron to the SNS which in turn provides ICP to a dapp. Now, say, the dapp fails completely and all the money invested it is lost. What happens to the maturity that was frozen from my CF neuron pro rata?

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