D-QUORUM Stake & Disbursals

Dear IC Community, :waving_hand:

Now that CO.DELTA has been set up, I’d like to revisit D-QUORUM and figure out how we can contribute to making high quality governance and due diligence on the IC self-sustainable (facilitating a large number of high quality neurons). Here’s a thread that provides more context about the governance problem, and the need for solutions →

As a decentralised network, I think it’s appropriate for solutions to be put forward and worked on from left, right and center (we don’t necessarily need to sit around and wait for DFINITY).

At the moment D-QUORUM follows (and would ideally help fund) CodeGov, Aviate Labs, Zenith Code, and several other neurons that put hard work into reviews and publicly posting proof of due diligence before voting. The neurons were elected by NNS proposal (much like how node providers are onboarded). The missing element is moving their rewards mechanism on-chain, and closing the loop on the governance problem.

I’m very passionate about making the IC a place where good quality reviewers are sustainably incentivised to put the hard work in to protecting the safety and sanctity of the network (ultimately increasing the robustness and value of the IC as a result). This helps protect everyone’s stake, but also helps it grow in relative terms (if investors have more confidence in the levels of decentralisation and due diligence exercised within the ecosystem).

I’m interested in starting work soon on a suite of defi products that will direct 50% or more of their profits into the D-QUORUM neuron stake. As this stake grows the voting rewards that acrue in the neuron will eventually become substantial enough that NNS-triggered disbursals from the D-QUORUM neuron can be used to reward elected D-QUORUM followees, much like how node providers are periodically rewarded by the NNS.

Note: The formal neuron controller for D-QUORUM is the NNS itself, and the only principal with the power to disburse voting rewards is the neuron controller


Before I start fleshing out plans for these defi products, and potential for integrating with WaterNeuron (the most promising liquid staking protocol on the IC - for numerous reasons), I would first like to understand if the community will back these efforts. The only thing that needs confirming is:

If we can grow the stake of the NNS D-QUORUM known neuron, can we expect the community to vote to adopt the creation of a new NNS topic - one which disburses D-QUORUM maturity to D-QUORUM followees?

D-QUORUM is designed to ensure that the stake is secured by the NNS itself, which is essential to ensure that incentives are strongly aligned, and to avoid the abuse of funds (reviewers that don’t remain sharp and competitive can always be unelected - much like offboarding a node provider).

I hope the community will be supportive of an initiative that helps the community help itself. What are your thoughts? Should we get started?

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While I applaud the creativity of your ideas here @Lorimer, I do not believe that the NNS should be the controller of an individual neuron. Nor do I believe everyone in the NNS should be required to configure Followees for an individual neuron or manage distributions of that individual neuron. I believe that neurons should only controlled by a single person or small groups of people using the Neuron Management proposal topic, not the entire NNS.

@Lorimer
Admittedly I had to read this several times before I could understand how this works. But now i get it and I like it.

@wpb
what is the problem with the entire IC community controlling a neuron that distributes rewards to people who are working to protect and ensure decentralization of the ecosystem? Seems like a logical step to insure incentives are aligned.

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  1. Re: new proposal types: I think we can fake it. I’ve been playing around with some ideas to resolve the “DFINITY won’t let the NNS control apps” issue. Happy to talk more about it.
  2. Re: control: Are you sure that DFINITY won’t apply the same logic to distributing funds that they do to upgrading apps? Namely: They are responsible for most of the voting power and if the distribution goes somewhere naughty then they may be held liable by someone? You should ask before you put too much time and effort into it. (The ideal solution here is that they don’t move a realized majority with their vote…we’ll get there eventually)
  3. “The market” would say that any defi product directing profits to a cause will be out-competed by one that directs profits to the users pockets. I’ve seen some of this up close trying to raise for ICDevs.
  4. “The market” would also be a great way to incentivize this kind of work. Ideally, the mechanisms are set up so that the beneficiaries have so much on the line that they provide this work product out of their own pocket. Bootstrapping can be great, but if the incentive for doing the work is not grown with an organic foundation it will be much more brittle.

So some positives and some negatives there, but in general I like where your thinking is headed. Happy to help in any way I can even it is just to shake the tree to make the roots stronger.

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Thanks @skilesare! I really appreciate your feedback and offer of support. I’ll split the answer between control and market forces.

Control

  • The precedent for NNS disbursals is Node Provider rewards. I think it would be best to avoid trying to fake any of this, but I’m curious to know more about what you mean. I think the distinction between elected proposal reviewers and onboarded node providers is immaterial with respect to disbursals.
  • Elections and rewards based on those elections are already a thing, and baking this into the NNS isn’t an unpopular idea :slightly_smiling_face:
  • D-QUORUM has the NNS governance canister as its formal controller. This post will ideally lead to a motion for blessing on-chain rewards via the NNS. If we can get this, the stake will follow.

Market forces

I hear you, but there are limits to that reasoning in practise. If there weren’t everything in economics and crypto would be a race to the bottom (in reality there are counter-forces and other factors at play). Happy to discuss more and elaborate :slightly_smiling_face:

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Hi @lorimer and thanks for sharing these ideas!

I have to admit, one thing that made me a bit confused about the idea is why it makes sense that the NNS itself owns neurons: it seems to be a bit a loop that a governance participant (neuron) is owned by the overall governance that is in turn controlled by the neuron. Maybe a good analogy to a known governance process might help future readers understand this aspect better?

Regardless, I now also see that the D-QUORUM idea could be an interesting experiment to try out a governance form that is closer to representative democracy - neurons vote once in a while which known neurons (representatives) are trusted to then make the decisions for a while.

My main remaining concerns is your suggestions to modify the NNS governance code and add a new proposal for operating the neuron. Even though I fully support experiments and trying out new ways of using and interacting with the NNS, I am worried about adding more complexity to the governance canister. I think overall we tend to underestimate how quickly such special cases lead to more code complexity, which might introduce bugs and make developing and verifying the governance code harder. For example, I continuously notice how hard it is for people to understand and reason about manage neuron proposals (which are proposals that target a neuron management function and are thus a bit similar to what you are looking for).
Therefore, I think it would be great if we could come up with an alternative way to achieve what you are looking for without the need for a new special proposal. Perhaps one could use a custom canister that controls the neuron and encodes some rules when and why the neuron’s maturity etc can be disbursed? Happy to help brainstorming more ideas!

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Thanks Lara, I really appreciate you taking the time to go through this :slightly_smiling_face:

I think your two concerns are:

  1. Unfamiliarity (no obvious precedent or analogy)
  2. Incidental complexity

TDLR: I’ve tried to summarise my answer for this below, followed by discussion points.

  1. Familiarity: Representative democracy (in the form of periodic public elections) is a known and common governance process.
  2. Simplicity: D-QUORUM is just the implementation detail, one which is intended to re-use existing governance infrastructure as much as feasible in a bid to avoid incidental complexity

These, in a nutshell, are the core intentions for D-QUORUM, as a means of combating the weaknesses of liquid democracy (particularly if followee-cascade-rewards are implemented).


Thanks, I should have done a better job of leading with the the intended behavioural features in my earlier explanation - specifically representative democracy, in the form of periodic public elections. This is the known governance process, while the D-QUORUM neuron itself is just an implementation detail (the design reasoning for which relates to your point about incidental complexity).

I’m really glad you’re receptive! I hope your first point above is addressed, but please let me know if I need to dig a little deeper on that point. I’ll try to address your point about complexity below, preceded by the core design intentions.

Core Design Intentions

  • Elections should be open, visible, and accessible to all, to avoid potential for centralised bias, censorship and/or hijacking
  • Followers should retain freedom, by either delegating their VP to elected reviewers, or exercising unique followee preferences topic by topic if desired
  • The easy option for followers should aid decentralisation rather than centralisation (conveniently following the elected reviewers, rather than ‘DFINITY Foundation’ being the obvious go-to)
    • Caveat: For this to be comprehensive and realistic, I think DFINITY should be considered an implicitly elected entity, unless that’s against the explicit will of the NNS on a topic-by-topic basis (otherwise the elected group as a whole will never be seen as a more natural choice to follow by the average disinterested follower than the ‘DFINITY Foundation’ neuron itself)
  • Re-use existing infrastructure to avoid incidental complexity

Implementation FAQs (assuming periodic NNS elections)

  • Q: How should followers delegate their vote to the elected group, without introducing incidental complexity?
    • A: Follow a neuron that is known to represent the elected group
  • Q: How should elected reviewers be stored and represented by the NNS, without introducing incidental complexity?
    • A: Elected reviewers are stored as followees of said neuron
  • Q: How should elected reviewers be rewarded for their efforts
    • A: The same way that the NNS already does this - maturity of a voting neuron with sufficient stake - in this case said neuron
  • Q: How should those rewards be disbursed to elected reviews
    • A: By the NNS governance canister being the controller of said neuron (:check_mark:) and periodically disbursing the maturity to the elected followees (). This shouldn’t really even need a proposal if the followees can be controlled by NNS proposal (which is necessary for on-chain elections in any case). This is really the only thing that needs implementing, and it should be minimal effort based on my understanding of the codebase. There’s a lot of pre-existing logic that can be reused due to this implementation being based on existing neuron infrastructure - very little actually needs writing.
  • Q: Can you think of a simpler way of implementing NNS reviewer elections?
    • A: ________ (I can’t)
  • Q: Is this approach compatible with follower-based reward cascades?

I think you’re describing the CO.DELTA neuron and canisters. If DFINITY doesn’t want third parties building infrastructure to try and accumulate and direct funds towards NNS-elected reviewers as a whole, I’ll focus these efforts directly on CO.DELTA. This will benefit me more, along with the current and future CO.DELTA team. Hopefully it’s clear that that’s not actually what I’m trying to do.

Please let me explain why:

I see governance as the IC’s biggest achilles heel due to diffusion of responsibility. I’m pessimistic about its chances for long-term success unless there are a plethora of teams like CO.DELTA, where each one is well-funded but where the funds are conditional on the teams remaining sharp and competitive. This will not be achieved by a member of CO.DELTA building products that only fund CO.DELTA, because as soon as that funding stream exists, the immediate imperative for the CO.DELTA team to work hard on reviewing NNS proposals to earn said funds no longer exists…

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Even though some people on the forums have been talking as if these are a given, I really think this will lead to centralisation and will vote against.

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I agree with you fully on this objective.

Would you mind sharing some of the ideas you have in mind for defi products? I can understand if you feel it is too early, so not a big deal if you are not ready. However, I’m very curious why you would be willing to direct 50% or more of the profits into the D-QUORUM neuron stake?

Would you mind clarifying this statement a little further? Node providers are not paid from neuron dispersals. They are paid from ICP that is directly minted by the NNS and deposited into their accounts. I’m trying to better understand how you envision the disbursals to work.

They may be similar in terms of controlling a neuron management function, but they would be very different in who is required to participate. All Neuron Management proposals today are private and can only be voted by Followees of the Neuron Management topic for that neuron. The Neuron Management proposal topic is also not included in governance reward allocation. The idea that Alex is proposing here would require the entire NNS to vote on every proposal to add or remove Followees and every proposal to distribute funds. It would also have to be a proposal topic that is included in the governance reward structure.

I’m not sure very many people realize this, but Neuron Management proposals are by far the most common proposal type in use today. Over the last 1 year, there have been 4094 Neuron Management proposals out of 7558 proposals total. The next closest is IC-OS Version Deployment at 2066 proposals, which is the slow release of the IC-OS updates to each subnet each week after the IC-OS Version Election is blessed by the NNS. It makes no sense for anyone in the community to review and vote independently for those proposals. In fact, DFINITY adopts each of them immediately within a few minutes of submitting. The next most frequent proposal topic is Subnet Management at 418 proposals. A specialized group (CodeGov and CO.DELTA) reviews this proposal topic, so there are at least a few of us who actually pay attention to this proposal topic at this frequency. So at this time, there are 10x more Neuron Management proposals that hit the NNS than there are Subnet Management proposals.

The proposals to configure D-QUORUM Followees would not be rare given that reviewers will come and go and anyone would be able to submit the proposals. There would likely be people who try to spam those proposals as well in some sort of political effort to smear some of the Followees. Worse still, there would be a lot of proposals to disperse maturity to each of the Followees. Given the example today, that is 5 proposal topics times 2 grantees each topic, which would mean 10 proposals per month that everyone in the NNS has to vote on. This could easily blow up to 15 Followees on up to 12 proposal topics, which would be up to 180 proposals per month. This would apply to D-QUORUM alone. It starts to amplify if other D-QUORUM type of neurons exist.

I just don’t see how this is a tenable option for the entire NNS to control the Followee configuration and dispersal of funds for a single NNS neuron, especially not using the existing Neuron Management framework. It seems to me that the better approach is for a subset of the NNS, which can be any amount that is interested as long as they volunteer to participate, were to get together to elect their own Followees for the D-QUORUM neuron and for those people alone to be responsible for dispersing the funds in the neuron. It makes much more sense for this to occur via a new canister method instead of building it into the existing NNS framework.

To be clear, I don’t believe that followee-cascade-rewards is the right answer for how known neurons who perform work should be funded. I prefer an approach that is closer to node provider remuneration. Each proposal topic has a different level of effort and skill that is required for a known neuron to become credible and reliable. Hence, the remuneration should be customized for each topic. I also think that teams of reviewers can be more credible and reliable than individuals who perform this work. Hence, I’d like to see the incentives attract teams such as CodeGov and CO.DELTA and hopefully 10-15 others in the future. This doesn’t mean that individuals shouldn’t be incentivized as well, but it seems to me that teams have more to offer when it comes to building credibility and offering a reliable service. Hence, I’d like to see the incentives drive people to want to form teams.

It doesn’t matter if these teams are centralized or decentralized individually. What matters is that they each are contributing to the decentralization of the NNS by virtue of their existence as credible and reliable contributors to the independent review and independent voting on each of the technical proposals that the NNS governs. These are the known neurons that should be highlighted as Followee options for each individual topic in the NNS so people know their Followee options. How each of these neurons operate internally is up to them. Some will choose to be fully decentralized and that is fine. Some will choose to have a centralized admin structure and that is fine too. They should not be rewarded based on total voting power that they trigger when they vote in the NNS. They should be paid at a level that is required to attract and retain teams with the right skill set to become subject matter experts on their topics and vote reliably on every proposal that is submitted to the NNS for that topic.

I haven’t seen you post anything that clarifies these details. Would you mind explaining what you have in mind more explicitly?

I agree with this concern. We need many known neurons to perform the work of governing the NNS by way of competent and reliable proposal reviews. That’s why I think we need a new remuneration mechanism for known neurons who perform work for the NNS such as CodeGov, CO.DELTA, Aviate Labs, Zenith Code, and 1eo. This could be in the form of known neurons making a proposal for a specific funding level over a specific period of time with specific deliverables. Then the NNS could simply decide if the offer is acceptable. These could be yearly proposals with distributions that occur every month automatically. If a team is doing a poor job, then they don’t get their offer renewed. There could also be a proposal to rescind the agreement mid year if the team is found to be doing a poor job.

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Hey @Lorimer to be a little more specific about why I’m asking these questions, I think the D-QUORUM neuron would require a stake of approx 800k ICP in an 8 year neuron if the maturity were used to pay Followees. This is based on the current Grants for Voting Neurons incentives for 5 proposal topics and 2 grantees for each topic. Of course, more would be required to add additional grantees or more proposal topics. I’m curious about the defi products you have in mind because that seems like a lot of profit if that were the source of funding. Also, over what time period do you have in mind before that much profit could be accumulated such that this funding mechanism would become a viable alternative.

:handshake:

ICP is minted as rewards. The how is an implementation detail.

‘Require’ is the wrong word. The right word is ‘invite’.

I agree. Nobody’s saying it would.

That’s what rejection fees are for.

Not unless that were considered desirable →

That’s what followees are for, and this is how the NNS already works (such as how Synapse wielded a huge portion of the NNS VP on the recent elections, and bascially were the key decision-makers in the outcome).

The are numerous options. Disbursals can be automated periodically without requiring proposals. Election decisions can take many different forms, but ultimately it only needs to come down to adding or removing followees on a specific topic. This could be preceded by motion proposals as before.

We don’t need more sources of inflation, and we don’t need the incidental complexity. You’re in favour of the behavioural principles, but you’re not keen on the implementation details. I’m keen to see what @lara’s thoughts are on my response to her comment.

One of the benefits of D-QUORUM is that it allows anyone to donate to a stake that will benefit the security of the entire IC. I’m simply asking for the NNS to be able to make use of the rewards from that stake (so that I can get to work building and helping contribute to that stake).

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This answer doesn’t provide much clarification. Why would you personally be willing to donate 50% of earnings from a defi product that you build to fund NNS proposal reviews? Why is this funding your responsibility instead of the responsibility of the NNS? It would potentially make sense for very large organizations or whales with a lot of stake to contribute in this regard, but even that is questionable in the minds of many (which is why it hasn’t happened in the first 4 years of ICP existence). I’m not following why you would build a new defi product with the intent of using profits to fund NNS proposal reviews. What is the business case?


Require is the correct word. A person qualifies for governance rewards for taking 2 actions: 1) stake in a neuron with at least 6 month dissolve delay and 2) vote on proposals. Without 1, you can’t do 2. Without 2, you don’t get rewarded. Voting is a fundamental requirement even if you delegate your vote to someone else. Characterizing voting as a low effort activity or trivializing it under the disguise of liquid democracy is a misuse of our governance system. Every person is responsible for their own vote. My position remains that every person in the NNS should not be responsible for voting on the Followee configuration or the maturity distribution of a NNS controlled neuron.


This is true for every whale and is the reason that the so called elections through NNS Motion proposal ranking were the wrong approach. Difference between yes and no votes should not be used to rank outcomes because there are too many neurons with large stake that can completely swing the vote single handedly. These decisions should be yes or no based on simple majority for each applicant and each passing proposal should be funded. There should be no ranking. Synapse is the only neuron that had a voice in that process where the decision was made by a group of 14 volunteer Followees and the voting power that was triggered was sourced from neuron owners who chose to follow Synapse. They can just as easily choose to unfollow Synapse any time for any reason and I recommend that anyone who doesn’t trust Synapse should simply not follow us. All other large neurons that are voting on proposals own their own voting power, so they can swing the vote for whatever reason they want including their own conspiracy theories.


I agree we don’t need more sources of inflation. We can use the difference between the inflation committed as per the Voting Reward Function and the inflation actually distributed as maturity for voting. This Voting Reward Function should remain the cap on inflation.


@lara already gave you the same answer above that she has given you with every thread you have created on this topic. It’s become quite repetitive…she shows you grace by acknowledging what you want to achieve and then politely guides you in the direction you need to go. “Therefore, I think it would be great if we could come up with an alternative way to achieve what you are looking for without the need for a new special proposal. Perhaps one could use a custom canister that controls the neuron and encodes some rules when and why the neuron’s maturity etc can be disbursed?


I agree it is awesome to see a project where people can donate to a stake such as D-QUORUM. It sounds like you may already have some major benefactors. As I commented previously, I really do hope to see this happen because in my opinion the whales and the large projects in the ecosystem really should be making contributions to NNS governance in this way. Regardless, you already are empowered to use the rewards from that stake without needing the NNS to be a controller of the neuron and without needing to create a new proposal topic that everyone on the NNS is required to vote.

I’m just that kinda guy :man_shrugging: This isn’t a question I can give you a satisfactory answer on, because from my perspective the real question is why aren’t others doing this? It’s to secure the network upon which we’re all building. I can’t focus on much else without a security like this in place first.

It takes talent to spin open elections as a problem, even though you’ve stated elsewhere you’re in favour of elections (you’re just getting bogged down in the implementation details).

No, not really…


Wenzel, can I again ask you to hold off and we’ll see what @lara comes back with in response to my response to her.

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