But John, have you seen the increasing of ICP burning ? It is becoming explosive, whereas we are at the early beginning. Do you think really necessary to modify tokenomics ? Why would not we trust your initial tokenomics for a while ? Plus, modify the tokenomics with a bonus/malus of 3 or 5% will add very little economics changing, but a lot of more complexity for potential newcomers. Does it worth it ?
In my opinion, it is urgent to not change anything, as we say in French.
I have to agree, lets give everything a bit more time to mature
Why not +/-K , K>10%? The bigger is K, the bigger is the tax penalty in a down trend and the bigger is the incentive to wait until the network is growing consistently. According to this rationale, we could start with a very large key and steadily relax it until we reach K=0 in few years when all pre-genesis neurons are unlocked, the key developments are deployed and the network is in a healthy constant positive evolution.
It would be suicide IMHO. None other tokenomics make this kind of tokenomics trick, I have not sees any similar tokenomics elsewhere. It could be taken as an admission of failure by the most part of new investors who did not see such things in other famous blockchains, or at least they will be very dubitative, like the investors that I persuaded to invest into ICP, but eventually abandoned the idea when they learned about this potential new tokenomics : not because it was nit enough benefitable, but because they just found the thing strange. I really don’t get the strategic point here. Let us not forget ICP must talk to newcomers, and this redesign does not talk to already in investors. Sometimes, not do anything is do the right thing.
Could you elaborate on what and why it could be taken as an admission of failure by the most part of new investors?
Of course ! Because it looks like tokenomiks redesign with arbitrary and odd tricks, rather than just develop the blockchain. I mean, I never heard about this kind of design or redesign before, in any other blockchain. It could appear like a despair measure to any other new investor because none other project, among the famous protocols, tries to impeach people to sell : they incentivize people to hold. I don’t care if it changes personally, because I am in love with ICP, but the already in investors will not be enough to guarantee the sustainability of ICP, we need new blood ! So let us keep readable tokenomics. Plus, and again, not even one year passed. But everyone has my point of view, so I will remain silent from now on, to let other people talk and add new views.
Hi Roman, the current proposal has three distinct aspects to it:
I think #1 is a no-brainer: many people want this, the implementation is straightforward, and we have some UI mock-ups already that I think neuron holders will really like.
#2 remains an open question: Will it have the desired impact on tax authority decisions? Is it enough or too much? This discussion is ongoing, and your feedback here is quite helpful. We summarize these chats from time to time, so that Dom and our CTO Jan Camenisch can stay updated on your thoughts.
#3 is perhaps the most contentious, and there are already some reasonable arguments that discounting maturity may not affect stability very much in the end, and we ought to let the tokenomics mature before thinking further in such terms.
What I’ll note is that at present, the technical solution for both #2 and #3 is the same, so we should focus now on just the tax requirement. The question is then: What will best protect people who transfer maturity into stake from having to constantly liquidate to cover taxes?
The recent Tezos decision is a great move in the right direction, but until it becomes part of the tax code, we cannot be certain this one court decision is enough.
I don’t know how this would help the network. I think that this contributes to less decentralisation, meanwhile we talk that the IC is web3.0… power to community… and so on. But this proposal speaks something else.
If you penalize a neuron holder, who contributes to more decentralised governance of the IC, by slashing his ICP from his maturity (which he earned by voting and contributing to decentralisation) by 30%, just because the price trend is down, then that contributor doesn’t want to waste more energy on reading every governance proposal to understand it’s impact on the network to know how should he vote, reading every discussion on forums and telegram channels for each proposal so he can decide where to cast his vote etc… to see all this contribution be slashed away just because some whales decided to dump a bag of ICP and tear down the price.
How does this sound like decentralisation? It’s more of a tyranny which punishes people for selling their goods cheap, than a free decision making for my well earned goods (maturity > ICP).
If the price goes high, and some whales disburse their bags of maturity and sell all that ICP, this would result on a price drop. Who’s gonna disburse and sell then? Whales have the luxury to pay price analytics experts who can tell them when to disburse and when not. What choice would the average John Doe without price analysis expertise have:
The most damaged would be those ICP maximalists who will stay just because they love the tech, even if it means to be slashed away every time the price trend is red.
This is just my thinking on the results of this proposed tokenomics.
Hey John,
I just wanted to let you know that I favor all 3 of the proposals at this time based on Dom’s article, but I do feel like more information is needed about the technical solution to make better educated decisions. I encourage Dfinity to shape those ideas further before scaling them back too much. I’m interested in learning more.
Thanks a lot for your detailed answer John 
John,
Thanks for your detailed explanations. Automatic compounding would be a game changer. I have a few clarifying questions.
If I have an 8 year neuron, and I’d like to stake my maturity, would the “staked maturity” automatically be set to 8 year dissolve delay mirroring the neuron or could the staked maturity be set to a different length that is set at the time of staking?
Will the unit of “staked maturity” have a different name such as “synapse”? For the sake of simplicity, I’ll use the term synapse below for the rest of my questions.
Would be helpful if a neuron could be configured with various “synapses” each with their own dissolve delay attributes. Even with added complexity, this would be helpful if folks with an 8 year neuron want to funnel their maturity into a 6 month “synapse”. Will this be possible?
Alternative is disbursing often in order to retake into new neurons with shorter delays which feels cumbersome and may have negative consequences. Those negative consequences could be both tax-related and also economic in terms of disbursed ICP if the price modulation passes. Folks should only disburse if they want liquid ICP, not if they would like to funnel their maturity into shorter dissolve delays on their synapses.
How would merge neuron function with multiple neurons that each have a (or several) synapse(s)?
What is the unit of account for a synapse? Maturity is measured in % terms. Would a synapse be the same? This may be tricky to calculate as we’ll be thinking through two or more percentages - the % on the synapse and the % of the maturity, both of which will be based on ICP in the neuron. Perhaps the synapse can state it has XX ICP locked but provide a disclaimer that the XX is an approximation? I know the way I’ll think about it is I have XX ICP +/- 10% I won’t be looking at all the percentages.
Cheers,
David
Great questions, David!
The staked maturity shares the dissolve delay of the neuron. It is, for all intents and purposes, like unminted stake.
So far the most common name is “compounding maturity”, but I don’t know what the final terminology will be. That’s up to Dom after the next design review.
Not possible, at least with the current design. It could be suggested in a future proposal.
Merge neuron would combine all stake, compounding maturity, and regular maturity.
The unit of account for compounding maturity is ICP equivalents, internally. It is presented as % in the current UI, but this is very likely to change.
Why have such a small conglomerate of people decided to change tokenomics this way, despite clear community disagreements with the proposal
In this model, I don’t understand the benefit of staking the maturity if it is automatically compounded.
To say it differently, what would be the advantage of staking the maturity rather than just letting the maturity be automatically compounded. What does motivate someone to say : « I am going to stake the maturity accumulated, rather than letting it keep being compounded ».
I understand why people would spawn, I understand also why people would accumulate maturity by automatically being compounded, but I don’t understand why they would stake the maturity. What is the strategy for such a person @jwiegley ? @dfisher, an idea ?
I totally respect the point you are making about how there has been a vocal group participating in this discussion, but I also want to point out that we don’t really know if these comments represent a vocal minority of the community opinion or if they really are a majority opinion. I personally feel like I need more information to have a firm opinion. I think a lot of others are in the same situation.
For example, we conducted an informal poll in the ICP Maximalist Network telegram group a couple days after Dom’s article came out. There had been some discussion in the chat group, mostly people trying to figure it out. The purpose was just to check the pulse of the community. We asked the basic question: How would you vote? As it stands today, the results are 25% Adopt, 45% Reject, 30% Undecided from 73 votes cast.
This is a tough subject in my opinion. I personally think it needs more clarification before I can tell if it is something I would support, but I think there is good potential. The topic statistics show that 28 users have contributed to this discussion, there have been 78 replies so far, and yet there have been over 1.3k views. I think there are a lot of lurkers with interest. Hence, I think it’s too soon to make a call on what the full community thinks. I don’t think we will really know that until something is put to a vote in the NNS as a proposal.
This is why I personally think Dfinity should continue shaping the proposal and I appreciate that they are attempting to take community input into consideration. I think it’s tough because opinions exist at all extremes at this time.
Hi Roman, can you clarify what you mean by “staking the maturity”? I’m not clear on your question yet.
My mistake John ! I misunderstood some messages above, because some fellows were speaking about compounding maturity and other ones were speaking about staking it. And I made a bad mix ! Sorry !
I think that what people mean by staking maturity is to use the current “merge maturity” functionality to mint their maturity and transfer it immediately back into the stake of the neuron. This is a bit different from the auto-compounding maturity proposal, where the maturity will act as though it had been staked in this way, but it won’t ever actually be realized ICP. And since maturity is potentially subject to future governance proposals changes how it is realized, one could argue that this “staked maturity” is not an asset under your imminent domain.
Thanks , John.
Under that proposal(auto compounding forever) if for whatever reason, someone wants to take out ICP out of the maturity, how would one do that; assuming a 8 year staked neuron?
Apologies if this question has been addressed. I tried to look ; but couldn’t find an answer.
The compounded maturity is treating in almost all respects like the stake in the neuron. To turn it into tradable ICP, you’d have to dissolve the neuron and disburse the stake and the compounded maturity into your account. So it would take 8 years to receive that income.