I’d love to have the ability to instruct my neuron:
Being able to make those decisions so that my hands are tied would simplify my taxes pretty substantially. I have ADHD - I can’t manage to refill my prescriptions consistently, let alone manually trigger a taxable event every month for the rest of my life
John,
Thanks for the straightforward and clear responses. Per the medium article “The Internet Computer’s Post-Genesis R&D Roadmap” the SNS is due to be released in Q2 during the Carbon phase. And as we know the SNS is broadly based on the NNS.
Am I correct in thinking then that this proposed change to tokenomics will the proposed before the SNS is launched so it will be reflected in the SNS too? Ie, prior to the end of Q2?
I am not sure about the rest, but i would certainly want to get at least my maturity BEFORE 8 years. ** In fact i was counting on it when i made the investment into IC. **
Would this feature be an opt-in feature?
Thought the recent news of IRS refund staking reward tax make the proposal potentially irrelevant to the original purpose, or at least for the time being, no?
Quote: " 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."
If the mechanic is like this, It would be a major disaster for 8 years gangs that already plan to stake the principal, and want to live from the passive income monthly from the disburse maturity.
Auto compounded and merged maturity with this kind of mechanic, has to be an optional.
If I understand it correctly, we would have 3 buckets:
You could still live off the maturity if you chose not to compound it and rather disburse it.
But would there be an option to continually and automatically move the maturity into compound maturity or would we still need to manually do this @jwiegley?
An NNS proposal and vote won’t give us a better idea of what the community thinks. It will just provide the majority opinion of the few whales who have lots of voting power and the few devs who have recently been given lots of voting power. Given the low voting levels on the NNS, less than 28 people in total could probably decide the vote, fewer than have expressed their opinion on this thread.
I am an investor with a neuron locked for many years who has been following this forum for many months, now with my first comment to contribute. I believe the Internet Computer will revolutionize world computing. I completely believe in this technology and that is why I invested in it.
In my opinion, Features #2 & #3 make sense. #2 is not invasive relative to the long-term investment benefits that drew me, and no doubt other investors, to the IC. Staking the maturity inside the neuron and never even converting it into ICP, while still building voting power, makes total sense. And for those who want to convert some or all maturity into newly minted ICP and cash out, being fully aware that this will be a taxable event, then #3 provides that flexibility.
Feature #1, with its price trend modulation and use of coefficients, seems like overreach and introduces very undesirable elements of uncertainty to investors, both current and future. Features #2 & #3 stick to the point - namely, to address possible unfair taxation issues. A maturity merging mechanism (“hardening” the system against unreasonable taxation) and maturity dispersal mechanism (to give people the freedom to reap some rewards when they choose) is straightforward and keeps these governance changes lean and focused.
I propose that, when the time comes to vote on these governance matters, they be issued as three separate proposals (if that wasn’t stated already).
My thanks to Dom for such forward thinking!
Thanks for your contribution here. I appreciate your detailed analysis and especially like that you offered a clearly actionable suggestion in conclusion. That’s a solid first contribution on the forum. I’m looking forward to hearing more from you in the future.
Splitting the vote into 3 separate proposals is a great idea given how contentious price modulation is.
It is worth recognizing, to Dom’s credit though, that not having the price modulation may cause the tax authorities to treat accumulated maturity as income. They may argue that 1 week to disbursal is effectively liquid. Ie, proposals #2 and #3 alone without price modulation may not be sufficient to keep the tax authorities away.
I’ve confirmed with CPAs that the most recent case of the Nashville stakers who were refunded is not yet conclusive. We need additional guidance from the IRS.
I previously stated that I didn’t think it was possible to trick the IRS with price modulation. Upon reflection, price modulation does make income literally impossible to calculate so I’m not sure how the IRS would expect folks to do it.
I also previously stated that price modulation would make people price obsessed. Upon reflection, I also do not believe this to be the case since the amount of ICP that maturity can generate is only relevant when disbursing ICP. I can go on my merry way compounding maturity without worrying about the price, which I did not fully appreciate before. It may make the people who were planning on converting their maturity into liquid ICP price obsessed, but that’s ok and maybe even a good thing. Hopefully those people will disburse less during down trends and disburse more during up trends.
The only real downsides I see are 1) added complexity to all 3 proposals which may scare people away and 2) on price modulation, it may scare people away who want a consistent liquid ICP income.
On balance, I agree that proposals #1 and #2 are solid suggestions despite added complexity and proposal #3 is likely a good thing for tax reasons and incentive nudges.
I must say my opinions have swung pretty wildly on this over the past few days as I’ve given thought to it. Changes to tokenomics unless explained very clearly do set off a lot of alarm bells for people. Before any NNS proposals are put forth I do think a much more detailed description should be put out there to allay people’s fears as it’s a super sensitive issue.
Your comments on proposed Feature #1 raise some important points that put it in a more positive light - thank you!
Regarding price trend modulation: “is only relevant when disbursing ICP…go on my merry way compounding maturity without worrying about the price”
If that’s a completely true statement, then the Feature #1 mechanism would not seem to be as much a hindrance to long-term investors, current and future, while providing maximum tax liability protection. The crypto market can obviously be quite volatile. For those who believe in the IC, however, we see tremendous technological growth naturally creating asset growth.
It would be great if, prior to voting through the NNS, we could receive official Dfinity clarity on this particular point to proposed Feature #1 - that price trend modulation really has no effect on those investors focused on compounding maturity inside their neurons. If that’s the case, then Feature #1 gets my vote! And if, in the next several years this tax issue on maturity gets resolved, we can always vote again and discontinue price trend modulation.
Completely agree with Kyle here. Many of us would want to have neurons locked for 4-8 years and only have them compound for the first 4-6 years. However after that at least a few neurons can serve as dividend neurons while the rest keeps compounding.
As I understand it, it will be automatically compounded, more precisely the maturity will be simultaneously generated and compounded, the manual operation is the disbursing of the maturity.
Am I the only one who thinks that it all boils down to how many ICPs are burned? I mean there is no problem on the long run if staking rewards get reduced and ic coin burn rate increases… a well balanced system could fix it all.
I agree with you. And this number has just started its ascending. It will explode soon.
Well I don’t wanna fall into optimistic thoughts just because 90% of community members are icps holders but to me the real game is being played on developing new dApps/sites and so on (services in general) let’s see how it evolves
I have already talked about it, but even the long term investors will suffer of this modulation, because icpmaximalist investors like me and other fellows are both ICP investors and not considering ICP price !
More precisely, a lot of ICP investors don’t look at the price anymore, because they think with an ICP view, through the ICP as a whole ecosystem. So they don’t want to disburse ICP to sell them for fiat, but they want to disburse ICP to evolve into the ecosystem like by buying NFT or use ICP (token) in different manners into ICP (ecosystem). These investors, icpmaximalist, will suffer by being punished for the ICP price, whereas they never intended to sell any ICP but just want to use them as ICP. This proposal forget totally this people, it sees all investors just as investors wanting to sell their ICP, but a lot of current and potential investors are not.
This proposal only consider the passage from a currency to ICP and the return from ICP to another currency. By modulating, it will make these icpmaximalist investors stressed about the moment to disburse, they will use less the disburse and they will less reinject ICP into the ecosystem and eventually the ecosystem will suffer of this circulation slow down. Because as you know, any economy suffers from the fact that people prefer not spend their money rather than inject it back into the economy. It is the same here : you will have investors with ICP, but not injecting ICP to feed the ICP ecosystem anymore.
I think this is an error. This proposal will provoke a loss of spontaneity and circulation of icp, because people will be scary about not disbursing at the optimal moment, whereas they always were just wanting to disburse their ICP (token) as ICP (token) into the ICP (ecosystem).
To recap : this proposal make a distinction disappear : the distinction between pure speculators about ICP and investors who love the ecosystem and disburse their ICP only to use them into the ecosystem. For example, I never sold an ICP since may 2021, but I disburse a lot to use it into the ecosystem, but once such a proposal passed, I won’t do as much as I currently do, because I won’t take the risk of suffer of a price in fiat whereas I am not concerned by this price. By not doing this distinction , the ICP will just be like BTC, an asset to substitute gold, but ICP was designed to be a parallel world where the price crash should not have consequence on the spontaneity to disburse and evolve until the ecosystem. But by adopting this proposal, the ICP will be very alive during the bull run, but during the bear market, nobody will disburse, and the whole ICP ecosystem will slow down. Is this what we want ? An ecosystem slowing down or accelerating depending on the prices trends ? Because you are proposing a correlation between the price of ICP and the ICP fluidity here. It will be very bad to ICP to have its behavior driven by the prices, because people don’t go less on internet when the prices are low… but here, you are preparing the fact that when the price will be low, all the ecosystem activity will be weaker. You are not only incentivizing people to not sell, you are incentivizing to not disburse their ICP to inject them back into the ICP (ecosystem), you will make investors reluctant to disburse icp and making the ecosystem living by consuming into the ICP. Any economy would die of this, a country is ill when people accumulate money but don’t spend and reinject it into the economy. Let us not forget macroeconomical realities.
You never intended to create gold, you wanted to create a sort of gas to drive into the icp. For Gold, people will go toward BTC. ICP never was thought as a token to accumulate and not to disburse, you are supposed to want us to disburse maximally to spend it maximally into the ecosystem and so generate a maximum of circulation. During the bear market, not only the sales will slow down, but also the disbursing and by consequence the whole activity (fed by the icp disbursing and circulating) of the the ecosystem.
In a word, there is a whole world between letting maturity compounding, and spawning it to sell it as ICP : this world is named “ICP” (ecosystem) where we are supposed to live with ICP (token) as an internal “pulse” ; with this proposal, you will kill the circulation of ICP (token) and the development of ICP (ecosystem).
The « you » is not for you @OVVOVVO ! 
but for @jwiegley and @dominicwilliams
this is a great point, NFT sales would suffer if people are penalised for extracting reward ICP when the market is down.
As everything coming and requiring ICP (token) : Dex, Gamefi, DeInsurance, etc. All what is supposed to be developed on the ecosystem. And during the bear markets people will be waiting so long for having an optimal ICP disbursing, that once the market will be better, they will sell off to not be stuck again during weeks or months, and the market will dump again… even if the rest of the market don’t. Because people will be paranoid about the thought that everybody will want to run out by selling during there will be still time, before all other fellows could run out. They will do this maybe to buy lower, or maybe not and just run out of what they will live as a “traping” rollercoaster. This proposal will be an incentivizing to not disburse, and run out asap once the market will be better.
I think you are making a strong argument here. It certainly gives me more to think about. Thanks for sharing.