Exploitation of the Neuron Fund

Given DFINITY has recognized the Design Flaws within the Neuron Fund & the necessity for implemented fixes (while continuously allowing them to be exploited), will DFINITY consider temporarily adjusting their voting criteria to align the “Neuron Fund Contribution” standards with the minimum threshold (which is what has been achieved the grand majority of SNS Sales), rather than the maximum?

The assumption of maximum sale commitments is allowing projects to “take” 50% more from the Neuron Fund than intended (in line with the proposal addressing proportional contribution), while reducing the minimum contribution threshold drastically.

This has resulted in what should be “in-complete” SNS Sales bypassing the final phase of “approval” (minimum contribution), while simultaneously “front running” Neuron Fund liquidity.

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It depends how you look at it. It seems to me that rather larger players invest through Neurons’ Fund (as indicated by its higher entry threshold), who usually do it in a closed private round, bypassing the retail investors. Here you have the option of direct investment at its initial stage, and if you think that the project is weak, you do not invest in it.
Participation in NF is also optional, but theoretically possible for anyone more involved in the ecosystem. It seems to me that the problems you see can be solved at a later stage, because so far the funding is ongoing and the rewarding of investors will take place at a later stage of development. All launch transactions are also stored in the swap canister (as I understand it for security purposes). It is as if you are participating in beta testing of a new system, which you do at your own risk (or not). I don’t know what you see as a problem so big as to block willing people from participating in Dsale in this way. These ICPs minted from the NF come from real investors, from voting rewards and aren’t “minted of thin air”.
In this system, also the NNS can decide to sell these tokens only partially, which should limit the “sudden dump to the market” of a large number of tokens at once if planned wisely.

To be quite honest, I don’t think you’re understanding the crux of what I’m saying - maybe that’s on me & the way I’ve laid out this information, but your response feels as though you didn’t read or acknowledge the original post (and are potentially acting / responding in regards to past posts / proposals).

It has nothing to do with who is “investing”.

The issue is the fact that projects are assigning Neuron Fund Contributions in respect to maximum allocations, rather than minimum allocations.

This has resulted in many projects receiving beyond inflated Neuron Fund Contributions in respect to the minimum contribution, which is what has typically been achieved in SNS sales, aside from 2-3 rare instances.

You may personally believe it is okay to allow projects to drain the neuron fund, but I am willing to bet this is not a mutual sentiment.

If this continues, without intervention, we will very quickly run into scenarios where projects are receiving fractions of previous neuron fund contributions, due to front running available liquidity (as you’re justifying).

This issue has been acknowledged by DFINITY well over a month ago, an amendment has been promised (hence the rejection of the disabling of the NF) - yet we still see SNS Sales exploit this flaw with DFINITYs blessing.

I’m not going to respond to the rest of your sentences, as I don’t see the relevance they have to this topic & the original post (it seems like you’re trying to take the conversation off topic, already).

Please review the information presented objectively.

I am adding some features to the aggregator I am working on.
One of them has to collect the treasuries and locked tokens in neurons to calculate the market cap precisely.
Currently - treasuries:
Hot or not: 1,074,027 ICP
Kinic: 467,423 ICP
OpenChat: 892,813 ICP

I remember you mentioned the NF is getting a worse deal than the ‘others’ but I can’t find and quote it.
Not sure what you mean exactly. Did the NF give more ICP than it should have? Or did the NF get fewer tokens calculated at a different price? Or do you mean the project valuations are high and are offering a bad deal to NF? Or that they are selling too few tokens to the community & NF and their seed investors are taking too big of a share?

Yes, that could be the cause. All I understood was that maybe you are afraid of a situation where NF pays 400k ICP to SNS Treasury and only 250k ICP comes from direct Dsale. That’s why I asked what you see as a problem here, because I know that both NF and direct investors are decentralized investors and the proportions of their investments are determined by the free market. We can’t help it that the community is unwilling to meet the maximum sales target, but only the necessary minimum before the sale closes.

Repeat the same thing.Would you play an advisor to a tragedy that has been censored many times?

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This is something completely unrelated - as a side note, I looked further into SNS configs, and the way they’re set up prohibits the individual allocation of token supply’s.

So in reality, all forward facing Pre SNS documentation regarding token allocation pertaining to the sale itself, is just inaccurate.

In respect to the voting criteria provided by DFINITY, yes, the Neuron Fund should not exceed 30% of the sale.

Aside from a few rare occasions, the neuron fund represents 40-60% of the sale (while being unable to access the allocation itself, or the governance rewards, without the approval of the NNS, while the functionality isn’t even built out).

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is this correct? I thought the SNS and Neuron fund got the same exchange rate?

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Neuron Fund contributions are not determined by the free market. They’re determined by the entirety of the NNS, which is ~40x the size of the Neuron Fund. You & many other advocates for the Neuron Fund have gone as far as to say that the neuron fund exists for “passive investors” - meaning they’d have no immediate input or ability to revoke their participation.

The minimum threshold exists for a purpose - to set a bar for decentralization sales.

It should not be catered to & manipulated to ensure a successful SNS Sale.

You should review the entire thread before commenting - this has been addressed & needs to be revised.

With that being said, your attempt to distract from the fact of the matter is embarrassingly transparent. I’m starting to think you have a crush on me Borat🥰

I did read the thread and I was confused with this FUD.

So the documentation is wrong then? Easily fixed.

Just because you don’t like information doesn’t make it FUD.

I am asking for clarification in DFINITYs predetermined voting guidelines, as they have already deviated from them countless times.

If you’ve been reading the thread you’d know that pertains to one of many SNS sales, and is completely unrelated. You have not absolved anything.

Ok so what you’re saying is that the SNS sale participants and the Neuron Fund participants get in at the same level?

That’s all I want to know, please be nice.

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Yes that is correct, my previous statement that you have screenshotted in regards to predetermined allocations is incorrect, as SNS sales don’t have access to that parameter. Neuron Fund & Public sale receive the same pricing.

I’m a snipping tool pro, much easier than working out how forums allow you to share stuff.

Well that’s good, and I hope you didn’t accumulate too much ICP just in case it does turn out to be a giant rug pull.

I’m not worried about the ICP :wink: We just have to make sure DFINITY doesn’t shit the bed :sob:

Congratulations, your forum post has earned you 2 CED tokens

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Who short CRV right now?

We should probably take into account the following:

  • the project team doesn’t receive ICP directly from the sale, they evaluate what they have done and ask for everyone else to join them and create a DAO based on that. That will probably make projects increase their valuation by at least 2x. It will also make them want to take full control of the DAO along with their seed investors, so they can be sure they will get paid. As a negative side effect of this - it will disincentivize other developers to join these DAOs, so they will be left with their original teams or whoever they can hire outside of the community.
  • the ICP inside NF will yield rewards. After 5 years, with an 18% annual return, 1 million ICP tokens would have grown to approximately 2,287,757.76 tokens
  • the ICP inside SNS treasury’s value would decrease by approximately 56.29% over 5 years (and decrease 80.89% over 10 years)

I suppose these downsides are one of the reasons projects increase valuation and ask more from NF. It will probably take an economist to actually analyze this picture, but it seems to me that if these DAOs don’t spend their treasuries while making their products better, the value of their treasuries will diminish. This is probably good, you want to allow the newer generations to have a fair chance. You also want projects with funds to get something done fast.
Giving too much to NF has its trade-offs, even if they are not apparent. Probably, if SNS is having too large an NF contribution then NNS is economically incentivized to not allow the SNS DAO to withdraw ICP in large quantities while trying to retain its % of the NNS ICP. (Example: trying to stake the ICP from your DAO treasury will be seen as asking for a higher % of the total pie)

It seems NNS is interested in projects that create value with the resources they were given, not in building up someone’s retirement fund. So there is your tradeoff.

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Cant be that many… honestly I think you should give dfinity a chance. Let us see how the data is in 6 month’s time. IC wouldn’t exist without the core Dfinity team’s continual effiorts. The last thing I imagine they want to do is screw people over.

Not all people are assholes…