@borovan @darwin @infu you might establish a working group or start collaborating on this?
Evaluate the governance implementation of the WaterNeuron DAO to ensure it does not concentrate power in the hands of a few, but rather distributes decision-making and oversight in a more equitable manner.
The official WTN tokenomic breakdown shows that 52.2 % of all WTN is held in the Treasury, 24.7 % was allocated to the SNS sale, 19.3 % went to early contributors, and only 3.9 % was airdropped to nICP stakers.
By default, WaterNeuron mirrors NNS’s mechanism: voting power and staking rewards scale linearly with the amount staked (quantity × maturity × dissolve delay × age). This proportional model inherently advantages large holders (“whales”), since they receive a larger slice of any fixed reward pool.
As whales compound rewards and reinvest, their share of total staked WTN grows faster than that of smaller participants. Over time, this exacerbates centralization and squeezes out mid-sized and retail stakers.
While don’t know exact on-chain yield formulas, the parallels to NNS governance and observed forum concerns (e.g., accusations of pyramid-like dilution) underscore the urgency to audit and recalibrate.
To preserve broad participation and decentralization, the DAO must introduce non-linear reward mechanisms that dampen marginal gains for the largest addresses and boost relative yields for smaller stakes.
You might have more information on the second sale? You might consolidate information spread across this forum into a single thread? As we need to implement checks and balances, as well as transparency measures, to mitigate the risks of the DAO becoming a centralized force within the ICP ecosystem.
@1eo, I understand the solution you’re building has significant ecosystem implications. Rather than demands, I propose we collaborate to ensure it promotes transparency, accountability, and decentralization - the core principles we both value.
I suggest the following measures:
Encourage large neuron holders to voluntarily disclose their stake and identity, if they are comfortable doing so, to demonstrate their commitment to transparency.
Develop a transparent, decentralized dashboard that allows the community to view aggregated metrics on neuron distribution, voting activity, and governance processes.
E.g. publish regular reports on the overall distribution of stake, showing the percentage of total supply held by different tiers of neuron holders (e.g., top 10%, top 50, bottom 50%). This would provide visibility into concentration levels without compromising privacy.
Explore ways to abolish or mitigate entry barriers, such as the tax implications of auto-reward distributions, that prevent a broader base of participants from increasing their stake. Lowering these barriers could encourage greater participation and decentralization of the network.
E.g. implement lock-in multipliers for small stakes: Offer a small multiplier on yields for stakes below a certain threshold that commit to a minimum dissolve delay (e.g., 2 years).
This encourages long-term commitment from retail and mid-sized stakers, deepening decentralization.
Let’s collaborate on a formal community proposal outlining this and other measures to strengthen decentralization. Increased visibility into voting power distribution is crucial for fostering trust and preventing undue influence. I’m optimistic we can chart a path that upholds the Internet Computer’s core tenets.
