Thank you, @bjoernek. Your explanation and link were quite helpful, along with 2-3 other links that I jumped to from your link. I did not read these before.
It appears that buying the initial SNS tokens requires the intermediary ICP token. That is good for ICP demand and ICP lockup, especially since ICP would likely comprise the bulk of the SNS treasury for future cycles and dapp enhancements (paid to developers). I am assuming that SNS tokens could then be traded directly for any other token on a DEX, which means ICP would no longer be required as an intermediary coin to eventually convert an SNS token into fiat currency (e.g., for a developer to pay his or her monthly rent). That makes sense, but please let me know if I have misunderstood this point.
I also like how the majority of initial SNS funds go either to the SNS treasury or to external parties (customers and investors) to prevent a rug pull by the developers. However, will this majority distribution be mandated by the NNS, as Dominic appears to imply in one of his videos (I can’t find the link right now)? Also, would this majority mandate apply to the circulating supply or to the total supply? The latter would include any SNS tokens sitting in treasury, on behalf of which no one could cast any votes to offset a potential rug pull by the developers.
Overall, I like this framework a lot. However, one big problem that I still see with it is that an approval voting process is not suitable for prioritizing the allocation of resources among >2 competing alternatives (e.g., >2 projects of differing value and risk, or >2 developers who contribute value at very different expertise and commitment levels). I brought up this same point for the NNS in multiple posts, such as this one, which was my very first post on this forum 15 days ago:
For the NNS, this collective prioritization problem is not yet urgent due to the lower risk startup stage of the IC, the IC’s nonprofit status, and the existence of a very large and reputable team of individuals currently making the prioritization decisions for the IC within their various dictatorial silos of expertise. By contrast, an SNS would typically be a for-profit organization, where a single entrepreneur would make the many dictatorial prioritization decisions that an approval voting process cannot make collectively. That involves significantly more immediate risk to investors.
This is why I suggested that Dfinity begin to experiment with computational social choice approaches to address this “prioritization chasm” in collective decision making. This chasm currently applies to all DAOs, not just to the NNS or every SNS. I would be open to collaborating on this as part of my PhD research starting next year if there is some interest at Dfinity. In particular, if there is anyone at Dfinity who has some expertise or familiarity with either social choice theory or computational social choice, I would very much appreciate it if you could connect us so that I could discuss whether a collaboration might make sense.
Keep in mind that the breadth and urgency of this “prioritization chasm” grows as an organization becomes larger and larger. The number of resource allocation alternatives and tradeoffs generally grows exponentially and becomes more and more complex, with many overlapping silos of functional expertise.This chasm could take years to cross given the long history of this problem, so I would highly encourage at least some preliminary discussion and experimentation, sooner rather than later. Without solving this problem, DAOs can never be truly decentralized with respect to the most important decisions an organization can make, which inevitably require critical tradeoffs and prioritization.
@diegop, I just saw your post as I was about to hit Reply. I think @bjoernek answered one typical way an SNS could be self-sustaining. However, I too would be very interested in any different ideas that others have, especially ideas from entrepreneurs planning or considering a launch of their own SNS in the future. I am not sure if the typical funding model outlined above could address all of the scenarios that entrepreneurs have in mind. Thanks for highlighting this point from my prior reply, which I forgot to mention again in this post.