Hi all, we plan to submit the following motion proposal shortly. We have a few ideas for longer-term improvements, but as they would take longer to discuss and implement, we propose to start with this and discuss further improvements in future forum posts (once we have a better overview and proposal).
TL;DR
DFINITY proposes to pause the Neuron’s Fund. This would prevent the creation of SNS proposals requesting a Neurons’ Fund contribution but still enable SNS launches without Neuron’s Fund.
Problem
The idea of the matched funding algorithm was to take the swap activity as one signal of how popular and promising a project is and adjust the Neurons’ Fund contribution accordingly. One downside is that the dapp owners can participate in the swap with their own tokens and thereby make their project look more valuable than it is. Therefore the community raised concerns about the current Neurons’ Fund matched funding design. As this may result in a loss of trust in the SNS framework we think it is important to take action.
Proposed action
As an immediate action, we propose to pause the Neurons’ Fund by a change to NNS governance. A submission of a proposal requesting contributions from the Neurons’ Fund would always fail - such proposals could not even be created. SNS launch proposals without a Neurons’ Fund component could still be submitted as of today.
Alternatives considered
The NNS could just agree to reject all SNS proposals that request a Neurons’ Fund contribution. This is an approach that was also proposed by some community members. DFINITY agrees that this is a valid approach and plans to reject all proposals with a Neurons’ Fund request (in case this motion is adopted, until the proposed change is implemented). If the NNS agrees that this is a measure that should be taken, we think it is still worth to additionally enforce this in the code. This is not only a stronger, more reliable measure, but also makes it easier for NNS voters to understand what they need to vote on.
Going forward
This immediate action gives the community more time to think about how the Neurons’ Fund mechanism can be improved and discuss and propose such changes in future proposals.
Thank you for taking these measures and writing this up @lara. I personally fully support and appreciate this decision, and I’m looking forward to reading and engaging in future discussion about Neurons’ Fund improvements.
@lara I want to commend you for taking the initiative to address the issues with the Neuron’s Fund. Your proactive step to pause the fund is a critical move to safeguard the SNS framework and ensure it supports real innovation. I’m fully behind this decision and appreciate your leadership in listening to the community’s concerns.
I’d love to collaborate with you and the DFINITY team on this. I’m open to discussing potential solutions or brainstorming ways to strengthen the funding system for the ICP ecosystem. Let’s connect and work together toward a more transparent and effective future!
Yeah, I think this is for the best. Projects should really be thinking about launchpads after they’ve figured out actual revenue or at least some form of product-market fit. That whole 2021 VC-style approach doesn’t work anymore, back then it was pitch decks and vibes(with some trust me bro in the mix), now it just leads to unfinished projects, ghost teams, and wasted resources.
The ecosystem’s maturing, and SNS needs to reflect that. Higher standards will actually attract better builders and give voters more confidence. The Neurons’ Fund idea wasn’t bad, but the way it could be gamed made it hard to trust. Felt like watching someone bid on their own auction and then ask for a prize.
Taking a pause makes sense. Gives everyone time to rethink it properly. Better that than pretending the current model is working.
Hi @lara@Lorimer,
One possible approach to improving the accountability of Neurons’ Fund allocations is to introduce a structured disbursement mechanism. For example, if a project raises 120k ICP from the community and receives an additional 100k ICP from the Neurons’ Fund, the funds could be released in stages:
Initial Community Funds Usage: The team can fully utilize the 120k ICP raised from the community as they normally would.
Milestone-Based Unlocking of Neuron Funds: Once the community funds are depleted, the team must present a progress report and defense detailing what they have achieved so far—code development, partnerships, milestones, or any relevant KPIs.
NNS Oversight & Decision Making: The NNS (or a designated committee) would then review the progress and determine whether to unlock the remaining 100k ICP or revert it back to the Neurons’ Fund. This step ensures that projects remain accountable and align with their stated goals before receiving further funding.
By implementing this structured release mechanism, we can achieve several benefits:
Increased accountability: Teams must demonstrate tangible progress before receiving additional funds.
Reduced risk of fund misuse: Ensures that capital is used effectively rather than being front-loaded into potentially failing projects.
Enhanced trust in the Neurons’ Fund: Encourages the community to support funding proposals, knowing that funds are not handed out in full without accountability.
This is just one potential approach to refining the Neurons’ Fund mechanism.
Open to feedback and further discussion!
Yulin
Hey @lara would you please provide an update on when the community can have access to the neurons that they own by participating in the Neuron’s Fund? I have many Neuron’s Fund neurons because I initially believed that I would eventually have access to them, but after a while I realized that is wasn’t a good way to participate in SNS launches and started making direct commitments instead. I would like to be able to increase the dissolve delay on some of the neurons and to dissolve and disperse other neurons. I would also like to be able to spawn maturity that has accumulated. At what point in time will we be able to have a conversation about the path forward for giving neuron owners access to their neurons?
My hypothesis at the moment is that DFINITY is the majority contributor to the Neuron’s Fund. If that is true, then it seems the risk of flooding the market with SNS tokens from the Neuron’s Fund is very low. Hence, I’m not sure why we need to continue blocking access to these neurons for the rightful owners. I don’t think the Community Fund, which was renamed later to the Neuron’s Fund, was ever presented as an indefinite investment. Hence, it would be nice if we can start talking about the exit strategy for contributors, especially since we are now talking about suspending the fund and redesigning it completely.
So if what you’re saying is correct you would have put a maximum of 557 ICP into the Neurons Fund, as all the principals above that in the list don’t fit the pattern of initially contributing and then stopping.
That’s a maximum of 0.01% of the Neurons Fund. All I’m saying that I wouldn’t pester the foundation to add this feature right now, especially with everything else that’s going on.
There are 275 people who have contributed to SNS projects over the last couple of years through the Neuron’s Fund and have almost no control over the neurons that they received. I realize that you (principal ljxsi) are the 6th largest contributor to SNS projects and that none of those contributions have been via the Neuron’s Fund, so maybe this issue isn’t important to you. However, the Neuron’s Fund was made available for anyone in the community to participate and at some point we have to start talking about how those contributors will be granted control of their neurons. Since we appear to be making major changes to the Neuron’s Fund framework, it seems now is a good time to start talking about it.
Thanks for the question @wpb. We aim to have an idea of this by the end of the year. Having more liquidity for SNSs projects is likely a prerequisite for this design and we would like to tackle this as one of the next things.
We agree that it should be very easy for SNSs to offer exchanges with other tokens and that users should have an easy flow from their NNS dapp to trade their tokens.
However, rather than a built-in swap we are currently thinking about whether it would make sense to just integrate the NNS dapp more with existing DEXs where tokens can already be swapped.
