Node Provider Inflation Spiral

[ckMood]

@bluesteel

The problem is this. We are operating at a loss and nodes are still being added to the network faster than they are required by Apps. Investors are accepting more and more nodes through proposals every time a proposal comes in, and essentially, for want of a better word, fucking themselves to the benefit of the node providers. See proposals 124507, 124499 and 124524 which are currently going to pass.

Investors needs to pause and reject these proposals. There needs to be a view we have (as decision makers) which shows us where we are capacity wise, we should only be adding nodes when they’re needed, either geographically or by capacity, else we (investors) are the ones complaining about what we are causing.

I agree, we need to pause and actually increase the user base and activity to justify all this node adding. We don’t have to operate at max capacity of the nodes and data centers but we certainly could stand to increase the demand for the Internet Computer overall. In another thread created by @erikblues on this topic he said this regarding rewards:

"But there is nothing making sure that there is a balance between those two:

• if there is MORE demand from dapps, it starts burning ICP faster.
• however, and here’s the kicker: if there are too many nodes, they keep generating ICP tokens, but those tokens arent used by any apps because there is no demand for it.
• and there is nothing stopping more and more nodes from being added to the network. There is a vote to decide on new nodes, but once a node has been accepted, it receives 100% rewards even if the network goes through a bear market, and even if all dApps stopped running. Nodes just keep getting rewards regardless. This is, in my eyes, an oversight.

To solve that, ICP would need to have a system in place that works like a free market regulating itself:

• if there’s a shortage of bananas on the market, the price goes up.
• if there are too many bananas on the market, the price drops."

I believe this would keep things balanced as well as incentivize developers to create useful and compelling dApps and manage them because currently there is very little with this inflation as well situations going on with DAO treasuries as discussed in this thread: !ONLY “1 ICP” IN ICX’S SNS ICP Treasury! What is the Warning!, the Reflection!, the ACTION! for us?!?!?!

@bluesteel

Maturity needs to stop being paid ASAP. I suggest any maturity that would have been paid goes into a weighted pot for future “dividends”, so people who are invested now get more than someone who comes along once we are deflationary.

I’m not opposed to this but I could see this being potentially very upsetting to a lot of people who are not apart of these conversations and don’t understand what’s going on in the background.