Thanks @wpb and @Lorimer for explaining your position. It sounds like we agree with the design except for how the rewards are computed.
I think we can split the points of open discussions / where we might currently disagree into the following ones.
- If the full reward pot is always distributed among active voters, would this overall have a positive effects?
It was argued that it could be beneficial if the rewards per neuron are higher when there are fewer neurons as this could incentivize new neurons to join when this is more needed. This is an interesting input. A potential counter-effect of this could be that if rewards are distributed among active neurons, it is not in the (financial) interest of current active neurons to motivate others to join the NNS. It is therefore unclear if overall this has a positive or negative effect towards the decentralization goal.
- Is it beneficial to have less rewards (and thus less inflation)? If so, should this be achieved by lowering the reward pot?
I don’t fully understand yet if we mainly disagree on the first point or if you would also be in favor of decreased rewards but just advocate for implementing it differently.
In general, this seems to be a matter of opinion: Different people (e.g., links above) think it is beneficial to decrease the rewards as they are a main contributor to tokens being minted while others might not agree. If rewards should be reduced, it is unclear whether this should be done as suggested in the design or rather by just decreasing the reward pot.
As was mentioned, one idea when introducing the current reward mechanism was that the portion of the sleepers that is now forfeit could be used for other purposes. This might be connected to an upcoming feature where we want to think about how the incentivisation of voting neurons can be built into governance. This will likely also require some form of rewards, that could be taken as a portion from the followers, from a new reward pool, or indeed from this currently unused portion of the reward pool.
All of these choices have different implications for the rewards that are minted overall (and hence inflation), for rewards for the non-sleeper neurons, and for the rewards for actively voting neurons.
We think it would be very natural to separate the discussion about rewards from the periodic confirmation design and rather include it in the larger discussion of how rewards can be designed:
- If we implement the currently proposed design, we would not change how rewards work and keep the status quo. The proposed design does not exclude any future direction for rewards (we could still decide on a next step to distribute rewards based on the adjusted voting power).
- As illustrated by the thoughts above, the reward topic is closely related to the topic of how we can further incentivise voting neurons.
- We think it would be beneficial to conclude this discussion with a decision that allows us to move forward with some implementation while we keep discussing other aspects of governance that can be separated.
For these reasons, we plan to submit a motion proposal that proposes to replace the original motion proposal with the refined design here. We could explicitly mention in the motion that it does not exclude any future direction for rewards, to ensure that we can separately have more in-depth discussion about this aspect.
I will not manage to draft the proposal this week, but plan to do so early next week.
