Periodic Confirmation of Neuron Followees

[wpb]

This thread is a follow up to the thread Reset Followees for the “All Topics but Governance”. It is an updated proposal based on the feedback from the community.

1. Objective

Decentralized governance cannot be fully achieved without very high participation rates from the voting body. We currently observe 45% of total voting power is cast on Governance proposals, but we have near 100% participation in All Topics Except Governance. The root cause of this discrepancy is that many neuron owners have not configured their neurons with a Followee for the Governance topic, yet they are receiving voting rewards because of default following that was configured for all neurons on the All Topics “catch all” category. This discrepancy in participation rates is an incentive to submit spam proposals for the purpose of receiving higher voting rewards at the expense of others receiving lower voting rewards. This proposal aims to remove this incentive by establishing a minimum standard for active participation in governance that will strongly motivate all neuron owners to actively configure Followees and periodically confirm their selections.

Proposal:

Require neuron owners to confirm their neuron Followee selections every 6 months. The recommended solution is to create a new button and countdown timer prominently displayed at the top of the Neurons tab in the NNS dApp (as well as a manage neuron command) that enables users to easily see how long they have to confirm their Followee selections and to easily perform the confirmation. The confirmation process should include a second confirmation pop up indicating what is being confirmed and why it is important to confirm Followees. It is acceptable for this confirmation to apply for all hotkey controlled neurons that are associated with the principal ID that is performing the confirmation (this avoids multiple confirmations for owners with a lot of neurons). When this confirmation button is first presented in the NNS dApp, all neuron owners should be allowed 1 month to confirm their neuron selections for the first time. All confirmations afterward shall occur at an interval of no longer than 6 months. When the confirmation button is clicked, the countdown timer is reset back to 6 months and begins counting down again. If a neuron holder modifies a followee for their neuron, the countdown timer is reset back to 6 months and begins counting down again. In the event that a neuron owner does not confirm Followee selections before the countdown timer expires, then all Followee designations shall be automatically removed from the neuron configuration.

2. Background

The driver for this proposal at this time is that it will remove incentives for spam proposals that are submitted to the NNS for the purpose of increased voting rewards. This will be explained below, but first it should be clarified that this change is much more important because it incentivizes further improvement toward decentralization. This feature will ensure that all governance participants make intentional decisions about their Followee selections on a regular basis, which should be the bare minimum requirement for active governance participation. ICP is a governance token and the tokenomics are designed to incentivize participation. Staking is not intended to be just a source of yield farming. We should expect that anyone who stakes must remain sufficiently active to know how to participate in governance and are doing so by this minimum standard of active participation.

This action also ensures that none of the public known neurons in the NNS dApp will retain followers indefinitely. It causes all active governance participants to stop to think about their Followee selections. Also, if neuron owners stop confirming their selections for any reason (e.g. they pass away or they lose interest in ICP governance), then their voting power will no longer be permanently assigned to a public known neuron. This helps ensure that public known neurons are always working to attract and retain followers.

All neurons were configured by default to follow ICA (neuron 28) for All Topics when the neuron was created. In many cases, this was not a conscious choice by the neuron owner. It has resulted in many neurons that are not casting votes on Governance motion proposals. This was a huge problem when only 6% of total voting power was casting votes on governance proposals. Now that proposal weights have been implemented, participation is up to 45% of total voting power. This is a significant advance in the decentralization effort and is a direct result of ICP tokenomics being tweaked to incentivize governance participation. These tweaks worked by enabling neurons that are voting on governance proposals to receive higher rewards while neurons that are not voting on governance proposals are receiving lower voting rewards. Yet, the incentives are insufficient. A whopping 55% of total voting power is not voting on governance proposals and the most likely way to get them to start participating is to double down on the previous tokenomics tweak by removing default following for All Topics if the neuron owner does not actively confirm their Followee selections. Neurons cannot receive voting rewards unless they vote and at this stage of ICP and NNS evolution there is no good reason why we should accept that voting rewards are being allocated purely based on default neuron configurations. We can and should expect a minimum standard of active participation by periodically and intentionally choosing to confirm Followee selections.

3. Pros

Reduces the probability that someone will produce spam proposals for personal gain.

Increases decentralization by increasing the total percentage of votes that are cast on governance proposals.

Establishes a minimum standard for active participation in governance in the form of easy, periodic confirmation of Followee selections; ensures ICP tokenomics is rewarding active participants.

4. Cons

This proposal would take time for Dfinity to place on their roadmap and implement, but it does provide time to communicate the change effectively to the IC community.

Over half of the voting power in the NNS is not currently voting on governance proposals, which implies there are likely a lot of neuron owners who will stop receiving voting rewards if they do not confirm their Followee selection. There could be a lot of people who get upset with this change.

The community response to this concern can be provided in simple terms: 1) staking entitles neuron owners to vote, 2) voting entitles neuron owners to voting rewards, 3) voting can occur manually or by liquid democracy through Followee designation, 4) all neuron owners are personally responsible for making sure their neuron is voting if they want voting rewards. These principles have not changed and will not be changed with this proposal. Basically, all neuron owners are encouraged and empowered to remain active participants and configure their neurons so they can earn maximum voting rewards.

5. Alternatives Considered

This proposal is not a complete solution to the proposal spam problem. It removes the incentive that is based on economic gain, but there are other causes of spam including advertisement and announcements. However, this proposal removes the root cause of one of the strongest incentives for spam proposals while also advancing the decentralization effort. If this proposal is implemented, then it will likely increase overall voting participation on Governance proposal topics.

6. Key milestones

A previous version of this proposal has been in deliberation for the last week. This revision has been scoped based on actionable feedback that we received during that deliberation. This new proposal will be deliberated until at least April 18 and will then be submitted to the NNS as a governance motion proposal in coordination with other proposals that will be made in a similar time period.

7. Discussion leads

Wenzel Bartlett (@wpb) and Kyle Langham (@Kyle_Langham) will lead this discussion and submit the proposal to the NNS.

8. Security concerns

No security concerns have been identified at this time.

9. What we are asking the community

• Review comments, ask questions, provide actionable feedback
• Vote accept or reject on NNS Motion

[levi]

Why do you keep trying to take away voting rewards from people who are following other neurons? This is nuts. Every 6 months?!! Following other neurons is a great thing, most people don’t have the time or brain space to keep up with the nns or the proposals, and letting their neurons follow another trusted neuron is their contribution to the votes.

[wpb]

That seems like a mischaracterization of this proposal. We don’t want people to miss voting rewards. We want people to participate in governance topics and ICP tokenomics is clearly designed to incentivize participation. This proposal also does not discourage people from following other neurons. It proposes to give people a very easy way to confirm their Followee selections as a minimum standard for active participation. In our opinion, set and forget should not be an acceptable norm for a governance token.

[coteclaude]

I fully agree with more active participation in the voting. I was my understanding that ICP should not be seen as a Staking rewards system but a governance token where you get paid because you perform some work. By the way, the vast majority of governance proposals are very easy to understand and it takes 5 minutes per day to vote on them all manually. 10 minutes if you do every 3 days.
But it was sold to many investors that ICP stake for 8 years was a great passive income. So I do not blame investors, who got in with the passive promise and now face a change, not to be so happy.
@wpb can you comment, explain, on this tweet of last August?

[skilesare]

I’d prefer to encourage active participation and management rather than force it. Maybe if this was every four years and we had a big people party and it happened during ICCon or something like that, but every six months does seem a bit too often. Something on the order of the HALVING on BTC might be a better time period.

[doo]

Using money to drive people to do things they don’t like is no different than submitting crap proposals… It would help pledgers a lot if they added tutorials and reminders corresponding to each step in the neuron configuration Followee, 6 months of updates is too costly for users to forget.

[wpb]

Yes, I can explain it. It’s my staking strategy for ICP back in August 2021 made in reference to my staking strategy back in May 2021 made in response to some post where someone else was asking I don’t know what because you chose to link an image instead of the full reference. Nonetheless, my staking strategy still hasn’t changed today in April 2022. I don’t vote manually on every proposal. I suspect you don’t either. Otherwise you would be logging in to the NNS dApp every 10 minutes to vote for exchange rate proposals.

@coteclaude what point are you trying to make about the merits of this proposal? How do you think this proposal differs from what you interpret from that tweet? I don’t think that tweet is inconsistent with this proposal.

[Zane]

I suggested something similar a couple months ago, happy someone formalized it. In my opinion renewing followees isn’t just about aiding with the spam proposal issue but NNS governance as a whole, IRL we have election every couple years to confirm our support to a party, the same should happen on the NNS too, it incentivates people to keep up with governance and prevents neurons from keeping voting power they don’t deserve anymore (i.e deceased neuron holders, lost neurons etc…), the only issue I can see with the system is scripts to autoconfirm followees might be developed.

[Zane]

If you don’t have time to press a button twice a year then you don’t deserve rewards and shouldn’t be staking in the NNS in my opinion.

[coteclaude]

I fully agree with your proposal. Like you, I see ICP as a governance token and receiving rewards because you are involved with the network governance. In fact, if it was me, all governance voting should be done manually.
To answer your questions: I did not copy the link as I fell on a retweet from Kyle, pure coincidence, and use the fastest way to get the info. No malicious intent at all here.
Also, for your suspicion on how I vote, I vote manually on all governance proposals every day. Of course, voting on the exchange is useless and I don’t even understand why there are votes for these. Same with all high technical upgrade where I am not qualified to vote on.
I did not said the tweet is interfering with the proposal. What I am saying is that those tweets, from many people, have lead people to see the NNS as an easy rewards staking tool where you stake for 8 years and sleep on it. Now, I would understand some investors not to be happy about the changes where they have to do something. It will not apply to me. I have to admit, I am not in favor of changes when you sign-up for something, you are locked in, then the rule change. Not very comfortable with this way of doing things. I am all for changes and progress. But when there are some changes, investors should have an option to get out.

[wpb]

I agree that confirmation could be automated. I’m not sure that’s a problem though. In a way it is an active step toward meeting a minimum threshold for active participation. I wouldn’t want this automation made available through the NNS dApp, but if someone finds it easier to write a script than pushing a button twice a year then more power to them. That kind of active participation seems to meet the intent of the proposal.

[Zane]

I think it kinda defeats the purpose of this proposal, at the very least there should be a captcha when confirming a followee.

[wpb]

Ok that makes sense. Thanks for the clarification.

By the way, I also agree with your comments about voting on exchange rate proposals. It seems unnecessary. Their benefit from a tokenomics perspective is to ensure daily voting rewards, but their drawback is that they dilute incentives to participate in governance proposals.

[wpb]

I like that idea too.

[Kyle_Langham]

In my opinion, your point regarding political parties is the best mental framework for understanding this proposal. The current state of the NNS is the equivalent of signing up for a political party when you reach voting age and then that being your default vote for all future elections unless you actively change it (including after your death!). This proposal would make the NNS more like a bi-annual election where you confirm your political party.

[kusiyo]

This proposal seems a little “paternalist”. “Set and forget” should be an acceptable norm. Any “minimum standard for active participation” is meaningless. A right without the right of abstention is not a real right. Indeed, we should add an abstain button to the existing adopt-reject system, and any neuron not voting should be considered as abstaining automatically. Don’t forget that we come into the blockchain world for freedom, not for something else.

[kusiyo]

Everyone deserves ICP, if ICP is good. We should be nicer to all the ICP hodlers, since they are already hurt more or less by the price “dumping”. NNS is not perfect, but in my opinion it is already the best DAO all over the world and even throughout the human history. And I do think NNS should be designed by Minimalism. Don’t make it too much complicated because it may scare people outside the IC community. We should welcome more and more people into ICP instead of making it a zero-sum game.

[LightningLad91]

@wpb @Kyle_Langham I believe there is good intent with this proposal and I think there are solid reasons to adopt it. Kyle said something on his podcast that made a lot of sense. Something along the lines of “if a stakeholder dies without transferring their Auth device do we really want their voting power going to the same neuron forever?”

That being said. I would appreciate if you consider adding an initial 6 month delay from the day this proposal is implemented. By that I mean that if/when this change is pushed to the NNS it would set all existing neurons to a 6-month countdown before the initial reset takes place instead of a 1-month delay.

1 month seems too short given how long it has taken existing stakeholders to update their follower settings after the last reset. Also, Dfinity may need extra time to push this same functionality to the ledger app for seed investors who may not be capable of updating their settings.

[wpb]

@LightningLad91 thank you for this suggestion. I think we may be able to compromise on this detail, but 6 months from implementation is too long in our opinion.

The notification to the community about this change, if adopted, starts on the day this proposal is submitted. We don’t know how long it will take Dfinity to develop the code to make these changes, but if proposal 34485 is a good indicator then it would suggest 2 months. That would mean 8 more months of incentives for spam proposals if 6 months were the initial Followee confirmation period. We would much rather see incentives for spam proposals eliminated within the next 3 months, which is how we arrived at an initial confirmation period of 1 month. I’d rather see it advertised and promoted by the community and by Dfinity that this change is coming the moment this proposal passes…if it passes.

To be honest, I don’t think advance warning is what will drive people to confirm their Followees. I think the financial incentives that this proposal intends to activate is what will be the most effective tool at getting people to recognize the need to periodically re-commit to their selections. Just like implementation of proposal 34485, I expect there to be very little participation until the financial incentives exist to drive participation. It only took a few weeks to see significant changes. The majority of that happened after the voting rewards actually changed, but there was relatively little movement until they changed.

Do you have an alternate suggestion for how to word this detail in the proposal in a way that targets 3 months from proposal submittal as the turnaround time for asking everyone to re-confirm their Followee selections?

[wpb]

Perhaps a solution to you concern could be a separate proposal asking dfinity to provide announcements of pending and past tokenomics changes in the NNS dApp. These announcements could include approx timing, high level summary details, and links to forum topics that describe more details. That puts these announcements exactly where they are needed the most and gives visibility to the changes at a time when people are already thinking about neuron configurations and governance participation.