Possible Optimizations of NNS Tokenomics (Updated!)

I don’t think that’s a brilliant idea. A lot of coins would be released in a short period of time and then I’m curious to see how the price develops. You just have to burn a lot more, then it will lead to the goal. There is a high risk involved in not liquidating and this should be rewarded accordingly.

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Actually, I think it would be good to implement reconfirmation for non-dissolving neurons, since there will be lost wallets, and over time vast amounts of ICP may be staked that will forever dilute supply with rewards that will never be claimed.

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A lost neuron won’t increase supply since you get maturity not ICP as rewards and maturity only increases voting power. Loosing access to a neuron is thus deflationary.

CMC status is important.
But it’s also reflective of success.

ICP has potential that still needs to be converted into success.

At this time, inflation is only a problem for those who are not fully invested in ICP. For those who believe in its success, patience has been and will continue to be a virtue.

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The maturity is basically ICP, and while it’s true that we are receiving rewards in maturity now, that may change in the future. In my opinion, rewards should be given only to “active” accounts, so reconfirming activity every few years would have a beneficial effect.

No it’s not. As long as you don’t disburse maturity, ICP is not affected in any way. Not even rewards are affected since the amount of maturity minted per year depends on the total ICP supply and not staked maturity. If noone would disburse maturity to ICP we’d have effectively no inflation (neglecting node provider rewards).

By giving rewards only to active accounts the probability of higher inflation is in fact higher since active accounts are more willing to disburse maturity than inactive ones.

You do know that maturity was not the thing at the genesis, and it was changed later on through a governance vote. Who is to say that it won’t be changed again, especially since, in some jurisdictions, it could be viewed as tax evasion?

The main thing is, do we want any kind of rewards for lost wallets?

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Of course everything can be changed in future. But why discussing something hypocritical that is not relevant for the present?

I don’t see any need for not giving rewards. It’s simply not relevant IMHO.

It’s always wise to plan ahead for future events.
I’m not saying it should be done; that’s up to a possible governance vote.
I’m simply gauging others opinions on the matter.

Thanks, yeah I didn’t know it worked. I did a test on two small neurons over just a small amount of time, so it may be inaccurate. But I noticed the neuron participating in the neuron fund received less in maturity than the other one. Why would this be?
Because I was considering putting more of my main neuron in the neurons fund but as long as the rewards were the same as if I wasn’t participating.

But they seemed to be less? Is the maturity return on participating in the fund supposed to be equal to the regular return or is there some other variable?
Thanks

Thanks again for explaining that.
Who are the users/controllers of NF who receive these tokens?
Are these the NF participants or the actual NF itself?

But yeah I get your point that the price difference makes it irrelevant.

Serious question here, if anyone could answer, can the Internet Computer sustain a price of $0.5 - 3 during another bear market…?

Will this price cause it to inflate faster like Luna? or are there proactive measures in place against this happening ? Asking because I hear all node providers are paid in a fiat-rate, irrespective of $icp price/market cap/liquidity

Your suggestion of simply increasing the trend to 0% or 1% as opposed to stopping at 5% seems simple and effective in regards to solving the problem over a long time period

inb4 deathspiral FUD

BTC is near its ATH, if it dumps into another depression within the next year is it really FUD for icp to prepare for a potential low price, seeing as we are inflating incredibly quickly either way at the moment

Otherwise icp will literally print over the whole of the BTC supply every year with current supply and above 5+% inflation, which would increase further if we dump again. Not a good look

Maturity was a thing at Genesis

maturity modulation wasn’t a thing at genesis.

Neurons received voting rewards as maturity, which they could use to mint new ICP tokens.

In the end, maturity has always been used to Mint New ICP tokens → inflation.

Are neurons the Bonds of ICP? does that Make DFINITY the federal reserve?

Unlike Luna, ICP doesn’t allow conversion of cycles into new ICP tokens. Burn happens only 1 way, i.e. burning ICP for Cycles (computation gas)

Only way you can mint new tokens is by

  1. Node Provider (NP) rewards → fixed and managed manually by DFINITY, distributed by NP Reward proposal
  2. Voting rewards → Maturity used to mint ICP tokens
  3. A tokenomics proposal to mint tokens by the NNS (theoretically possible)

Death spiral shouldn’t be a threat unless the price falls too low for a long time and there are thousands of nodes that need to be compensated while accounting for this low price action, since NP Rewards get calculated in Fiat, not ICP tokens.

Example

Lets assume that Node Provider rewards are $1,000 per month for 1 Node.

If ICP price is $100 USD, then Node Provider rewards distributed to them will be 1000/100 = 10 ICP tokens

If price of ICP is $1 USD, then NP rewards will be 1000 ICP.

On the other hand, fixed inflation and deflation is healthy for good economy, especially in blockchains since they guarantee immutability and no central authority is able to modify tokenomics however it wants and whenever it wants.

Modifying tokenomics with low quality proposals only ruin the credibility of the blockchain.

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The controlller of NF SNS neurons is the NNS. However, individual members of the NF (i.e. the controller of NF NNS neurons) receive hotkeys for NF SNS neurons linked to them, so that they can vote and define following (see also the explanation here).

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Moderator’s note:

TLDR: I am locking this thread, but not because of any bad behavior, but because I have gotten a lot of feedback that its too large to properly digest properly. Too many ideas and comments. New ideas can come from new threads.

In fact, one main comment which many people missed was this one:

In this comment, @bjoernek is writing on behalf of DFINITY explaining why DFINITY got the feedback Dom was looking for, and DFINITY decided to not pursue the proposal further.

There is even a new thread about it here: Analysis of Proposals on Neuron Dissolve Delays and Exchange Maturity

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