After reading all the comments, YES! that would definitely the best solution.
You stake 100 ICP
You gain 1 maturity
You use that 1 maturity to “free” one of your ICP’s (instead of spawning it)
You have 99 ICP staked and 1 “free maturity”
The reason this is appealing is because of tax-reasons, because you are able to substitute your locked ICP over time, so it isn’t “realized” which creates a taxable event.
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It’s really encouraging to see the active and vibrant discussions in here but I have to ask - why hasn’t this been implemented yet? This will have the largest impact by far on inflation and ensure the community is most active in governance
Not only that but there is plenty of precedent in other networks doing the same — for example in DOT or ATOM networks you have to check and make sure your validators are still active and participating, otherwise you won’t earn your rewards.
Didn’t the proposal for this already pass too @dominicwilliams
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Would this mean if we opted to keep out >5 yr (ie 8 yr) we wouldn’t be able to add to it? Just wondering
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In a top-up sense at the very least - yes - with accruing maturity probably also, but that is more debatable.
The problem with allowing top-ups is that someone could buy a neuron with 1 ICP (EDIT: that was already staked for 8 years) and add 999 to it and suddenly have circumvented the entire “8-year-gang” concept.
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I’d not considered that but then i’m just a small fry and couldn’tif I wanted to, all pro’s and cons though I suppose as I probably wouldn’t be able to hit my target of 111 staked on this neuron so would probably look to offload for liquid and have to put into the 5 yr one
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No, after the one-time choice to keep our >5 yr (ie 8 yr) neuron, topping up the neuron would become impossible.
As he stated in the reply.
So at earning 0.01 per day, I suppose i’d have to unload to get the liquid to pop into a 5 yr neuron if I couldn’t top up
Ahh waw, that is a nice explanation.
Right, so the proposed is “tax neutral”
but the current model is, if I “spawn,” that equals New ICP which equals New Income which I have to pay taxes on. Is that right?
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that is a way better proposal
dont hurt the current 8 year gang
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Yes, basically the 100 staked ICP that can be freed should be tax exempt, because you already paid tax on them once. As far as I understand (not tax advice) with most traditional tax-systems this is not the case for maturity, because it is a bi-product of your taxed asset that hasn’t yet been taxed.
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Hello everyone,
I want to express my appreciation for the ongoing discussions surrounding adjustments to our tokenomics. It’s clear that many of us, as long-term participants, have a vested interest in the potential changes being proposed.
One important consideration highlighted in these discussions is the perspective of those who have committed to an 8-year lock-up period. For many of us, this decision was made with certain return expectations based on proposed schedules. Therefore, any proposed reduction in the lock-up period coupled with decreased rewards may not align with our original motivations. The 8-year-gang for the most part was going to be around way longer than 8 years with some possibly not even hitting that dissolve buttons until many decades later. Keeping that in mind lower the dissolve to 5 years fails to be a valuable incentive for this cohort of contributors.
One potential solution that could be explored is allowing current 8-year holders to maintain their existing APY schedule, provided they refrain from adding to their neuron. This approach would acknowledge the expectations set when capital was committed for an extended period.
I’m grateful to be part of this community and value the contributions of all members in finding solutions that benefit us collectively.
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I think this is a reasonable adjustment to Proposal 1, as it provides some degree of control as well as preparation time for those currently in > 5 YR stakes. It also would allow somewhat of a “grandfathered in” situation to early supporters.
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I believe you need to take into consideration the high interest rates in the US. Right now, I took on debt at a rate lower then the APY gained from current t 8-year $ICP. By lowering this to 5-year, you’ll lose out on those capitalizing on that difference. In addition, whether 5 or 8 years, the majority is locking until minimum retirement if not for life. I think you’ll have LESS people locking the max which will limit the current benefit of dwindling supply.
When supply lowers, the price will eventually go up. I think inflation needs to be combatted with utilization and burn.
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Thanks for taking the time to share your thoughts. This is very interesting indeed.
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This I can definitely get behind! It addresses some of the sentiment comments I made earlier and this proposal is better aligned with investor behaviour for decisions to be made, and that have been made in the past. I am supportive of a change that will surely have a positive impact on the network and it’s tokenomics whilst still ensuring people feel supported on long term investments they have already committed to.
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This sounds fair to me, but I hope I can still top up my 8year neuron with my staked maturity.
It should only be impossible to top up the >5 neuron with new ICP.
Ilike the exchange or „free“ your stacked ICP for maturity, too. At least this is how I understand proposal 2.
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Some scattered ideas:
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Increasing cycle usage = need for cycles = deflationary ICP. Why doesn’t DFINITY subsidize running crypto architecture for other projects. Run an Ethereum RPC. Or validators for some other project. This would burn cycles (reverse gas model but DFINITY would foot the bill) and allow for other projects to see the power of DFINITY actually have an effect on their network. It is tough for any crypto project to take a leap and run infrastructure on ICP - for now. Why not DFINITY lead the way and help to burn some cycles themselves?
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Pay 8 year neuron’s maturity from DFINITY’s own treasury for a set period of time.
This forum post is moot because in the end it comes down to a vote via the neurons and we all know who holds the majority voting power. If DFINITY did not hold the majority vote then all neurons would vote for what is most economically favorable to them - which this proposal is not.
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*DFINITY does not have the majority power but it does hold quite a large amount. I wonder if a proposal to reduce rewards would even be voted in by neurons if DFINITY only has ~20% voting power.
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One additional point to consider here is that DFINITY is currently Reevaluating Neuron Control Restrictions, which will make it much easier to transfer control of neurons. This change will then make it significantly easier for secondary neuron marketplaces to pop up without needing to sell the attached Internet Identity, decreasing the commitment and “risk” that an investor makes when purchasing ICP and staking it for 8 years.
While an OG system works with fundraising and gamified achievement systems, the Internet Computer is a mature, decentralized network. Any two-tiered approach will result in unintended side-effects of grandfathering in 8-year neurons, such as secondary neuron marketplaces.
We already have IDGeek, which has facilitated the transfer over 170k ICP (~2 million USD) worth of “locked” ICP assets, and has 22k ICP (~250k USD) off assets listed for sale. If a “grandfathered”, two-tiered approach does end up passing and allows investors to keep their >5 year neurons, we’d undoubtedly soon see 8 year neurons going for significantly higher prices on these secondary marketplaces.
Therefore, I do not believe we should create a 2-tiered system between the “OGs” and the present ICP stakers, just to make everyone (e.g. 8-year neuron holders, of which I am one) happy?
It follows that the fairest approach is for the change to apply to both new and existing neurons.
The real question being is if current 8-year neuron holders have the long-term inflation interests of the IC in mind, or are nearly thinking “short term” about their APY. It’s sort of funny how people can have short-term thoughts while holding long-term neurons.
A decentralized network requires active participation. Investment in the NNS that votes and stays up to date, not an inflated rewards system that allows people to passively sit on their 8-year neurons and complain about necessary long-term changes, which may seem painful in the short-term.
This theme of active participation ties in nicely with some of the other approaches to reduce inflation raised by @LightningLad91, especially periodic confirmation of followees.
As for the note on periodic confirmation of followees, one can put the date far enough out there (4th anniversary of the IC in 2025) and give people 6 months to reset their followees. DFINITY has a strong social reach on email marketing and socials, and the ICP community can also do their part. The community already voted in favor of the proposal, so it’s a relatively light engineering lift awaiting implementation.
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