Proposal for the management of the NNS treasury through Steering Committees/Neurons

Having an NNS treasury that can fund community projects/efforts directly through the NNS and independently is a great idea, but managing fund disbursal through NNS wide votes is problematic. Certain groups/orgs are going to be over represented and small projects/ fringe areas might be disregarded, not to mention distribution is going to be tied to stake which is not ideal (as several other posts in this forum suggest)

This is a proposal for the creation of Steering Committees to manage these funds. Under this proposal, treasury funds would distributed to and managed by a group of new type of neuron (let’s call it a Steering Neuron). These neurons would have no controller (would be managed through manage neuron) and the managers should be well known community members/groups that have known neurons. This means they can’t disburse the stake (reduced inflation), and thus can only spawn neurons from the maturity accrued from their own voting, which would represent the community donations/investments.

Here’s how it could work:

  • Add a tag/index that identifies a neuron as a Steering neuron (much like we already do for known neuron). To be “promoted” to a steering neuron, a normal neuron must have: 1) a blackholed controller 2) be following at least 3 neurons on the manage neuron topic 3) all the neurons followed on the manage neuron topic must be known neurons. This also introduces and element of reputation which is important.
  • Whichever way the treasury is funded, the funds distributed equally among the Steering Neurons and automatically staked. Since these neurons are blackholed, and manage neuron can’t disburse stake this stake can’t ever be taken out and can be considered burned.
  • The maturity from voting rewards of Steering Neurons is at the disposal of the known neurons that manage them to be distributed to the community however they see fit, through spawn neuron.
  • The NNS has the ability to “promote” and “demote” neurons from being Steering Neurons.
  • There should be a minimal number of Steering Neurons promoted before any funds are distributed to encourage diversity of representation and to avoid too many funds to accumulate in any single neuron before others have a chance to join.
  • Like Known Neurons, Steering Neurons should have a description that includes an investment thesis and/or particular area (e.g. DeFi, SoFi etc) and the promotion process should vet that the known neurons that manage that neuron are going to be reasonable champions of the thesis.
  • There should be a public record (likely off chain, but traceable to the chain in the form of ledger transactions etc) where every single disbursement goes, identifying the recipients and the justification for the disbursement (total transparency) under penalty of “demotion”.
  • Steering neurons accumulate their own rewards like any other neuron (which are the only funds that can be distributed) but can only vote while they are “promoted”, otherwise they can’t vote and they accrue no maturity. This encourages the managers to be transparent and reasonable in the decisions they make as demotion doesn’t just mean that it stops getting treasury funds, it means it stops having voting power and accruing maturity.

This shouldn’t be too hard to implement as it maps reasonably well to existing constructs on the NNS: 1) a steering neuron is somewhat similar to Known Neuron and so can be its promotion process (though we’d need demotion from the start). 2) normal operations would already be in place: spawn, split, simplified multi sig control 3) manage neuron can’t disburse funds, thus this can’t be abused to steal the stake and the stake can be considered burned lessening inflation. 4) most changes would be localized to the method that distributes rewards.

Disclaimer: I’m the Ex-lead of the NNS team at DFINITY, but I’m no longer affiliated with the Foundation and this proposal is made as an individual.


I think I would rather just not mint the ICP. I think there is this thought that all the ICP that isn’t being minted is up for grabs. I don’t think it’s up for grabs it doesn’t exist.


I would be more comfortable changing the language to mint extra ICP and distributing it to neurons.

I think there’s a reasonable argument for not having an NNS treasury at all, which I see as a viable alternative. This proposal is for what to do if the community decides to have one.

did that get implemented? I remember it was in a proposal but didn’t see any confirmation / graphs that it was done

Well my feedback is to change the language. As I stated, this makes it sound like the ICP has to be used, which is not the case. You are minting extra ICP to create a treasury.


That seems fair, this proposal is about how to manage the treasury, not necessarily how the funds get there. Exactly what would you change?

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IMO the greatest risk of an NNS treasury to be concerned with is misallocation of resources. The “steering committee” decision to manage funds will have a high probability of leading to large amount of mal-investment and waste, fraud and abuse.

It’s fine if people decide to voluntarily contribute their own ICP to donate it to this NNS treasury endeavor, however forcing everyone to contribute IMO is the wrong approach and will be detrimental long term for the success of the Internet Computer.

Since this thread is focused on “how to manage the treasury”, instead of “how funds get there”, I would emphasize the importance of super-majority approval to disburse funds requiring multiple independent stakeholder authorizations beyond just the working group, but by both working group stakeholders and also approval of the broader community at large, a thorough EIP pipeline of rational and feedback, distribution of funds in small quantities linked to deliverables and milestones, etc.

Honestly though I think having a robust framework to manage the treasury to minimize abuse is structurally difficult and will take time. If the NNS will be controlling large quantities of funds it will be rife with fraud and abuse. To reduce this, there should be a robust set of success metrics to quantify the impact of the funds.

IMO there is also a conflict between giving the NNS this type of power to allocate funds from certain sources, and then divert them into working group, this would be better handled through a separate independent decentralized organization not associated with the NNS to set up a fund and solicit donations from community members through an independent decentralized organization outside the NNS, similar to how these types of community goods are funded on ethereum community with “gitcoin grants” etc.


Honestly I worry about the same. Whichever way the treasury gets funded it likely shouldn’t be getting millions of ICP/year, at least not in the beginning. Funding should be gradual, particularly if not coming from voluntary contributions.


It is my opinion the NNS is already too problematic as it is, making it responsible for even more stuff, especially allocation of potentially millions of dollars, might not be a wise choice. Instead we should look into making it as lean as possible for the time being and maybe have this discussion again in a couple years.

What to do with excess tokens? Use them to pay node providers, simple as.
Decentralization causes overhead and inefficiency for humans too so the NNS should be used to handle few and simple things: node management, protocol upgrades and “temperature checks” proposals to gather feedback on future protocol upgrades, essentially the IC version of miners signaling support for an IP.

The IC would greatly benefit from a simpler and more technically oriented NNS instead of a more political one.


I don’t always agree with Zane but I agree with this. Nns shouldn’t be a political tool. Maybe we need to create a separate org on top of ICP for this sort of thing maybe a decentralized organization that we all join. Something autonomous.


At this point, I believe it would be prudent to postpone this treasury fund for a couple of years and see how things develop. Meanwhile, use the community fun to invest in projects that show promise. Perhaps we will see independent organizations fund some of the things we want out of self-interest. Code and state is doing some interesting things with building tools that allow people to easily build and make money on the internet computer. To be honest, attracting a few more of these independent organizations will probably do more good than the Treasury. Let us take one step at a time for the sake of the community. I don’t think we can handle any more contentious issues at the same time.

Rants over.


I appreciate you taking the time to share this with us. Honestly, your approach sounds solid and I don’t doubt that it could be accomplished.

At this point, I am against having any discussion about a treasury until we can come together to figure out what we’re trying to do here. It seems like a lot of people have different ideas for what the treasury should be used for, and I believe that stems from us never clearly identifying the problem.


Thanks your solution❤️, I like the idea.

I also agree that we should think why we should have the treasury at first. What’s the problem we can’t solve by existing methods at current situation?


I echo a lot of the previous comments with regard to the treasury…

I think we are try to solution a problem that hasn’t been sufficiently defined in my eyes…

Also, I don’t think the NNS is mature enough yet for the consideration of controlling a big pot of money…

I agree with this statement, partly, but not sure it wouldn’t be a worthwhile experiment. I would hope it could be implemented without much change to the NNS itself other than a couple of new proposal types for managing the treasury’s neuron(s).

I agree.

Basically, you are black-holing a neuron to always allow specific neurons to have control of it’s funds. They can do anything with those funds and there’s no really any checks and balances to limit misallocation or drive consequences from results.

It’s an interesting mechanism, but on it’s own it solves nothing regarding the larger surrounding concerns.


Are blackholed neurons possible as of today?

[EDIT]: They are

Zane speaking sense

This really isn’t the time for such a huge change and its open to huge risk, creating distrust within investors and potential investors

This is also a great point - what is the issue were facing? Why is Dfinity not voicing their view on it?

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