[Proposal] Reducing minimum staking time for expanding governance participation

Thanks for your feedback. I would clarify that fighting exchange manipulation is not the intent here. If that was the case the proposal would have suggested APY numbers comparable to those offered by exchange.

The intent is to lower the barrier to entry so that community members on the sidelines can see NNS in action. This cohort isn’t necessarily trying to optimize for highest APY but still need some flexibility on their lockup duration.

Thanks for your feedback @skilesare. The voting power for shorter staking duration is significantly lower than ones with higher dissolve delay. For instance, staking for 7 days is 1/26th of the voting power for 6 months. The voting power decays much faster for dissolve delay less than 6 months in an attempt to prevent such attacks.

I believe that you believe that this proposal is about getting more people to participate in governance. I believe that getting more people to participate in governance is a good thing. I reached the conclusion that I did without explaining why. My apologies. What follows is my deep down thoughts.

However this proposal will not increase governance. What exactly is governance? To me it is about actively participating in the act of managing the Internet Computer. Following a neuron to get some rewards is NOT the essence of governance, IMO.

So what does that involve?

  • Participating in communities, forums, reddits.
  • Following folks on twitter.
  • Internalizing one’s knowledge about Internet computer.
  • Spend some icp on worthwhile things on the internet computer (i.e. get a dmail vanity address, provide liquidity to dex)
  • Build something on the internet computer.

This requires a substantial long-term commitment and focus. This proposal advocates a very short term participation (1 week, 1 month etc). I have difficulty in seeing how this will significantly aid participating in governance.

I realize that we might be coming at it from different angles. The second angle to look at is governance purely from a staking and voting perspective. Most people (including yours truly) follow other neurons. Do we really think that we can get people up to speed on voting/rewards in 7 days? I think not. Most people will just follow other neurons. Given that and especially from a short term perspective, people would not be interested in real governance. Then the second angle boils down into getting the rewards and there others have the eloquent case for why short-term investment is not appropriate for ICP at this time.

Hope this helps in explaining my thoughts. It is good to use direct quotes because it leads to frank and honest discussions.

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@nikhil.ranjan @diegop My personal opinion is that all $ICP holders have the right to vote. But also take into account whether a whale wants to manipulate votes for a certain proposal. they can borrow a big loan and just deposit within 7 days to vote, then dissolve their neron??? so in my opinion the voteable neurons will lock for at least 30 days instead of 6 months like now. because only those who really support and really care about IC stake and vote. but if it’s just for short term rewards they won’t send their ICP to NNS to vote. because on Cex exchanges, it is possible to deposit ICP with an interest rate of 10% APY for 30 days.

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This is perfect! Now you are explaining the rationale as you see it.

However, inherent in that aim is the ability of reducing the liquid supply which may have some short term positive impact of ICP price. So if that is the one of the goals, then it should be explicit.

As a 8 year neuron holder, I am most interested in is increasing utilization of ICP; over the long term.

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This makes perfect sense. Thank you for taking the time to explain so richly!

I am also very interested in the issue of inflation of ICP, whether DFINITY or the community will come up with some proposals for this, the number of ICP generated is many times higher than the number burned, causing ICP to lose value over time. Measures should be taken for this as soon as possible! need prosposals for increases the demand for holding and using ICP in the IC ecosystem and burning more ICPs to balance the generation and burning.

The voting rewards system is designed to incentivize staking of 90% of the total supply (currently 55.6% is staked). I believe that the closer we get to that 90% goal, possibly helped by proposals such as this one, the more the liquid supply of ICP is reduced, leading to a positive long-term impact on the price of ICP. That’s just my opinion, not a goal of the proposal as far as I know.

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Thank you for the clarification. You make very fair set of points and I completely agree with you that true governance participation is not just following someone else for collecting rewards but would require all of the key points that you mention above like participating in forums, following people on Twitter, experiment with dapps on IC, etc.

Just my opinion here: I am thinking of this as a funnel. In my mind it’s okay if we can get another 100K people that just start to follow other neurons as the Step 1. My personal thesis is that once we can get more people to see NNS in action a reasonable subset of them will start going down the rabbit hole and start becoming more active participants (where they will do exactly what you describe). It has to start somewhere and the intent here is to make it easier for people to enter the funnel. If we can help them cross the first threshold they will be more vested in the future.

Again I am just sharing our thesis but certainly open to feedback from the community. If we all feel this shouldn’t be the path forward then we will drop this and move on to better things :slight_smile:

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Ok….after reading I think I’d like to make a couple points.

When we pay governance participants to vote in our NNS, we are not just paying them to participate. We are paying them to participate with capital at risk. The system breaks down if that risk is eliminated. There are things we are going to vote for that are going to take months to implement and if the voters are not still engaged then they have not provided “proof of stake”.(I’m looking at you Internet Computer Network Status)

In theory, in an ideal world no one who voted yes on that should be allowed to remove stake from a neuron until we’ll after the market has had the opportunity to integrate the evidence based results of that proposal into it’s valuation. My bet is that we won’t even see it roll out until after 6 months has passed since it’s execution, meaning that our system has some significant flaws already. Lowering this seems mind boggling short sighted. Even if it is “small amount of voting power”, economic conditions could make that a “large amount of voting power” A year ago $130 ICP was not an absurd proposal and $6 ICP was highly unlikely to folks making this calculation. I’m hoping 0.23 cent ICP isn’t in the horizon, but 26x changes is price is not absurd volatility for us to consider in this space.

If anything, I’d argue that we need to increase the minimum to at least 1 year with 48623 as the poster child as to why. We are also supposed to have the ability to change our votes, but don’t yet. We don’t know what votes are coming where a 1% margin could make or break and if a rival platform can nudge things one way consistently enough then you end up in a bad place. And yes people do this and are this crafty. Looks at the current judicial branch of the IS government that has been methodically targeted by an out of power and fading political agenda in such a way that highly unpopular agendas are being legislated from the bench by Unelected judges.

Now, solutions. Lower it to 7 days for xdr votes. The time horizon on those is just a few hours and short term dissolves would be “at risk” for well past when their vote was relevant and when the network would be able to self correct. If someone votes to muck up the xdr ratio the cycle system will go crazy and effect token price pretty quickly. Now those are weighted, but I’m also in favor of removing weights. In the mean time people Would get to mess around with voting and get some kind of reward.(there may be other categories that have short timelines like node rewards)

As an aside, Origyn currently uses 1 year as a minimum(but this is under debate). The consideration is that industry is even slower at adopting change and thus we needed more time to implement votes and have their effects integrated into the market.

One solution to fix this problem of at-stake would be an ice-age like forcing mechanism that would require an “implement by” date that would further lock any accept votes until t+6 months. If the proposal is not implements by t, the proposal becomes void and tokens are unlocked. This is probably too complicated to actually implement, but it would put much more conviction behind votes.

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This kind of attack will only makes the whales bankrupt. If they borrow a big loan just to vote and dissolve, community just make another counter voting proposal to cancel. And then let us see, how long the whale could survive from the interest if they want to keep on attacking. Meanwhile, it also cause icp circulating supply squeeze makes future attack more expensive.

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Agree. The 6 months is a safety mechanism to avoid whale activity on ICP governance. As you state, there are other options for staking and higher yield. There are more to come such as farming in InfinitySwap. Ppl need to understand that the yield ir rewards are grwat but the NNS staking is about governance first and rewards last.

They need to understand the vulnerabilities to the network with the reduction in staking time. It is not in the best interest of the network.

My vote on this will be no.

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At the time I left, there were at least two other principal software engineers: Johan Granström and Ulan Degenbaev. They are both super solid, so have no fear there is still great leadership on the engineering side at DFINITY.

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@Kyle_Langham and discussed this in the latest episode of Neurotic Podcast (our weekly ICP podcast we host together) reading several of the above comments and I quizzed Kyle for insights about the impact of this change - this link will take you directly to that part of our conversation if you’re interested to hear more of Kyle’s analysis and my commentary on this proposal (I’m strongly for it, even more after learning more). 14: Rate My Wallet — Neurotic Podcast — Overcast
As with all podcast, subscribe in your player of choice for the full podcast experience with show notes, chapter art and more.

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Hi, this thread got huge and I’m currently not able to go through all of it - so apology if such idea is already anywhere above.

  1. main goal is
  1. main problem are changes in current staking rewards

So why not to make this simple and separate from current tokenomics:

  • create a fixed and repeatable 7 days staking option for neurons
    • reward would be NOT in a form of ICP maturity but rather as a NFT maturity
      • params to be discussed
      • NFT could be created by dfinity or rather by community NFT creators who could cooperate with dfinity on this (no offense dfinity, I’m just not sure how much artistic do the scientists and engineers feel…)?

I believe that this would introduce enough interesting option for people who would like to try, and still causing NO changes to current tokenomics and rewards (depends on the params discussion).

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What is the low security in nns internet identity?

I think by that is meant that if one of your II devices is compromised, attacker can delete all others and change your seed phrase - unless you delete the compromised one first.
It’s being discussed for a long time and hopefully will get fixed soon.
But frankly, it’s surprising how long it takes, if this happened in banking/financial sector nobody would be allowed to go home until it’s fixed, nobody…

All it takes is using a compromised long enough an attacker can generate an anchor to your Internet Identity, if that happens it is game over no matter how safe you stored your seed phrase or if you’re using an hardware wallet.

I agree, Internet Idenity has been poorly designed, it’s not intuitive to use, it requires specific HW/SW and is somehow less safe than metamask with a ledger attached.

I can’t agree with that, I’m fine with II (in sf there is always something to fix or do better, anywhere, anytime) I’m just not so happy with approach to this security threat. This will need to improve, that’s something what all investors do check and require extra care.