We need an easy to use wallet and easy to use staking to attract people that don’t want to learn how to use nns. at the moment binnance use fund only for shorting ICP.
Many thanks for your detailed analysis again! This spreadsheet is very useful for bringing the discussion forward. I would like to highlight one subtle but important point, which appeared higher up in this thread in a discussion between @Kyle_Langham and me:
- For the impact on voting power and APY we need also to consider whether the neurons with dissolve delay < 6 months will actually vote or not.
- I made the assumptions that approx only 50% of these neurons will vote, which leads to a minimal impact of 0.25% on overall APY.
- If I include this assumption (i.e. half the voting power of the 0-6 month bucket) in your spreadsheet it seems to suggest that the impact on APY of the 8 year gang between the current set-up and original proposal is less than
I would need more information to understand how you arrived at those numbers. However, the model in it’s current form may not lend itself to performing this analysis. It’s built with the same assumption as the dashboard APY reporting, which is an assumption that all neurons will always vote. I think this is a reasonable assumption for this type of analysis since the design intent of the NNS is that all neurons always vote and voting rewards are allocated proportional to that participation.
There isn’t enough information in the API to easily build a model that accounts for voting participation rates on Governance topics. It requires information like how many governance and routine business (e.g. subnet update) proposals are submitted each day and what percentage of each dissolve delay bucket are voting on Governance proposals. I do plan to work on this more complicated model to see if it is possible using information from other API sources, but I don’t think it is necessary for the purpose of this discussion.
For every neuron that does not vote on Governance proposals, their voting rewards go to neurons that do vote on Governance proposals. Hence, if we were modeling the 8 year gang based on actual APY today, the range would be something like 12-30% APY as opposed to 20-23% APY as shown in the Current model. The same goes at the low end of the dissolve delay range. For every neuron less than 6 months that does not vote on Governance proposals, there will be neurons in that same region who get an increase in voting rewards relative to the average because they do vote on Governance proposals. Of course, it’s not that simple because you really need to model the entire data set to understand how lack of voting on Governance in one bucket affects APY in all the other buckets.
So to make a long story short, I don’t think lack of voting on Governance proposals results in a change in the average APY. My hypothesis is that it just spreads out the range of APY for each bucket.
To bring my overall point across, I see the value in your proposal:
Instead of introducing a kink in the dissolve delay function you suggest to keep the linear shape and slightly rebalance it in order to not negatively impact the long stakers. This has the additional advantage of simplifying the implementation.
@lomesh and @nikhil.ranjan: What is your view?
In terms of estimating the impact on the long-stakers, I am making the point that we can refine the estimate on how much additional (active) voting power we will add, because the majority of rewards is paid out to active voters (and thus the additional inactive voting power which does not vote on governance topics will not matter so much).
As derived in the calculation above, I estimate that we will add 7mn additional voting power assuming 50% actively voting neurons (which is still a conservative estimate as these neurons probably vote less actively than the global average of around 50%). If I enter this estimate in your sheet in the tab NRProp (cell I65) I derive a much lower impact of less than 40bps on the APY of the long stakers. Can you follow this line of argument (and did I interpret your spreadsheet correctly) ?
It is definitely true that when there are fewer votes cast the voting reward goes up for everyone who votes. The daily reward pie gets split between fewer votes. It actually doesn’t matter if you take away those votes from the new <6moDD bucket, the 8YG bucket, the dissolving bucket, or the non dissolving bucket. The result is the same.
According to the IC-API, there are currently 28mn ICP in nuerons that are dissolving that are less than 6 month dissolve delay (cell H15). They would all vote on all Exchange Rate and all vote on other routine business proposals (e.g. Subnet Updates) since they are following Dfinity by default as configured at genesis. The APY for all of those non Governance proposals would be equal to the results displayed in the models because the models assume all neurons always vote, which is true even for this new <6moDD bucket. It is only for Governance proposals that 53% of total voting power in the NNS is not voting. If you were to subtract this 53% of total voting power from any combination of cells I65, I54, and I25, then you would end up with APY that match all neurons that vote for those Governance proposals. If you then apply proposals weights to the APY for all Governance proposals and the APY for all non Governance proposals for any given day (based on the number of proposals of each type that are submitted), then you end up with the daily rewards that are reported to us each day in the form of maturity.
So to make a long story short again, yes you can subtract away votes from any bucket and increase the rewards for everyone else that does vote. However, I don’t think that represents an apples to apples comparison of what would happen to the baseline case (aka worst case scenario) from our current participation rates if we were to add this new <6moDD bucket to the reward distribution.
All that said, it would be just as valid to think about how many new votes will be added that don’t exist today if NRProp (or AltProp) were successful at attracting new governance participants to the NNS. We can pick any definition of success and add 10mn, 20mn, 40mn, 80mn votes to to the model and see how much the APY prediction goes down for all buckets. If any of these scenarios are accurate, then NRProp in the current form will end up putting more and more voting power in the hands of people who own neurons that don’t have the long term best interest of the IC in mind, which runs counter to the objective of the tokenomics incentives. Hence, this change needs to also increase the max dissolve delay to counter this effect.
This just brings me back to the point that, in my opinion, we shouldn’t lower the dissolve delay that pays voting rewards without also increasing the max dissolve delay bonus enough to 1) ensure that the voting power increase for the longer stakers at least matches the increased voting power of the shortest stakers after recognizing some definition of success and 2) give the longer term stakers a tokenomics incentive to vote yes for this proposal. I also happen to think this proposal has a higher probability of success if the new <6moDD bucket has reasonable rewards, which is why I’m hesitant about the steep dissolve delay bonus slope for the new bucket. However, if we do move forward with a steep slope for the new bucket, then I would recommend a max dissolve delay bonus of 3x (which is 1.125x at 6 months instead of 1.0625x) to help offset the new rewards (this is also consistent with the preference that @dfisher expressed above). I would support this proposal under those conditions, but I would still be hesitant about the probability of success of attracting new NNS participants due to the very low APY for a 1 month dissolve delay.
I see panic as the reason for adjusting the minimum dissolve delay because of the whole crypto market being volatile and down at this time, I believe the reason is so some can sell up and move on and it is their reason to support lowering.
As far as participating is concerned the only proposals that I see on the NNS to vote on are the hard working teams like, The DFINITY Foundation, ICP Maximalist, Internet Computer Association, cycledao.xyz and ICDevs.org and others which you can follow to get the rewards.
Other than that I did not see any stakers participating in a proposal for anything other than changing followers to lose rewards for following, so now they have to update their following every 6 months or lose their rewards or support dog boys spamming on the NNS.
I was told that followers should not be rewarded because they don’t vote and the voters put in the time but at the same time they don’t have any proposals and therefore pointless.
I have put forward a proposal to build onto the NNS as a staker to participate and increase our rewards to build on the NNS and its future needs and not 1 reply. The teams have their hands full and the stakers don’t participate.
Stakers want more rewards but don’t do any work to build onto the NNS other than to weaken, in my opinion.
@nikhil.ranjan: Just to clarify, I meant that the proposal AltProp by @wpb would not introduce a kink because the whole function remains linear from start to end. The proposal from the start of this thread has a kink at the 6-month point where the slope changes.
This is correct if we assume that active vs non-active voting is the same across all dissolve delay buckets. However I would expect that long-stakers are much more active voters than short-stakers. Let me pull some data to verify this.
This is a fair point and an according estimate should be included in the analysis.
If the APY for 6 month stakers goes down from 10.9% to 7.2%, as proposed in the linear shape version, I suspect many 6 month stakers will dissolve neurons and shift their stake to Binance, with the result that, far from inducing more people to stake, the proposal will result in an exodus of stakers.
because curbing inflation is good for the price of $ICP in the long run. Voting rewards are way too high compared to necessary. you want high APY. but that means $ICP will continuously decrease in price. supply is increasing daily. Don’t use high APY to entice retailers. we need low inflation mechanism and with the development of IC make $ICP increase in value. Don’t because APY is high it will look like a ponzi scheme that will kill the project when inflation is too high. Supply pressure will result in always selling.
in other blockchain platforms, they only let APY 5-7% reward inflation. and $ICP is having 20% inflation. Just like the more money is printed, the inflation increases and money is gradually losing value over time.
Just to make sure we are on the same page: the NNS APY is currently around 20% but the ICP inflation is NOT 20%. It is currently at 8.5% and dropping to 5%.
This proposal would not affect at all the amount of ICP minted, only the distribution of what is minted.
I hope that makes sense.
Further when 48623 is implemented, FOR A WHILE, ICP inflation due to rewards will go down even further.
From the @wpb 's AltProp argument implies that the proposal is not willing to give more voting power to participants that not ‘maximalist’ enough because not willing to stake for longer period (> 5 years), instead punishing the medium DD participants (< 5 years) by subsidizing their reward to short (<6 month DD) & longer term participants (>5 years)
My argument is if ICP wants to be a general purpose ecosystem that onboarding many kind of participants from different background, it should give more fair voting power also to non-maximalist participants. This is to ensure, that the ICP goals are not just strategically for long term objectives, but also give more considerations & attention to achieve short-medium objectives.
From the NRProp vs AltProp, I see NRProp will be a better route. AltProp is a bit radical, and will stir disturbance for governance participants with DD < 5 years.
If the AltProp prop argument is to encourage shot-medium DD participants to increase their DD to 8 years, I don’t think this will be the case.
How do we feel, if this is really about dipping a toe in, lowering the xdr vote threshold to 7 days…maybe upping it to .1 instead of .01. This gives them the opportunity to try it out but the rate is super low and doesn’t shift much VP away from current stakers.
Hello ICP community. Long time forum lurker.
Though I appreciate the communities’ intentions of garnering additional stakers to join the NNS, I’m afraid such a proposal is merely a band-aid solution for a more fundamentally driven one. Let me explain.
Let us fancy this matter from an outsider view. Pretend you are a newcomer to the ICP space. You are intrigued by the disruptive technology being built on the ICP platform. You are a bit frightened by the price history of the token, but for some reason, an insatiable urge to learn the technology drives you to consume the red pill. You have a general understanding of other blockchains; however, you are convinced $ICP is quite literally the future. You quickly hit the market buy option on your favorite exchange and are now faced with the dilemma – How can I earn rewards and participate in the DAO?
Let’s dive in. First one must create an “internet identity anchor” before having to log-in to the “Network Nervous System.” After said completion, you are left clicking the tabulated links on the top and eventually stumble on the word “cannister.” Eventually, after clicking around and searching various web2 sites (Tisk tisk…), you deduce this is the appropriate option to stake your ICP. Upon staking you need to determine your dissolve delay, and are further bombarded with things like “Increase Neuron Stake”, “Split Neuron”, etc. Do you see the problem?
If we as a community intend to drive user adoption of the NNS for staking, we need to put ourselves into the shoes of our common crypto-peers. Needlessly verbose terminology is such a huge turn off for newcomers. What appears to be the intent of creating a cult-like mantra around the use of novel words and nifty idioms is exactly what turns people off from wanting to participate. Perhaps as important - participants must think to drive their decision-making process. Think of every other user-friendly stake platform. You login, find the stake button, and then bam – rewards expressed as a percentage depending on your stake term.
We need an NNS that is so user intuitive, it’s a simple as logging into your favorite social media platform. Simply login, “Stake”, and set your term. When you are ready, you can “Unstake” or “rake your steak rewards.” (Folly, but an option. 8 Year gang baby!)
If you think this is ICP fud and crypto babble, I truly apologize. I’m totally engrossed with the technology Dfinity has built with ICP, and truly believe this has a chance to transform the internet as we know. However, we as a community must stop trying to create robust mathematical proofs to drive user adoption. Perhaps a greater emphasis on ease-of-use would solve that very problem instead.
I remember it well and when you finally setup and in you become a bystander.