[Proposal] Should Named Neurons be Compensated for their Contribution?

Governance
1

Background

Please note that the background of this proposal only exists to preface the scenario & necessity, and is not intended to resume past events.

In May 2023, I attempted to push a proposal to enact the Periodic Followee Confirmation Reset which was approved by the NNS in April 2022. This proposal would have temporarily abolished the self assigned centralization of the network - until market participants made the conscious decision to re-select followees.

However, this proposal faced very vocal pushback from prominent governance figures & the DFINITY organization - citing that it’s unreliable to rely on alternative contributors, given a lack of incentivization for Named Neurons to contribute to the network.

https://forum.dfinity.org/t/periodic-followee-confirmation-follow-up/20290

Initially I disagreed with this - it was my opinion that the incentivization to contribute to the protocol was the success of the protocol itself.

However, upon reflection of the practices of other blockchains & protocols, I’d agree that there should be some sort of incentivization to contribute to the protocol, which lead me to brainstorming this concept.

For example, Mining Pools, which allow users to “pool” hashing power & in turn share the rewards, typically take a 1-2% fee for providing the service.

Additionally, Staking Pools, which allow users to pool assets to meet the minimum validator threshold & in turn share the rewards, tend to also take a 1-2% fee of the rewards for providing the service.

As such, given Named Neurons also act as the “actuator” enabling the stake to consistently receive its voting reward, I believe it is reasonable to draw correlation to these models.

Proposal

Reward Named Neurons 1% of the Maturity Rewards of the Voting Power they represent within respective topics.

Data

Monthly Un-Disbursed Maturity | 1,582,659

Monthly Disbursed ICP | 1,091,778

Utilizing a 1:1 Conversion rate for simplicity, this can be used to determine there was roughly 2,674,437 ICP of voting rewards generated within the last month.

Under the proposed change, this would result in a reduction of 26,744.37 ICP from the total sum of rewards, to be rewarded to Named Neurons respectively - leaving 2,647,692.63 ICP of voting rewards to be distributed to the Neurons themselves.

Pro’s

  • Incentives individual participation in the governance system (due to risk of minor “lost” rewards)
  • Incentives Named Neurons to reliably vote on behalf of their followees (to maintain voting power)
  • Rewards Named Neurons for their contributions to the governance of the network

Con’s

  • Slight reduction in distributed APY to neurons
  • Creating dependency on rewards may not align with the original ethos of the network, which relied on participants contributing for the benefit of the protocol itself, rather than monetary gain
2 Likes
2

Interesting proposal. But in this case why not let the NN set the % they want to obtain for their “service”? this would allow them to better differentiate.

1 Like
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I think this is a great addition to the concept that would add a degree of customization & would be useful for differentiating the value proposition of each named neuron.

I’ve also been thinking, and I believe this function would be very useful to organization like DFINITY or @wpb ’s Codegov.

DFINITY, for example, plans to eventually be funded by their neurons - given they’re the leading Named Neuron in Voting Power, this function would certainly contribute to the funding of their operations.

Alternatively, CodeGov is entirely funded via DFINITY grants - introducing a reward for followees would alleviate this dependency, rewarding the contributors respective to the voting power they represent.

1 Like
4

The value one places on a named neuron is going to be personal. It’s some combination of I don’t have time, I don’t understand, or I want some 3rd party insights.

If I vote manually 99% of the time, then the named neuron is not enabling much of my rewards. Certainly not 1% of my maturity. Moreover, if a NN is only being followed for one topic or a topic with fewer proposals (like the SNS), then that neuron is enabling even less.

A fee might help improve the quality of named neurons, but then again, it might also just lead to the loudest voice being “always right”. So, then we just end up with loud named neurons and not quality named neurons.

I would be against this proposal.

2 Likes
5

Thank you for taking the time to collect your thoughts & respond!

I think the primary misconception is that Named Neurons would take a universal 1% of rewards no matter the circumstances. This is not what I had envisioned, and the communication of such is probably a fault on my part.

The Named Neuron should only receive compensation in proposals they vote on behalf of the followee for.

For example, assuming you decided to override your Named Neurons vote - the rewards would remain with you, as you consciously voted.

Alternatively, had a Named Neuron vote on an SNS proposal, while another votes on a Governance Proposal on behalf of a followee, each would retain 1% of the rewards of the respective proposals voted upon - as they took on the responsibility for you.

I don’t think it should be a blanket reward in which is automatically deducted - it should only occur in the instance the Named Neuron provides value via a vote.

6

I see. Thanks for clarifying. That’s more in line with what I thought would be reasonable, though I think there would need to be some flexibility in a) if there’s a fee and b) how much is the fee and c) is the fee a flat ICP amount or a % of rewards.

In this same vane of thought, it might be helpful to see the named neuron’s intended vote on the proposal, which would only go into effect at the end of the voting period, thus giving followers time to vote manually or not.

Generally speaking, it’s gonna take a lot to separate me from my maturity :wink:

1 Like
7

As owner of a named neuron I don’t mind the idea but I doubt many followers would like it. Still, a very small amount doesn’t seem unreasonable.

I would vote no out of principle, but I won’t be swaying this vote one way or another.

Should probably be based on the voting power of your followers.

1 Like
8

There is A LOT I don’t like about the concept of paying named neurons(and theoretically ICDevs would have something to gain here). This is all a thought exercise and not any actual suggestion:

The way the thing SHOULD work is that you have a financial incentive to vote to improve/sustain the network. Those that vote proactively and have the most on the line are likely the ones people want to follow. I think that because the topics were de novo and we haven’t reached a point where voting in some way other than how DFINITY votes make a material financial impact on anyone, there is no organic/evolutionary drive for anyone to emerge and do it BECAUSE THEY HAVE MONEY ON THE LINE.

I think you have to have this discussion 15 times for each topic in the NNS, but I’ll attempt to make a general case from one topic.

Who is affected if a bad code is admitted via the NNS? Who even knows how to make a rouge request? Theoretically, if the system went down, would nodes still get paid? Would there be a penalty? I actually don’t know. On ETH, if you run the wrong client and validate a bad block you miss out on a significant reward. If we want code to be validated it needs to be done so by the people who will benefit if it is done well. Right now there is no adversary to give anyone any incentive to pay attention. I’m not saying that we want to generate one just for fun, but I am saying that evolutionary maturity will not emerge until there is one.

I think I’d argue that you could pay through the nose for code reviews/code validators, but no self-sustaining mechanism will emerge until there is a real and present threat to someone with significant resources on the line that a bug getting into the replica would affect the bottom line.

If we pay with ICP, then we are just rearranging the deck chairs. What we need is for that value to come from outside the system and for the lever for that value to be inside the system.

Put another way, if an organization besides DFINITY had more than 10m/week of e-commerce sales on the line if the replica went down, that organization would likely be validating the replica and people could place significant trust that they were going to do a good job.

Since nodes have basically a guaranteed operating contract, there is very little reason for them to validate the replica. They are being offered all carrots and no stick. If they had to have collateral on the line and could slashed if a bad replica was endorsed then I’d imagine we’d see more proactive vetting of the replica.(Whether they make enough profit to support that work is another issue to be addressed). Collateralized self-selection of a replica version would gin up that expertise pretty quickly. You’d still want the NNS to vote on the replica version, but with the right incentive, you wouldn’t need the NNS to autodeploy the code because the node providers would make damn sure they paid attention and deployed the replica at the right time. (I’m sure I’m simplifying this and auto deployment is a hell of a feature…I’m not suggesting we should throw the baby out with the bath water…just trying to demonstrate how we may have to think about these things).

10 Likes
9

First, they make you follow someone other than Dfinity, even if you only trust Dfinity.
Second, they make you pay for that.
It makes sense finally.

10

Nobody has made anybody follow any Named Neurons.

The function is completely optional & adjustable to the liking of the followee.

If you only trust DFINITY, you should only be following DFINITY - given you’ve decided to allocate your VP to someone else.

This discussion stems from the fact that DFINITY & other Named Neurons have stated the network can’t undergo an followee reset (which would force Neurons to re-select their followee on a semi-annual basis - furthering decentralization of liquid democracy) until there are alternative incentivized contributors to the network - yet the bar is seemingly once again shifting.

11

If we want more contributors to the network at the protocol level, then they will likely need to get paid for their work. While I have historically believed project teams and large investors with “skin in the game” would have a vested interest in fulfilling this role, so far it hasn’t happened as far as I can tell. I think there needs to be more incentive to get more involved. I’m not sure the best mechanism.

Using the proposed parameters doesn’t add up to all that much incentive. At $4/ICP, that’s $106,976 per month. Interestingly, DFINITY would probably get 95+% of that incentive since they trigger the majority of the voting power that gets cast in aggregate of all proposal types.

I’m not opposed to the idea at all. I really do want to see changes made that truly incentivize people and organizations to get more involved at the protocol level. In my mind, that will be required to advance decentralization of ICP.

2 Likes
12

Before they change the rules, you can just follow Dfinity.
After that, you have to follow someone else, which is definitely not optional.
You totally miss the point, and I guess you do it deliberately.

13

it should be coded so that Dfinity doesn’t get any of that money

3 Likes
14

This is not true. You can still follow DFINITY on any topic. You are not forced to follow anyone at all. The entire system is completely optional.

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You mean that now I can follow DFINITY on any topic without any loss of voting rewards? If so, I apologize for my interrupting. I really don’t know that.
Or you simply mean that I can follow DFINITY as long as I don’t mind the loss? If so, you must be kidding me, right?

16

You will at present lose no voting rewards by following anybody. This topic is to discuss if names neurons should get compensated for their services. I say no, but my little named neuron won’t be the deciding factor here. Theoretically, named neurons could band together, propose they take a larger share of voting rewards, and vote yes and it would pass. The only thing stopping this is the goodwill of the named neurons.

1 Like
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DFINITY also (plans to) sustains their operations with the rewards from neurons voting.

Governance topics hold the largest weighting of 20.

Which means they also vote on governance topics whenever possible, as that’s the grand majority of maturity rewarded on a daily basis according to the weighting.

I just went through the last 100 Governance Proposals, and they’ve voted on 90 of them - which is a 90% voting rate.

18

This is true & emphasizes the importance of exploring this openly, publicly, and thoroughly discussing the topic & its impact with & throughout the community.

This is by no means something that should simply be pushed through the NNS without discussion. That has multiple layers of implication & impact to the NNS:

On one hand, those of which who are entrusted with governing the protocol via liquid democracy are rewarded for their effort, on the other, an unprecedented “fee” is associated with the followee system.

19

I am in favor of the idea to give an incentive to neurons that are being followed by moving a very small fraction of the maturity that would be awarded to their followees to the followed neuron instead. Voting properly on proposals is a significant effort, and I think this should be rewarded. We see that currently almost nobody (with the exception of codegov) votes on the real proposals (outside of governance/sns), which is less than ideal. If eg 1% of the voting rewards would be given to the active voting neurons, then I think that would be a significant incentive to play this role, helping further decentralize the IC.

I do think the devil is in the details here. Eg:

  • what happens if I follow multiple neurons? Should they share the rewards? What if I vote 3, but actually only 2 of those always vote, and 1 doesn’t do anything? Otoh, we don’t want to incentivize voting very quickly to be the first.
  • what about cycles in the following graph?
  • what if A follows B who follows C? Would the cut from A’s rewards transitively go to C?
4 Likes
20

I think regarding neurons you follow, it would depend on who casts the vote and causes your neuron to vote. So the first one to vote would receive the reward.