« For an 8 year dissolve delay and 3 month neuron age, the VRY is approx 29% with the current tokenonics parameters. That same neuron would get 38% VRY if the tokenomics parameters in this proposal were approved.
For a 4 year dissolve delay and the neuron is dissolving (0 age), the VRY is approx 22% with the current tokenomics parameters. That same neuron would get 14% VRY if the tokenomics parameters in this proposal were approved. However, if they stop dissolving and leave the neuron at 4 year dissolve delay, then the VRY would grow to 28% within 6 months »
I’m hesitant to jump on board with this. If I’m understanding @wpb explanation correctly it would seem like short-term stakers (4 years isn’t really ‘short’ IMO) are being undervalued by this proposal.
Edit: Perhaps I’m missing the intent of this proposal. Are we trying to increase participation in NNS governance or are we trying to improve distribution of rewards? I think both are valid problems.
Hmm. I’m not sure we achieve both with this. I think reducing rewards for shorter lockups might have the opposite effect. Either people will stake less, or they won’t stake at all.
We might see an increase in the number of 8 year neurons but I doubt it would be enough to offset the amount of ICP leaving the NNS.
That’s fair. But we have to remember that the 3% rule only goes into effect if the voting period ends without a majority. I find it unlikely that Dfinity or any other major stakeholder would allow something like that to just happen without voting against it.
Yes, unfortunately, I agree. We must spread everywhere the new rewardings if the proposal passes. People will do the math and will join the 8 year gang rather than keeping staking for 4 years with current rate. We just need a board to spread through all the socials.
It has to be worthwhile to stake for short durations otherwise everyone will either be fully invested and stake for 8 years or not stake at all.
If the proposed change is made, far less of the total supply will be staked into neurons because only a minority of people will want to stake for 8 years, but staking for anything shorter will have tiny returns, so people will opt to keep their ICP liquid.
I think getting a return of 20-25% for locking up for 8 years is incentive enough for those of us who believe in the project. While a return of 10% is enough for it to still be worthwhile to stake for a short duration. So I don’t think the rewards should be changed. But I do agree that people whose neurons are locked for 8 years should have more voting power than they currently do, so I stand by my earlier suggestion that voting power should be linear with lock up duration and rewards should stay as they are.
I think that solves all the issues people have mentioned + has the added bonus of safely allowing people to stake for < 6 months because their votes will have very little weight.
There are data size attacks to consider here. It is likely that 1ICP was chosen so that an attacker doesn’t buy 4500 ICP, stake them all individually and spawn as often as possible. There are still data concerns with the IC and upgrade cycles limits, etc.
My first impression is to agree with this. If you want to increase participation in staking you need to shift the whole curve up. I currently think the returns on ICP are more than fair and we’re simply due for a market awakening that you can get a 15% return on an amazing asset by just staking one year. Maybe 20% looks more attractive? You could shift the whole curve up by 5% and see what happens. Lowering what 6-month stakers get may lead to a reduction in the percentage staked. I’m only an amateur economist though so I’m happy to be convinced otherwise.
So we have to consider now disadvantages and benefits of both enhancement : the @wpb, @Kyle_Langham and @ayjayem’s one on one hand, the @hpeebles on the other hand, and work from here to choose one of them or a third one mixing their good points or a brand new one. But let us maintain alive the brainstorming !
I totally agree with @LightningLad91. By punishing shorter lockups, will make ICP less attractive for some participants (either small stakers or big stakers). They won’t bother to stake, or they decide not to participate to the NNS governance at all. Some participants choose different dissolve delay time for risk management and their risk tolerance. Consider, that not all ICP participants are ICP maximalist.
We should be careful for steepening the reward yield curve as proposed by this proposal.
The 15% reward for just staking one year is already good enough in my opinion. If the reward need to be increased proportionally across the DD range, it should be implemented once more use cases from ICP projects start to take off, and demand for ICP increases dramatically.
If we increase the reward yield curve now, it will only increase the supply of ICP that currently struggle to be absorbed by the market (thus will depress the ICP price lower)
Hi @Fulco and @skilesare. Considering what both of you said, maybe we could 1) keep the 1 ICP requirement to spawn a new neuron, to avoid data size attacks, and 2) include an option to transfer any amount of stake rewards directly to the main (or any) wallet address (that could be restricted to 1 transfer/day).
Result: Small amounts of ICP stake-rewards (smaller than 1 ICP) could be transferable to an ICP address (no need to spawn a neuron and dissolve it).
(doubts: What is the reason for requiring the user to spawn a new neuron, and then dissolve it, to collect stake-rewards? Why we can’t directly transfer the rewards? Is there something related to ‘newly minted coins’ that avoid a direct transfer of stake-rewards?)
If the proposal is indeed intended to attract new investors, I am afraid it would achieve exactly the opposite. Not only that, I am certain that many current stakers would leave. 8 years and even 4 years is a very long time in crypto, especially if you are forced into the decision. The proposal seems to benefit only particular group of stakers, everybody else will be at loss.
What I would do is give more freedom to investors and with that show more trust and confidence in the product.
I think the 2nd part of proposal alone (Increase the Maximum Age Bonus and Reduce the Time to Reach It) would actually be enough to achieve the intended goal. It would encourage investors to keep their dissolve times locked and still give them enough freedom and risk management options.
You all have to know that as 8 years stakers, people (I am one of them) don’t stake for 8 years thinking they will wait 8 years to take back their investment, but thinking they will take it back regularly (each day for big investors, monthly for less big, weekly for less big again, etc.) during 3 years and even before if the ICP price increases, they think « I will never dissolve, I will use the amount staked as a motor to generate passive incomes all the rest of my life, and if ICP price increases, maybe before one year, I would have taken back all my initial investment ! ».
So, paradoxically, it is not necessarily ICP Maximalist who stake for 8 years. At the early beginning, in my own case, I thought : « in less than 3 years, I will have disburse the same amount initially invested, plus, I will keep my initial amount as motor ». Now, the truth is, I don’t disburse anything, cause I became ICPM. But here is the real difference between an ICPM and a non ICPM : disburse or not, the difference is not in the 8 years dissolve delay choice.
With such a rate of rewards, we will make more people think like this, and we will protect the NNS & ICP. Facilitate this way of thinking is the @wpb’s idea, I think.