Abstract
I want to argue against some of the claims made in the abstract of the article.
The current NNS tokenomics parameters have failed to i) attract sufficient new participants to offset the dissolving stakes of current participants, ii) encourage current participants to remain committed long term to the IC, iii) address conflict-of-interest risks that may prevent the IC from executing its mission long term.
Point i
The current NNS tokenomics parameters have failed to: attract sufficient new participants to offset the dissolving stakes of current participants
The ginormity of the genesis group
It is true that the NNS is having less ICP locked up than is dissolving. But I don’t believe that is because of the tokenomics alone. We need to understand that the genesis group of stakers, according to my understanding, has made enormous gains on their original investments into ICP. If you look at the charts in the article, it is very clear that the genesis group overwhelms the post-genesis group in most metrics.
These people are going to want to get out of at least some of their positions (sell ICP). This makes sense. This is natural, and probably wise on their part. They have finished one of their major duties to the network, which was to fund it initially. This was incredibly risky on their part, and now they are reaping the rewards.
Let them get out! Let them sell! We really don’t want an oligarchic group of original investors to control the Internet Computer, and so them selling could be one of the best things they can do for us. If they’re selling, someone else is buying (assuming they aren’t selling to themselves). If the price is low, then many more people can get exposure to ICP and start to materially participate in governance.
The nascency of the Internet Computer
The Internet Computer is a very new network. It’s been live for ~6 months, and has definitely not hit any kind of mainstream or even crypto adoption. This is fine, this is expected. Think about how difficult it is for people to land on an understanding, then trust, then commitment to the IC.
Assuming most users come to the Internet Computer through the traditional blockchain rabbit hole, then we need to realize that understanding Bitcoin is hard enough. Once Bitcoin is understood, then users must understand Ethereum and other general-purpose decentralized computers. After sifting through all of those, users must somehow come to a conviction that the Internet Computer is worth their commitment. How can we expect multitudes to arrive here when the network is so young, has no applications with major adoption, and has very few people talking about it?
It takes time to develop the core protocols, to ensure the security of the network, to make developer tools, and to make great apps. Just let it happen! Don’t try to rush it so much, adoption will come as utility, decentralization, security, and scalability increase and are proven.
This is probably my main issue with the proposal and the article, the assumption that tweaking these parameters will drive more adoption to the IC. I simply believe it won’t affect adoption materially, at least in the short-term.