Proposal to covert from system based reward to voter based reward; to implement an accept quorum mechanism; and to return the reject cost to 1 ICP

Thanks for all the work you’re putting in here @skilesare! Before going into the separate parts of the proposal, how are you planning to submit this? I think it would be beneficial to submit things as separate proposals.

Action 1
So the TL;DR is, if you vote on all proposals you get the rewards as if everybody else also votes on all proposals, and you get reduced rewards if you miss votes (but those lost rewards don’t go to the active voters, instead they’re just not minted), right? I guess that could work, @bjoernek wdyt?

Action 2

Since Action 2 eliminates this incentive it is repurposed to implement this solution quickly while other more involved and complex proposals are considered

You meant “action 1” here right?

I think what’s missing from this proposal is that the proposals that didn’t reach 3% quorum yet should be clearly separated from the real proposals that i need to vote on, and that their timer should only start when they become a “full” proposal. I should be able to just check in once every 4 days and vote on all open proposals and not miss anything. And ideally I don’t even see spam proposals, unless i’m actively looking at “pre-proposals”.

Action 3
I think i would prefer to stick to 10 ICP for now, but i understand that different people have different views here.

Action 4
iiuc, this is not really a proposal, but more trying to establish that passive stakers are good for the ecosystem right? I agree with that, but I don’t think that should be submitted to the NNS.

3 Likes

Correct.

You meant “action 1” here right?

Yes…I’ll edit

Before going into the separate parts of the proposal, how are you planning to submit this? I think it would be beneficial to submit things as separate proposals.

The comment on the last submission was that DFINITY didn’t vote because they wanted a more comprehensive proposal. I’m happy to break it up if it makes sense and has momentum!

iiuc, this is not really a proposal, but more trying to establish that passive stakers are good for the ecosystem right? I agree with that, but I don’t think that should be submitted to the NNS.

I think you’re probably right, but I thought it made good context for the discussion.

1 Like

This builds beautifully on @justmythoughts reward mechanism. Awesome good to see the progress of these concepts as they bounce from brain to brain. However i still think we need a human in the loop to truly verify if proposals meet set guidelines.

1 Like

This is a wonderful proposal, but I have a simpler idea:

If a listed followee finds a “Spam” proposal, then she can immediately fold this proposal so that her followers will not automatically see it. If a follower wants to see what she folds, then he can just click some button to see the folded; if he think she always folds proposals maliciously, then he can unfollow her or even submit a proposal to unlist her.

I think this idea can cause minimal distortion of the voting market. It is so simple that someone must have already recommended it elsewhere.

1 Like

This is an interesting concept. The above is meant to be a very light lift based on the current iteration of the code base. Longer term I think we have Better tuned options but they require new concepts, functions, and new code paths.

Thank you for the detailed proposal @skilesare ! I have the following initial comments

Process comment: As outlined in this recent post, we propose to structure the discussion around spam prevention (and voting enhancements in general) by assessing proposals against a set of pre-defined goals. This facilitates the discussion & benchmarking of the various proposals. → I suggest to conduct this assessment also for this proposal.

Clarification question on Action 1:

  • We have currently approx 195mn active voting on governance proposal (out of 410mn total voting power) which corresponds to approx 48% active voters.
  • If understand correctly, in your proposal the active votes will get 48% of daily reward pool regardless on how many governance proposals are submitted.
  • For the non-active governance voters (passive holders) the reward would however depend on how many governance proposals will be submitted and voted on, correct? E.g. on a day with 10 governance proposals they will receive almost no rewards. Thus one could use governance proposals to a) “punish” passive holders and b) to lower the daily supply increase. I am not sure if spamers would have an interest in a) or b) but this is a side effect worth considering.
1 Like

I think that is right. Basically, the votes that don’t get cast don’t get rewards. So 52% of the voters wouldn’t be getting the possible rewards because they don’t vote.

  • For the non-active governance voters (passive holders) the reward would however depend on how many governance proposals will be submitted and voted on, correct? E.g. on a day with 10 governance proposals, they will receive almost no rewards. Thus one could use governance proposals to a) “punish” passive holders and b) to lower the daily supply increase. I am not sure if spammers would have an interest in a) or b) but this is a side effect worth considering.

This is certainly a possibility, but I think it is also the intent of the changes in weighting. It is good for whales to have less inflation, so you are right, it could be abused. It is a bit more passive than voting to give yourself more numbers in your column, so I’d argue it is a step in the right direction, but for sure it doesn’t completely solve the problem. I guess the question to ask is does it offer enough incentive to cause spam. The “complete” answer is to set all weights to 1, but you lose incentives. I don’t think there is a complete answer that involves weights that can’t be manipulated in some way. Thus if you want to have incentives based on category weights I think you have to pick your trade-off. I’ll think a bit more on this.

Maybe the unclaimed rewards go to the community pool so the inflation still occurs, but it occurs for funding of projects?

1 Like

This abuse is possible b/c of the high weightings on individual governance proposal rewards. Setting a fixed % of voter rewards attributable to governance proposals on a daily basis would solve this.

Something like, you receive X% of total potential voter rewards per day based on your governance participation. The mechanism for doing this is outlined in Proposal to fix governance proposal rewards at 75% on a daily basis.

I think this combined with your idea of rewards without redistribution might be the solution.

2 Likes

I’ve been thinking on this solution and I really like the idea of active voters not getting passive voter’s rewards, but instead having those rewards never minted. I also appreciate the fact that this is a change with known code changes and can thus be implemented quicker.

Applying the 9 design considerations presented by @bjoernek (Assessing governance & voting enhancements - #13 by bjoernek), this is how I see this proposal compared to the system as it is:
Decentralized & Active - Improves - Keeps the incentives for active participation (albeit, reduces the incentives) and also reduces the rewards paid to non-active participants (and any growing VP). It does, however, improve decentralization by removing incentives to suppress votes.
Secure - Slight Improvement - Removes the security flaw of spamming the NNS to hide proposals that should receive attention
Efficient and Scalable - Increases - End user experience can be increased by the option to hide proposals that have not met the 3% threshold.
Purposeful - Increases - reduces the incentives to spam for both increased rewards and for advertisement
Simple and Accessible - Decreases - slightly complicates the UI and back end functionality.

I certainly welcome any feedback on this evaluation.

All in all, I would support this measure. I’ve been enjoying the 40% APR rewards recently and this would reduce that to closer to 20%, but it would also provide more price stability by reducing the inflation in half.

2 Likes

I would argue that this proposal actually makes voting on the NNS more accessible. Sometimes additional features being added to a UI simplify the user experience by compartmentalizing information, saving the user themselves from “information overload”.

Think about your email inbox - is it more “accessible” when spam is mixed in with the rest of the emails you actually want to read?

I think you’re onto something though in saying that the UI behind this solution is just as important as the backend changes themselves. Therefore, if we can turn the equivalent of the “spam” tab you click on in email into an “view all proposals” or those below a threshold (via a slider, sort of like the default visibility filter on the proposals you see when you first login in and vote on the NNS), then I think this actually makes the NNS voter experience simpler and more accessible.

Some amount of price stability is pretty important imo. Assuming the ICP price eventually stabilizes and reverses into a bull trend (ICP acts as deflationary against USD), we don’t want developers being incentivized to hold onto ICP until the moment they need to burn it, instead of being able to provision out cycles a month or even a year or so at a time without worrying that they’re losing out too much on the opportunity cost of future cycle burn.

The reverse situation (that we’ve been in since Genesis) incentivizes developers to burn their ICP as soon as possible for as many cycles as possible before the price drops. These are also the wrong incentives and messages to be sending developers.

@skilesare A few questions that just popped into my head. I haven’t done my due diligence on the the total ICP supply basis for the rewards rate, so maybe you can help clarify this for me here.

  1. Does this mean that individual voter rewards will be calculated on the total supply basis being every single ICP ever minted could be staked, or referring to the total supply being the supply of all ICP that has not been burned which could be staked?
  2. If (1) is based on the total existing supply (every or minus burns), this still is a massive hit to the staked rewards, quite possibly a halving as mentioned by @Kyle_Langham. How will you sell this to whales in the 8 year gang?
  3. Instead of the total supply, why not just calculate the voter rewards based on the total supply of staked ICP instead of the total supply of ICP in general? This way, the deflation rate is only based on voters that have staked but are missing rewards instead of based on all tokens in circulation (staked or not).

For action 1, I think there are 2 issues that need further consideration:
A) It will lower rewards that are currently accessible to NNS participants that vote on Governance topics. How to convince people it is the right answer?
B) In the current form, I think this will create a new spam incentive that doesn’t exist today. That spam incentive is to submit a governance proposal for the purpose of decreasing inflation. Some people seems to be very concerned about inflation and may submit proposals to prevent inactive voters from getting their fraction of the pie that would normally be available to them on days when there is not naturally a governance proposal. The solution to this is periodic confirmation of followees and reset of followees if not confirmed.

I’m leaning toward agreeing that action 1 is a good idea that improves the NNS and is in the long term best interest of the IC, but I think it still requires proposal 55651 to be effective and I don’t think action 2 or 4 are the best solutions. At this time, I would vote yes if action 1 is submitted independently, but I would vote no if actions 2 and 4 are also included.

A bit short on time, but I’ll make the following quick comments:

  1. Does this mean that individual voter rewards will be calculated on the total supply basis being every single ICP ever minted could be staked, or referring to the total supply being the supply of all ICP that has not been burned which could be staked?

I’m pretty sure this is an established ratio in the code. It is a factor of the total supply to the staked ICP. You can see the fraction calculation on ic/governance.rs at 73983e05ebbab239ce39492a05fb39a83ce5dce5 · dfinity/ic · GitHub. I’m not proposing any change to the fraction calculation, only that the fraction that is determined is equal to the “reward rate” in the future calculation. Currently that rate is used to determine the fraction of total supply that should be used as the day reward and I’m proposing that the same fraction be used to calculate an individual neuron’s reward.

How will you sell this to whales in the 8 year gang?

They have as much to gain from a reduction in inflation as anyone. People are prone to focus on “line goes up” and “total icp in my account” is easy to grok. The proposes trading 1 ICP in my account at $8/ICP and declining price vs 0.5 ICP in my account at $8 with increasing price. Of course, it is all relative and there are external forces that make this not a straight line calc. If we can’t get the whales to think about second-order effects then we don’t have much hope of effecting change.

  1. Instead of the total supply, why not just calculate the voter rewards based on the total supply of staked ICP instead of the total supply of ICP in general? This way, the deflation rate is only based on voters that have staked but are missing rewards instead of based on all tokens in circulation (staked or not).

I’m not sure I’m following you here. The current skew of almost 40% returns for active voters/delegators is an accident of implementation. If you review all the docs from genesis we’re supposed to be at about 20% and decreasing toward 10%(for 8 year gang). Once re assign neurons happens we will all start approaching that rate anyway. This proposal offers a reduction in inflation on the way to full reassignment(which I do not think we will reach).

@wpb

A) It will lower rewards that are currently accessible to NNS participants that vote on Governance topics. How to convince people it is the right answer?

If we are doing 55651 then we are headed there anyway. This gets us there with less inflation. Seems like an easy argument if people will consider second order effects.

B) In the current form, I think this will create a new spam incentive that doesn’t exist today. That spam incentive is to submit a governance proposal for the purpose of decreasing inflation. Some people seems to be very concerned about inflation and may submit proposals to prevent inactive voters from getting their fraction of the pie that would normally be available to them on days when there is not naturally a governance proposal.

I agree this is an issue. The question is will there be less incentive? Reduced inflation doesn’t increase the number of ICP in your account in such a direct way, so perhaps it is less of an incentive? People are jerks, so I don’t doubt their capacity spam for spite, but I think it will be better than what we have right now.

I’m leaning toward agreeing that action 1 is a good idea that improves the NNS and is in the long term best interest of the IC, but I think it still requires proposal 55651 to be effective and I don’t think action 2 or 4 are the best solutions. At this time, I would vote yes if action 1 is submitted independently, but I would vote no if actions 2 and 4 are also included.

I agree about 55651 being complementary, but you’re more bullish on how much effect it will actually have. I think it will take a long time for those neurons to catch up.

We can certainly get rid of 4 as they are just there for context.

2 is a more quickly implementable version of @justmythoughts and @lastmjs 's proposal for incubation periods. I would think if you are in favor of those that you’d be in favor of this as it is a one-week project vs a one-quarter project(and in DFINITY time those time periods can be…maybe extended?..sometimes?)

its still 20percent in overall minted supply lol it seem like some people here try to protect whales that didnt vote n lose half of the reward to those who vote n being active (small retail 8years gang)

1 Like

cuz atleast dfinity can pointed to us (hundreds or thousand of active retail) as an excuse for the icp to be forever call as a governance token when the sec come n knock on our door for the securities case,

we gonna see more outflow btw if yield getting lower (by force) cuz interest rate doesnt work that way, u need to hike the rate to incentivize the circulating supply back into the system inflow into the treasury (NNS) and its just the same with our current situation of the icp since most of reward in governance mostly back into compounding interest

icdevs is wrong if icdevs continue to believe, tackling the wrong issue n really think the drop in icp price is due to the 20percent minted supply/

After proposal Internet Computer Network Status (48623) is implemented, significant discrepancies will arise in calculating staked maturity/maturity/staked ICP.

@skilesare i request, if possible, to rephrase the proposal to account for staked maturity/maturity/staked ICP; otherwise folks who want to cash out on maturity will tend to zero on simply staked ICP.

I certainly don’t think the price is 100% because of inflation. I do believe that inflation were lower the price would be relatively higher. That could be .002% or 1000%. I only play an economist on tv. I’m just trying to nudge things in a positive direction.

1 Like

If I understood this better I would. :grimacing: I think the staked maturity/staked ICP are fungible in context of the reward percentage function? I’d need dfinity to explain how they are implementing it.