Yes there’s already one price oracle, and I think it makes sense to have it. Its function is limited to converting the main IC asset to a medium of exchange and unit of account for computation that much more closely resembles traditional cloud computing. This makes reasoning about paying for computation easier, and I’m okay with it.
But now we’re talking about tightly coupling the minting of ICP itself to the current state of the markets. We should be very careful when considering such a tight coupling.
Yes, we can be careful but I think saying that it’s “tightly coupled” is a bit unfair. +/- 5% is more of a gentle nudge, and that can be easily altered via a proposal.
If anything it acts as a bit of a volatility dampener, less selling when the price is low and more selling when it’s high.
Compared to what project? About 30% of ETH was owned by three people in the genesis block. Pretty much all projects are heavily weighted towards the founders (if they aren’t outright scams.) DFinity has been around for years and the contributors in Pebble, String Labs were all compensated in ICP as far as I know. I think they’ve done pretty well.
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How much do those three own now? Nowhere close to 30%. How much would they have owned if they had the opportunity to lock it for 8 years at a huge interest rate? I have noticed that a number of apples and oranges comparisons made in order to assert that ICP is not any more centralised than other blockchains. Of course founders and contributors deserve to be rewarded. I wouldn’t mind them having millions of ICP, as long as they felt incentivised to sell and therefore decentralise holdings rather than hoard, get more interest than the average investor who cannot stake for 8 years, and thus maintain or increase centralisation over time.
ICP is a great project, absolutely revolutionary, and I have a stake in its success. I just don’t believe success will come by drinking the Kool Aid like, say, the people over at Cardano who treat one individual as an oracle.
It was a different time, this was the first promising non-Bitcoin blockchain that offered something new. I personally would have loved that option having sold the majority of my ETH at $10.
You say that an average investor cannot stake for 8 years, why not? ISAs/IRAs are open to everybody and have a much longer timeframe. If they’re not staking they’re speculators not investors.
It seems you’re focused on individuals who have long supported DFinity, who have bet everything on the long term success of the project. Their holdings may be increasing in nominal terms but not significantly as a percentage of overall tokens. This is not a case of the rich get richer and we end up with the same old oligarchy.
Allowing neurons to auto-compound, for instance, is great for decentralisation. The people that have the time and the motivation to merge their neurons daily no longer get an advantage for doing so.
People being incentivised to sell to help the overall decentralisation of the project, that’s just not good game theory, it will never happen. What we should be looking at are ways for large stakers to use their ICP to support projects that better humanity as a whole, such as perhaps moving from a 8 year neuron to an 8 year investment in the community fund (not sure how that works!)
To #3, this proposal has nothing to do with incentivizing longer dissolve times.
To #4, I expect this to be submitted within the next week. While I can address most technical questions, it is likely that the more high level “why do this now” questions can only be addressed by the vote itself.
You can’t “optimize” for taxes on a global scale since none of you is a tax accountant, there is as many tax interpretations as there are countries and the tax authorities on any jurisdiction don’t even understand how the current staking will be taxed.
The proposed solution is in no way an improvement for taxes. Your “hope” on how this will “improve” the tax situation has no logical basis. Absolutely none.
What’s more the proposal modifies the tokenomics in a significant way changing the rules on people who have staked for as much as 8!!! years. You can’t have your users make such a commitment and then go and change the rules under their feet in such a manner. You already screwed us over once by locking all our seed neurons right before the launch of the project. Proposing yet another change which will affect every single dfinity user is a spit in the face.
Finally what the proposal implies is that selling/disbursing during a bear market should be punished. This is bonkers insane. It’s ridiculous. Absolutely batshit crazy.
A more generic comment. I feel like the team thinks the token is trading at lower lows all the time and are trying to find ways to “fix it”. This is not how you do it. Such a proposal is how you make your users lose all hope and eventually send the price to zero.
The NNS team is ready to work on this feature! To get the design approved by the community, we followed the following schedule:
This should be rejected not on the basis of merit but because the community have not discussed this enough to come to a conclusion this is how we should proceed. I don’t necessarily disagree with the proposal but the way it’s done is not right. I will be voting against this and hopefully this will force the conversation and a better way to move forward.
I totally agree with @lastmjs and @LefterisJP but the situation is even worst than what they describe.
Before I go deep in the subject, I want to share how much frustration I have with this proposals.
Dfinity is not a tax advisor, neither should spend any time and effort in taxes planning. This is insane.
I have done business in US and Canada been in court with Canadian Tax agency for 8 years. Canada and USA have almost 100% tax law copy - paste with some small variation here and there. One thing I can tell you right now that apply to both countries: Colluding to create a mechanism with the goal to avoid taxes is a criminal offense by itself. Dominic, please go see a criminal lawyer specialize in taxation first. You will find out what you are doing is so wrong. Dominic, please stay in what you know and understand.
I will take a copy of this forum and send it to IRS. Let see what they think about this forum.
If people vote for this, they will shoot themselves in their 2 feet. In few years from now, if ever rewards are a taxable event, they will come back at every American citizen who bought ICP (they will have their name very easy from the exchanges) and they will have an interview with them. If the citizen have use that mechanism to avoid taxes, here come huge trouble. Pay everything back now, plus compounded penalties and interest and possible criminal accusation if his name appear in threads like this one.
If you have a discomfort that I send this thread to IRS, to Cointelegrah, to Coindesk, Coinbureau, etc, then you know what you guys are doing here is totally wrong.
There is so much to say about this to be so wrong but I will stop here as my 2 colleagues @lastmjs and @LefterisJP have expressed quiet clearly.
Merge Neurons function would be very nice to have. Nothing else.
Sorry for the tone. I am neither a taxable individual in both Canada or USA countries. But as a heavy investor post genesis, all locked for 8 years, with no plan of dissolving, I am working hard for Dfinity to get some kind of reputation so the FUD would vanish slowly. Wow man, I can tell you this proposal is a huge FUD builder and look so bad for everyone.
Insane, Insane, Insane
Guess what I will vote for?
Let’s do a proposal asking to send the TAX Avoidance proposal to IRS and all the media first to see their reactions on the topic. a 1 month waiting period should be enough. That could help neurons voters to make up their mind?
I will certainly spend 1 ICP to make it if we need to.
I can see a bit of backlash in this feedback proposal.
Would it not be better to have the Dfinity foundation or a strong group within the community to get a few people (maybe economists/mathematicians) together to discuss the tokenomics and the best approach to it which will incentivise seed investors and holders alike, as well as with an approach to tax which is what some people are concerned about I see.
After they have discuss this they could maybe put one or two options in a video for the community with the pros and cons of each option. We can then go for option 1/2/(maybe 3). I know there are some intelligent people within this group but I think it would be best to get it as close to right sooner rather than later as it has been an ongoing discussion for sometime.
It is a situation which requires a good deal of analysis from people that can operate within blockchain and tadefi so might be best left to the experts to put into lamens terms and explain to the community in a video which option is best before the vote.
If the economics are not well structured why would the average person want to be part of that ecosystem or provide liquidity after all? I’m sure it helps to have plenty of liquidity flowing through the ecosystem and would be beneficial for everyone if the tokenomics were sorted out in the best way possible where people were confident with everything presented.
Hire some people, maybe even within Ripple. Anyone that has experience in blockchain and tradefi so they can put the problems to rest asap and still incentivise all those involved. Dfinity are the best at research and development but it might be worth leaving these issues to people that specialize in them and know what has and has not worked before.
I would say getting the community’s confidence back is the number 1 priority and that it would pay off massively to spend some money getting professional assistance with this matter. Let’s let engineers and devs do what they do best and build the best blockchain @jwiegley
Community votes can come afterwards. There may not be a one size fits all exactly but if we can get this as close to perfect as we can it may give some assurances to many people in the community as well as newcomers.
Dfinity is based in Switzerland. Investors could very well be from 100 different countries.
What country law would you try avoid the taxes on reward? What about al the other countries afterwards?
What will Dfinity do or the NNS voters do when the taxes requirement will change in any one country?
It is just impossible for Dfinity or the NNS voters to get involved in the taxes management.
How Dfinity and/or Dominic Williams knows this will avoid taxes (which is not permitted to create a special mechanism). Maybe because of all the manipulation, it would create more taxes Who knows?
For the tokenomics, I think it is way too late to make major changes. People jumped onboard with the actual tokenomics , unless there is a proven way to improve for all. Something like to find a way to burn more (Like ETH have done).
We need to remember that within the actual tokenomics, people have different goal and we have to respect that.
I have staked for 8 years and the price does not bother me at all in short term. I want accumulate as much as I can now with the 8 years staking
Some other people just want trade short term and do not stake at all
Some will hold longer term but keep their bag available to sell at higher price (100% post genesis are at lost now)
and many more options.
I think we need to live with the actual tokenomics and be patient.
I only hope Dfinity will keep focusing on the fantastic programming of the blockchain itself and get out of everything else like Taxes Avoidance system, Peoples party, etc. All other topics can be taken in charge by independent identities.
One last thing to show how nonsense this is.
If the vote pass to make the change to avoid taxes, this would mean the community admits the actual reward system is a taxable event.
So how you guys will handle the rewards obtained so far until the new change? Will you declare it as taxable income?
You want make a change to avoid taxes. So it clear you guys think it is taxable now.
So much non sense to me.
I hope the community will get it and every individual will manage their own taxes in their own country.
Let"s go back to the blockchain growth both in technology and reputation please. It really needs it.
Is overly complicated and will come at the expense of dissuading future potential new NNS stakers from participating in the NNS.
Aims to optimize something (taxes) that is not part of the NNS’s core objectives. I don’t even believe taxes are something that can be optimized due to the opaque and changing nature of major tax codes.
I also worry that if this proposal were to pass, it would pass despite massive community opposition, which carries a massive risk of alienating the IC community and providing a clear data point that the NNS is far too centralized.
I should also add too that there already exists an incentive to spawn neurons during ICP price increases and to not spawn neurons during ICP price decreases.
I’ve stated in some other comments that I oppose to this proposal.
But I’m really shocked to find out how fast this came to become an actual proposal on the NNS, despite the negative and opposed comments of community here on this forum.
Optimising the ICP to avoid USA taxes, it gives me the feeling that it’s purpose is to serve US people more than the rest of the world. What about tax implications in China, Europe and other countries, shouldn’t each community make proposals to avoid their country’s taxes? Taxes are made to be paid, and whatever changes we make here, we don’t have guarantees that we will flee from tax obligations. You may flee temporary, but it backfires later.
I like the option of auto-compoundig, but having all these changes inside one proposal, it would push me to vote NO
Thinking like this: to avoid taxes and price-based modulations, feels like we don’t belive the ICP has the capability to attract users for its tech innovation. And this adds more FUD in and out this community.
If you want to lower inflation, then think of ways how to make ICP burn more, and not how to punish those who sell. I’ve never heard nor seen this. It takes the freedom of my hands. I want to sell whenever I want, without being extra punished. This doesn’t feel right for decentralisation.
I will vote NO to this proposal (and hope that there are no voting manipulations, it smells fishy)
While I admire the clever thinking behind this proposal (the recent addition of exchange_maturity is especially cool), I’ve been opposed to it since I read the Medium article. The main reason I’m opposed is that I don’t think it’s going to achieve its goal of deferring taxes on maturity. Are tax authorities really going to let people accumulate tax-deferred maturity worth possibly hundreds of millions dollars over the course of several years? Under this system, you are guaranteed to receive at least 95% of your maturity as ICP (unless the rules are changed later), so tax authorities can just choose to tax you on that 95%, and we’re back where we started from.
So what we may end up with if it passes is an overly complicated staking system that doesn’t achieve its “avoid incurring a tax burden” goal. If I knew this system would work as intended and defer taxes until maturity is converted to ICP, I’d be all for it.
My stance could change if this proposal were reviewed, scrutinized, discussed, and perhaps amended by several independent tax attorneys in the US (insert your country here). I’m particularly interested in hearing of similar examples where a system like this has worked as intended and stood up to legal challenges.
There is something really fishy about all this. Why would Dominic care so much about avoiding taxes?
Any supportive documents to convince this all will be good and achieve the primary goal of avoiding taxes for US citizen (although US will not be mentioned in the proposal to come)?
Does not make sense, unless he has pressure from a (or few) big investor(s)?
Only asking…
Dfinity and ICP have enough reputation problem now. Why adding more with something fishy like this?
Really, I don’t get it.
