I never understood the reason for the 7 days delay either. It smells like a failed tax optimisation strategy too.
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this is why i think this proposal based on hopium is dangerous. rather than spending time setting up some corporate structure that allows them to stake coins and pay lower tax, they will place their hope on some little trick worked up by the engineers over at Dfinity foundation. now it may well be that a pending case in US federal court will make all this moot in a few years anyway and staking rewards will only be taxed on sale, in which case making this change wonât matter; or it may be that the courts decide that staking rewards are taxed when received and then some unfortunate soul is going to have to go through years of federal court and appeals to see if Dominic is right. Or Dfinity along with other staking type coins could focus on lobbying politicians to explicitly safeguard staking rewards⌠but thatâs asking too much of the crypto bros in this industry to engage with the political class theyâd rather just try to code around that social interaction challenge
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coins are not supposed to be shares but you bring out another interesting point about voting.
the rewards (or whatever you want to call them) are linked to work (voting) thatâs being done on modifications to the system. the renumeration for this accrues during which time the work is done if accounting is done on an accrual basis, if itâs cash basis the revenue would be recognized when payment is received. if the neurons are owned by a corporation that uses accrual basis in their accounting they would most likely need to accrue the revenue as the work (votes) is being done.
I would bet that most of the largest holders have their neurons transferred to some corporate entity. so this whole exercise is moot for them, except that they could gain an additional 5% by timing their disbursals correctly.
only individuals or smaller business operate on a cash basis accounting and so I wonder how much impact this would even have given that dfinity already has so many whales.
IMO this proposal to adjust the maturity system is very sensible. I think it will actually make managing rewards far simpler, since it creates a much clearer line between âincome-like eventsâ (receiving newly-minted ICP), versus non-taxable events (withdrawing your old ICP from a neuron). And replacing the whole âspawn neuronâ thing with a direct receipt of ICP makes everything so much simpler.
This proposal is very well-thought-out. If/when it is submitted to the NNS, I will be voting âyesâ!
Not sure if it has been mentioned but an option to merge maturity into a separate neuron would also be nice, spawing a 7 day neuron everytime is tedious.
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I started out against the proposal but I am considering to vote for it.
As it currently stands Iâm against this proposal, it adds another layer of complexity to an already complex staking system HOPING it might help stakers in some countries avoid taxation for an undefinied period of time, as there is a lot of uncertainty around crypto taxation and lots will change in the upcoming years.
The modulation on newly minted ICP makes it harder for a staker to predict actual APR and harder for analysts to make prediction on inflation and other metrics, the current 5% seems like an arbitrary number, if the point of it is to add uncertanty to the final number of token youâll mint, wouldnât 1% also do the job? Truth is nobody knows cause this whole proposal could be useless to avoid taxation and then we would be left with a ruse goldberg maturity mechanism that serves no actual purpose.
I agree with some changes: change 3 is quite useful and should be implemented regardless of what happens with this proposal, it should also be possible to merge maturity directly to a separate neuron, without disbursing it into a 7 day dissolving neuron and then adding the minted tokens to the neuronâs stake.
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Ignoring the taxation arguments, a good portion of the opposition feedback here is related to potentially overcomplicating the NNS UX and this change driving users away from staking. This is a fair criticism, as I think we all can agree in some capacity that the current NNS app UI/UX is in need of some TLC
Instead of arguing about a one-pager thatâs hard for some of us to parse together, why donât the proponents of this proposal put together a storyboard or build a simple UI/UX that anyone interested (this forum or otherwise) can use to step through the new workflow and put this conjecture to the test. This way, any concerns about the user before any proposal is voted on with respect to the usage of further DFINITY engineering resources.
@dominicwilliams @jwiegley Would like to see a demo of the NNS of what this UX would look like before voting on any engineering power dedicated to the beefier backend changes/parts of this proposal. This could be a video, or even better a static UI (no backend, but realistic interactions) that could familiarize us with how the changes would impact NNS users and also provide the necessary user-testing to refine and catch potential issues in the proposal design with respect to how they are driven from the NNS app.
If others agree, this might be better as a separate proposal (unrelated to the current one) to separate concerns about the deliverables being worked on.
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BTW usually when Iâm describing the complexity arising from this proposal itâs not just the user interface, Iâm talking mostly about the complexity of the system itself. Increased complexity of the system itself may make it harder to explain to others, harder to comprehend, harder to program, harder to test, harder to analyze, harder to make predictions on, and of course harder to make a simple UI.
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This proposal isnât really that complicated. There are only two quantities at play: ICP and maturity, both of which can be staked or not staked. The interplay between these quantities can probably be explained by a single conversion diagram, and Iâd recommend Dfinity add such a diagram to the NNS interface, alongside the buttons to perform conversion. In fact, Iâd recommend that a diagram be designed (with the help of a proper graphic designer) and posted here before the formal proposal is made.
Iâm confident this can be clearly explained.
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On its own it is not that complicated but the existing staking system already takes some time to wrap your head around, so adding another layer on top of it that isnât even guaranteed to fulfill its intended purpose is not a wise decision in my opinion.
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Do these images help? They are what I created to help explain it internally:
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The question is not whether the people reading the forum understand the proposal. The question is whether an average retail investor considering ICP to diversify her portfolio will find acceptable to spend time understanding this proposal and the many future updates to come short and mid-term.
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I mean, most retail investors already donât invest in ICP because they donât understand it. Nothing we do will convince them to invest the days and weeks it takes to get a basic understanding of ICP.
I donât think we should let that stop us from making the system better.
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I agree. The superior technology of the IC, and its increased application, will drive investment.
If anything, the various options available once the proposal passes, to those who choose to stake their tokens, is a marketable selling point by Dfinity and not a sales liability.
The current level of complexity has turned investment into a daily routine: When you optimize the system to be more complex, are you sure he wonât become a market rival? When the community gets better and everyone focuses on the ICP and the community asks the investors to focus on the ICP, the goals may be the same, but different processes may produce different emotions and result in very different outcomes.
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The proposal as stated at the beginning of this thread is now live for voting: Internet Computer Network Status
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My stance against this proposal is the same, I have voted against.
But if it does pass, it would make it a lot more palatable if I could keep my current maturity/staking flow. Adding these extra features as optional would be very nice.
There is some confusionâŚare the extra features optional? Will we be able to keep the current staking and maturity rules if we choose to?
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The current rules will be lightly different : you wonât be able to convert directly your maturity in staked ICP in the neuron whose it is the maturity, as you currently do ; you will have to spawn the maturity and this will convert your maturity into ICP directly to your wallet, but AFTER a delay of 7 days (âdirectlyâ meaning : not passing through a spawned neuron with a 7 days dissolve delay, so you keep the delay, but not as a dissolve delay of a neuron, because there is no more any neuron within this whole operation).
This wonât be facultative.
This is why I consider, since the beginning, as necessary to add these two features :
By doing this, one would allow you and everybody wanting to keep their current way of maturity/staking flow : it means without having to wait 7 days on one hand, and without having to surrender to choose between staked ICP or staked maturity. We should be able to use the staked ICP feature, to benefit of its automaticity, but to also convert this staked maturity into staked ICP eventually.
This proposal allow to replace Staked ICP by Staked Maturity thanks to the brand new Exchange Maturity feature, but many of us will want to eventually have only staked ICP rather than staked maturity. I DMed @jwiegley at 8 a.m UTC, so hopefully, he will answer when it will be available ! If Exchange Maturity is implemented, we have also to allow to people to do the contrary, by Exchanging ICP : convert staked maturity into staked ICP.
IMO, we should allow people satisfied with the current system to also keep it as an option among the new ones, and we should allow them to benefit of the automatic compounding thanks to the staked maturity AND convert it into staked ICP eventually. In its current state, it makes people chose between staked maturity OR staked ICP. There is a passage from the latter to the former, but not from the former to the latter, and it is problematic.
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Your current workflow should mostly remain, just become a little bit easier, since there wonât be a spawned neuron to deal with. In other words, you still either âstakeâ maturity so that it contributes to voting power and thus future returns, or you âdisburseâ maturity in order to convert it to ICP you receive after seven days.
The tangible differences for such a workflow with this proposal are:
- Staking maturity no longer mints ICP until the dissolve delay is zero and you disburse;
- Disbursing maturity will factor in the modulation after the seven day delay.
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