Seeking Feedback For Improving Maturity Reporting

Hi Internet Computer community,

DFINITY has published the January edition of the Inflation and NNS Monthly Report. Please give it a read when you have a chance. After reading the report, please notice the new addition of a section discussing accumulated maturity. I’d like the community’s feedback on the best way to report on accumulated maturity, specifically from the perspective of reporting useful and accurate information.

Useful - the purpose of any report is to provide information for decision making. With that in mind, are there methods of reporting on accumulating maturity (visuals or text) that would make the monthly report more useful?

Accurate - Maturity is an unique feature of the Internet Computer. How do you believe we should report on it to ensure the monthly report is as accurate as possible for making decision?

You will notice in this month’s report I took the approach of reporting the data with minimal context, other than explanation of what maturity is, to ensure that the report reader can draw their own conclusions. I’m open to other approaches as well.

There are a few points I’d like to make that lead to my recent approach in reporting on accumulated maturity:

  1. The industry has a well established definition of token inflation which can be summarized as ([New tokens minted] - [Tokens burned])/[Previous token supply]
  2. Maturity, in my opinion, is “potential” inflation (I used the phrase delayed inflation in this month’s report), however it is unclear what conditions would lead to the realization of the maturity. See point 3 below.
  3. Since Genesis, the accumulation of maturity has been consistent, with the exception of DFINITY’s merge maturity event in August. According to past data the decision of the NNS as a whole to convert maturity into ICP has not been correlated to any network performance, technology enhancement or even token market value. In short, the NNS participants have reliably accumulated maturity at a steady and consistent rate. See the chart below from Circulation - IC Dashboard
  4. The deployment of staked maturity further complicates any analysis because a growing amount of maturity can not be converted to ICP until neuron dissolve.

Interested in hearing your thoughts. Thanks for reading.


Personally, now that maturity is not disbursed until the time of dissolve, if I leave it “automatically staked” my tax advisor/ attorney suggested that now with the new maturity modulation I do not have to report the maturity until the time it is disbursed. Then the moment I do receive the fully dissolved neuron and all of the maturity all I need to do is calculate the cost basis for how much I paid for the original ICP and then the cost basis for the maturity.

For example, if I have 700 icp staked and over 20 years it gathers about 2300 ICP (these are made up numbers for time sake). Then say I paid say $4 for all 700 icp then in 20 years the price rose to say $5 (for time sake not real prediction) I would report the increase as normal. And then I would report 2300 icp as a “reward” essentially saying I paid $0 for 2300 ICP at $5 per icp.

I would report the increase in capital gain on my already purchased icp that was sold at $5 ($700 gain). And the 2300 icp at 5 for a gain of $11,500 (again fake numbers). So, according to my tax consultant, the maturity modulation DFINITY pushed through actually “saved” people in the USA from having to report maturity until the day it is actually disbursed and minted. Then you report that cost basis.

Admittedly, on the surface, this looks like a questionable tax dodge. However, personally, I think this allowed USA investors to continue investing/ staking at their leisure, and still be able to hold the same principles of crypto (not being taxed on staked rewards/ until you sell)

Prior to the modulation, you would directly be given the ICP and it would go right into your stake you would have to do the math each time you added the rewards to your stake to tell the cost basis of what you received. This would mean all USA users including say data centers and node providers couldn’t merge their maturity safely. They would have to keep selling (at least a portion) to get an accurate cost basis (if they were using a lower-risk profile) or they would have to wait.

WITH the modulation adjustment and living in a highly regulated state. I am now able to merge automatically AND not report any gains until I fully dissolve my neuron. So, now, you can actually buy stake, merge automatically, and not report anything (unless you do sell of course) until you dissolve and have all rewards. I personally, will not be reporting anything until the moment of dissolve and sell. You could reasonably leave it going for a full 20 years and not have to report anything now.

I will say the one thing that might be nice for making reporting easier is an Avg. ICP price in the NNS or maybe if the Neuron could read the cost basis of the stake (at the time of staking) and then display the average cost or avg. ICP price for each neuron. This would allow multiple exchanges to send ICP and stake and still keep a more accurate Avg. price.

Right now, if you only purchase on a CEX like Coinbase for example, you do get an avg. share price yes, but then say someone uses Kucoin or Binance or a on chain DEX. The Avg. price won’t stay the same. It will display on the exchanges where you bought and then you calculate the avg price yourself, yes. however, I feel if they have an avg. price display feature on the neruon itself, then over time you won’t need to keep a heavily detailed account. It would just be done for you and then when you do sell, you can report the true cost basis and gains.

If over 20 years someone just gets sloppy or has user apathy they could have trouble trying to figure out the neuron’s cost basis when they do dissolve and sell. This could cause a serious headache for the community when several early adopters and long-time neuron holders go to sell all at once.

Overall, despite the new modulation being seen as a “sketchy tax dodge” I think it is going to open the door for stakers in heavily regulated areas. Making it a more inclusive environment. If anyone does live in a highly regulated state and still has to report their maturity I would love to hear why, at this point they are concerned with it. This would allow me to consider more options. However, I am now confident that I won’t be taxed and I wont need to even report any rewards until the point of sale and the tokens are truly minted and given to me.

I hope this feedback was helpful @Kyle_Langham might have been slightly off topic, however, I hope anyone newer in these areas looking to limit their risk profile reads it and it makes sense to them. So, their anxiety over reporting may decrease over time.



A fact that is similar to the concept of maturity.

In governments when banks have financial instruments offered by the central bank (similar to US bonds perhaps), they are not adding to inflation. It only adds up when banks withdraw profits from the central bank. People withdraw money from the bank → banks withdraw money from financial instruments → This generates inflation.

Printing “bonds” (maturity) is not the same as printing bill (ICP), the concept is the same everywhere in the world.

Perhaps it would be good to redesign the dashboard graph and add the concept of blocked Circulating Supply

if (“Maturity” add Circulating Supply) {

Add Blocked liquidity concept that would be equivalent to blocked ICP.

Circulating Supply minus Blocked liquidity (ICP+M) → Real inflation.


If (“Maturity” does not add Circulating Supply) {

Definitely not adding to inflation.

Since no new tokens were generated.


In relation to bitcoin, it is very clear that bitcoin inflation is how much bitcoin is generated by daily mining. The amount of bitcoin that will exist is not taken into account in this inflation account. There may be 21 million or 100 million more bitcoins that weren’t mined, but that doesn’t count as inflation.

Another example:

WETH <> ETH → We cannot say that what is generated from WETH adds to the inflation of ETH since in theory there is a 1:1 backup of ETH // WETH

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Your report was great but it did not distinguish between “Staked Maturity” and “Unstaked Maturity”, rather looking at it as a whole.

I personally believe this is a mistake. Staked maturity is in my opinion pretty much equivalent to staked icp and maturity is pretty much equivalent to liquid icp.

When folks are looking at inflation, I believe they are thinking through the lens of what liquid supply is coming to market vs. being locked up. That’s my personal read as it’s important for supply pressure. The more supply pressure the higher the likelihood of the price going down.

Hypothetically, if all maturity is unstaked, then there is a tremendous amount of potential supply that really is to all intents and purposes liquid.

My vote would be to include unstaked maturity + node rewards in total inflation.

But yeah, it is confusing.


Hey @dfisher just a quick question on this. Are you counting in the new modulation feature in this? I’m trying to see if you think/ are assuming this stays the same with the new feature. I’m curious to see why you say that with it now being not minted until time of discourse. I’m not saying you are wrong at all. I’d like to see more clarification on this as well. As it seemed a bit sticky in those areas. So, I’m just asking if you’d mind elaborating more on the reasoning behind the thought process. Thanks