Temperature Check Proposal – Introduce NNS Treasury

Hi @dfisher,

as a read-across I would like to mention that the concept of a NNS treasury was also recently raised in the context of the Community fund (CF) in this post.

In particular the post also mentions that the NNS treasury is meant to be extendable to use cases beyond the CF

As you point out, there is a lot of design work (and risks) we will have to deal with it.
Nevertheless, also from my perspective, creating a NNS treasury is worthwhile pursuing.

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I’m glad @dfisher is kicking off this conversation. For the record, I am fully in favor of there being an NNS Treasury. In my perfect world that treasury would be funded with the governance rewards of inactive NNS participants (those not voting) using a modified version of @skilesare’s spam resolution idea (instead of not minting the rewards for non-active NNS participants, those rewards would instead be minted into the treasury fund). However, it seems like there’s no easy way to make this happen because there’s a lack of available developer time to develop and test the needed code changes.

One low-effort solution would be an SNS proposal for a CF-funded treasury. If that proposal passed the NNS, then the CF neurons would get tokens representing their donation to the CF-funded SNS treasury and those tokens would provide governance over the treasury. I believe this can be done standard with Milestone 2 of the SNS (ie, no additional code changes required). The downsides of this approach is the treasury would consist of only funds donated by the CF, there would be decreasing value of the SNS token (since it would only have rights to the treasury) and it’s likely that the broader NNS or ICP communities would reap much of the benefits of the treasury usage.

Instead of 1% of maturity (i.e. inflation), another option is to redirect the ICP transaction fee (which is currently burned) into the treasury instead.

That would be more of a tax on actions taken rather than a tax on passive income.

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Since the IC has a reverse gas model, that would be more of a tax on developers and product teams than on investors.

I’m not a huge fan of taxing the creators in this small, but growing ecosystem - why do you think a tax on the transaction fee is preferable?

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Not necessarily preferable (and those costs can be passed onto users if necessary), but it’s another option. Personally, I’m undecided between the two.

Hi all,

I would like to outline why DFINITY has voted yes on the proposal “Temperature Check Proposal – Introduce NNS Treasury.”

  • The current form of the proposal is high-level and comparable to an exploration feature. It does not describe a directly actionable implementation proposal.
  • This is reflected in the proposal stating that voting yes is understood to be “support further exploration of the NNS Treasury idea.” DFINITY is interested to participate & contribute to that discussion and hence voted yes.
  • We are conscious of the fact that there are many aspects of a potential NNS treasury which need to be defined and also several concerns in the community which need to be considered.
  • In parallel, we already had some discussions within DFINITY on whether the current grant process could be steered via NNS voting. These ideas could be taken up as part of the NNS treasury discussion.
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Using transaction fees is basically inflation as well. Tokens that were meant to be burned are now being introduced back into circulation.

What about this, we take 2% of maturity. 50% of maturity taken will be used for treasury funds and the remaining 50% will be burned. We’re still immediately introducing more tokens into circulation but we are also destroying tokens that would eventually be introduced into circulation.

Another thing I read are neurons that have been idle for certain time period let’s say since launch their maturity can be used to fund the NNS but that is also another form of inflation since those tokens could never be introduced back into circulation due to many reasons like say the holder died or they lost their keys. Honesty we could burn idle neurons that would be a form of deflation.

I honestly think all funding should derive from maturity. Funding for everything even node providers. I don’t think we should create new tokens outside of maturity. It be a form of tax which would be extremely minimal for all neuron holders.

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So I see the majority voted Yes, what’s the next step?

So those who stake fund price growth for those who just hold without locking?

I don’t think anyone is willing to ‘trust’ the NNS anymore for stuff like this.

  1. the treasury idea, I like it

  2. just like the social funding, why not give neuron holders the free choice if they want to tax themselves, only that is fair

  3. ppl who decide to tax themselves, we should try come up with an incentive to the taxpayers, just like in the normal world, I pay tax but I get some benefit, like healthcare or a developed education system etc.

As without tax, I would not benefit of the state built infrastructure.

  1. idle neuron holders should not be penalized, these are individuals / groups who took a risk by investing and locking their funds, very early, there should be no discussion whatsoever on how to penalize them.

Just because someone is not participating doesn’t mean they should be treated worse than any other, the risk is the same for everyone.

It also would greatly damage the icp reputation, you have ppl invest and lock their funds, with no interest in participating because they have other topics to tend to in their life and give the trust to nns , the dao, to make the best decisions for the network.

the rules changes against them in the long run. If this happens, not one investor will decide to create a new long term running neuron.

Final thoughts:
IMO, we are starting to touch topics that shouldn’t be touched, long term neuron holders and fundamental tokenomics, these are the basic fundamentals, if we change these every year, then who will come to invest for the long run, the risk just grows and grows, beyond market price involvement. Deadly stuff.

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After some times and a lot of reading, i will vote no on treasury proposal. Crowdfunding sound better than treasury. I know my vote is somewhere 0.00000001 but every vote is important. Treasury sound good but cand more damage on long terrm and im here for long term

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Oh look its another tokenomics proposal that ultimately messes with peoples rewards, seriously can you people not go one week without trying to rob us

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Hooooo my lord. Based Indeed

This is an old proposal topic. It is not current.

If an NNS Treasury will make the IC a better protocol, then I support it.

Remeber me the next time you advocate to tamper or “fix” the tokenomics

Yes, @dfisher, an NNS treasury or community fund controlled by a decentralized authority would be a game changer if conflicting priorities could be rationally resolved. However, we first need to understand that the NNS is currently not capable of prioritization, since it relies only on approval voting, like all DAOs. Approval voting implicitly assumes that all proposals are effectively independent of each other and not in direct conflict as “alternatives” to be prioritized (e.g., competing for the same limited funds in a resource allocation context, as you describe). In short, I would strongly support such a treasury fund eventually, but definitely not with the NNS as it exists today (i.e., regardless of whether DFinity becomes fully decentralized or even is not allowed to vote). My arguments here directly address the concern in this thread from @bjoernek and other DFinity members about “whether the current grant process could be steered via NNS voting.”

Atomizing decision-making authority is generally not a difficult task to initiate when almost everyone agrees (as we already do) that there should be no dictator. However, resolving the conflicts between individual priorities most certainly is difficult, especially when those conflicts grow exponentially as decision authority is atomized. Many other complications can arise too, such as when decision makers have different confidence or familiarity levels regarding certain alternatives, or when they have varying levels of expertise on different decision criteria (e.g., performance vs. cost vs. end user experience benefits).

I am currently scoping out my PhD project that is officially kicking off next year. A significant focus of mine will be to address this collective prioritization problem, which actually has quite a long history in multiple academic fields. This problem is far more complex than it first appears, as outlined in my first (and second) posts on this forum yesterday, linked below:

If someone at DFinity is interested in collaborating on a mock-up of a voting front end (on the Internet Computer, of course!), then perhaps we could experiment on different solutions together as I work on building out an algorithmic back end during my PhD project. A front end should not be that difficult to mock up fairly quickly. It would just have to include a more robust capture of prioritization data beyond an up or down vote on a single proposal. Other researchers should also be encouraged to experiment independently with their own algorithmic back ends based on any pilot voting data generated.

Computational social choice as a nascent field of research offers a rich set of options to address this collective prioritization problem, so it would be wise for DFinity to collaborate with multiple researchers to pursue multiple potential solutions. DFinity has the largest team of research cryptographers on the planet. So the intellectual benefits of leveraging a healthy combination of diverse knowledge and friendly competition to solve difficult computing problems should already be quite familiar to everyone here. I personally believe that such a diverse intellectual environment is what made the Internet Computer possible. The IC protocol already transcends far beyond the scope and potential impact of any other blockchain. I also believe that this is what could make the Internet Computer the future of the entire Internet – to allow it to transcend even beyond what many say is impossible.

As DFinity correctly stated in the past, the NNS is truly the “crown jewel” of the Internet Computer. However, it is also the IC’s most vulnerable single point of failure in achieving its grander vision for humanity. That is no doubt why the NNS persists as the IC’s most publicly criticized feature in generating FUD hysteria. In my view, the challenge ahead of us is clear: if we cannot cross the prioritization chasm in DAO governance, then I fear that this crown jewel might eventually be lost as the FUD hysteria begins to take root in reality.

The central issue here is much bigger than a treasury fund proposal. Using the NNS as it exists today to prioritize competing resource allocations of any sort would only expose its fundamental weakness more explicitly. This would lead to more FUD hysteria as “infighting and politicking” inevitably erupt into public view. When the heavy hand of dictatorial power must publicly intervene to resolve these conflicts in an unavoidably arbitrary fashion, it would uncomfortably remind everyone which trusted, centralized authority has always been required to make such resource allocation decisions. No conspiracy would even be necessary if it could easily be painted as one.

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Check what Cardano’s Project Catalyst has done in the management of the treasury. They have resolved this prioritization problem through an appropriate frontend,allowing stakers to vote while assigning priority.

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Thank you for the suggestion, @singularity. However, it looks like Cardano’s Catalyst Voting app is just another form of yes/no approval voting without any prioritization input from individuals, per the documentation page linked below. The user interface and workflow to capture votes appears to be very user friendly, which could be useful to emulate in some respects. However, none of that does anything to address the prioritization problem, which relates to how the votes are aggregated based on every individual’s ordered list of priorities. If I am missing something based on my admittedly cursory review, then please point me to a relevant documentation link.

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