The discussion is really great.
@ayjayem You’ve proposed the following:
To the extent that it’s currently possible to discourage malicious behaviour using technical means - until we figure out a better, more sustainable way - I think we should. In the immediate term, for example, that may mean ensuring that every Internet Identity is created with a seed phrase, and making that seed phrase permanent and impossible to delete.
@wpb 's statement is right on this:
That would make it a huge personal risk to buy a neuron from someone else. This seems like it would be an effective deterrent for neuron transferability.
@ayjayem you’ve correctly mentioned, that my approach would be quite liberal.
At this state, I’d actually see adding a permanent seed phrase the opposite of what ICP should do. It’s another restriction, another fear that is carried on, further preventing some secondary liquidity.
IMO neuron trading is a huge opportunity which could embrace a completely new industry and economic system. An opportunity which could bring growth and worth to ICP. I think we agree on this, however we disagree on the path. Maybe I need to research on all of the security concerns, in order to understand your points better. If you’ve got more infos/statements/a list of concerns, I’d be glad to dive deeper into it.
Here I can add another crypto project: Nexus Mutual
They have got a liquidity pool. If a certain treshold is not sustained, NXM can’t be liquidiated directly in the pool. They knew that and helped to actively embrace a secondary market. If people want to get rid of NXM, but the pool MCR (100% I think) isn’t met, they can’t liquidate directly.
They wrap NXM to get WNXM and sell it. The market knows this liquidity issue and says: “Well if you want to sell WNXM you’d receive less than with the current pool ratio.” => price difference and sellers actually lose money. There is an economic thinking now. NXM also has governance rights as far as I know. I’ve not yet heard that bringing in secondary liquidity had negative impact on voting behaviour.
It would be interesting what they say about this concern.
If this is translated to ICP it would mean that a simple neuron trading plattform could be embraced where there’d be a difference on the spot price according to supply/demand. The market would price in the liquidity and lock- up period. Someone selling will take e.g. -20% on his 2y locked neuron.
Again, I have to ask: What are the exact concerns, if other projects show much more courage on things like that? If the correct concern is, that someone votes against the protocol, sells his neuron and leaves afterwards, then you always make the statement out of the view of the malicious actor, not out of the view of the potential buyer, who stacks cheap ICP. Their time horizon is probably higher than to the next neuron trade. If they seriously believe in ICP over the long term, they will buy up all the cheap neurons, and let them work for them. They’ll try to engage in governance to actually improve the value of ICP. If something like that would come, I’d only buy neurons and not ICP. If they offer me cheap neurons, be sure I’d take them.
I absolutely agree on your following point:
And here, I think we need to seriously consider the possibility, remote as it may seem at the moment, that we could encounter malicious behaviour from interested state actors, or other monied parties with non-financial goals. The IC could be world-changing, and very smart global players have already evidenced their own early belief in this too, to date having invested at least hundreds of millions of dollars.
We should make some scenarios and ask ourselves how a potential malicious actor could trade/benefit from such a system without risking everything. Im really interested in all the wild scenarios, possibly coupled to insights in ICP security.
If we take a look at it from the free market again a few things could happen:
Huge spot difference on neurons to liquid ICP. => People will find a way to use it: Either speculate on falling ICP price/ or buying up cheap neurons. This could actually be a healing process telling us more about ICP itself and how people think about it, than anything in blockchain before. Look on how “On-chain analysis of btc and other assets” suddenly became a completely new phenomenon/analysis tool for traders/analysts etc. What could neuron trading possibly do? This could be huge.
I see reports of neuron prices in the morning. Wild speculations, analyst coverage and interpretation what this tells us about future ICP price… never ending possibilities with neuron trading alone.
For me it’s much more a great opportunity than a security issue.
The free market puts pressure onto things which don’t work until they do. That’s why people flee out of fiat into crypto.
We should accept all the signals. By actually not adding a permanent seed phrase we’d say in full consciousness: “Hey, we see it and we actually like neuron trading.”
Now adding a permanent seed phrase would create the next wave of anger and could even harm the project:
“Now they’ve also taken p2p neuron trading.” I already hear it…
A quick response to another statement:
So as the IC continues to mature and prove its potential global influence, I don’t think we’ll be able to rely on ICP buyers’ financial self-interest alone… it may take more than that.
IMO that can be resolved by great governance + community. If your ICP get coupled to governance rights with an enormous bandwith of voting decisions you can participitate, people will have less incentive to look at prices. => One doesn’t give up such a right that simply. I actually don’t care if the price moves +50% or -50% atm, if I look at my ICP holding as a form of democratic right. If we’d flee from a country everytime a government makes a bad decision, we’d be normads again.
This is another aspect of tokenomics and I’m convinced that great governance will lead to community support, and create inherent value for a project. If ICP goes along this path it will have a bright future.
I’ve just seen a tweet of @lastmjs and that’s exactly the way to go.