i don’t see this as a problem. someone’s invested more in this system and they get an advantage.
So you want someone with more money to have an exponential advantage? Where does your assumption come that 10% invested of 2 people with different net worth should lead to an advantage for the one with the higher stake?
Large holders have to find Otc buyers for their 100ks of ICP… That’s indeed such a problem if you have net worth of millions of dollars and you have to knock on the door of an exchange. Indeed, I’m so glad that I’m not a millionair and won’t have to deal with such things. *Sarcasm off
The only reasonable argument is the security aspect, if you have a higher stake. So large holders want to get something extra for having to deal with higher security for their stake? Is this your main concern? Just to add a few points to this aspect:
- If yes, it should be discussed and not be hidden behind the shadow of unclear tokenomics.
- The exponential function is hard to handle. As I’ve provided in multiple comments, the advantage of this would multiply over time to such an extent, that a large holder could probably buy up a whole country just to secure his stake.
- IMO the protocol should aim for as much decentralization as possible. Since that can only happen over governance, it should mean that neurons/votes/holdings should be distributed over time. Additional incentives to prefer larger holdings are a bit contrary to this. @lastmjs made a great podcast about this.
- Large holders have already got a big advantage they always seem to forget: Their large holding. Someone with a large holding can live from the staking reward atm. Spending a few ICP on additional security seems to be a fair trade for beeing able to practically not work and earn as much as a few middle class workers a month.
- Comparison to other projects: Eth PoS doesn’t give you more just because you have a high stake. Also not Polkadot, or Cardano. So why do we want to go a complete other way here again?
At least we got rid of this with the merge maturity button now, so the only discussion point is the liquidity aspect. One of my arguments:
If there is serious market action, high stakes have got a liquidity advantage, which small guys don’t have.
E.g.: ICP rises to 300$ => 1kICP probably gets 1-2 ICP a week. At 300$ that would suddenly be 300$ to 600$ on liquidity in a week. The high stake holder can dump it, the small guy (10ICP) can’t (even if it would only be a fraction; we speak about 0.01 to 0.02 ICP a week =>@300$ : 3$ to 6$).
It’s the simple fact that the high stake holder can (and will) use it to realise profit and engage in the market, while the small fish can’t.
If you want to say that this is justified because of greater expenses for security, then I’d like to have some calculations/facts and discussions about this.
What is an acceptable amount of money for something like that? Is the 1ICP treshold liquidity advantage good for this? Should we make another incentive? E.g. Dfinity treasury wallet pays for this directly, instead taxing the small holders indirectly via the liquidity over the 1ICP treshold? What do others say to the presented points above?
Why do other projects don’t have this kind of arguments/problems?
Of course they have other approaches via stake pools and nominated proof of stake, however they are not so different. The stake pool operators collect a certain amount of fee of the people, who are delegating to them.
=> If that is translated, it would mean that the neurons we’re following should collect fees. If someone with a high stake wants to collect additional income, he should advertise his neuron and make others follow him. Would that be an approach suitable for Dfinity?
Via this he could earn without giving others a liquidity disadvantage, he could pay for additional security, and it would lead to more decentralization of the IC, since direct participation in governance becomes rewarded more. Of course he’d also have to work for his earned ICP, that’s what I see as an absolute win for all.
Work more => earn more instead of have more => earn more
My main concern in the neuron discussion is that the free market will find it’s paths anyway. Surpressing free market processes over the long term, only destabilizes the system. Actually we could both sell our votes atm. It doesn’t make sense but we could. You could call out a price and I could answer. Buying votes without transfering ICP or neurons. It’s possible.
I hope there will be a Townhall soon for all this kind of discussions.