Even if all the bigger neurons belong to different individuals, a decentralized vote on various subjects is still at risk of becoming centralized.
Let me illustrate my point: When all the bigger neurons agree on something, the others donāt matter. For the others to matter, the bigger ones need to disagree with each other. For even smaller neurons to matter, all the rest need to be in disagreement. This could continue until, finally, the smallest neuron with 5 WTN decides the outcome.
Since the group of large neurons wonāt be voting based on their spiritual beliefs, but rather on monetary incentives, it would be valuable to know what they have in common- especially if they choose not to dox themselves.
If they are node providers, they are very likely to vote in favor of increased NP rewards.
This sounds like the same issue applies to the nns voting structure as well.
One thing that doesnāt make sense to me is this massive concern that the minority might not get their vp heard when out voted.
Canister controlled neurons have a theoretical cap at 10%vp and one person (Adam) can vote with about 8%vp on the nns. Adamās one vote has a more direct impact on protocol changes than the entire dao.
Even at 10% vp the vote has to come to consensus among multiple people while Adamās one vote practically counters or doubles the vp towards any one proposal.
I think some of the reasons infu is concerned with WTN specifically. Is due to the nature of its underlying financial instrument which coalesces the voting power of the many, into the hands of the few.
Regardless of your opinions about the ethical implicationsā¦ i already made those points elsewhere.
It seems prudent that additional scrutiny is applied when were talking about significant leverage of voting power which in the future will be derived from āskin in the gameā of participants who are not actually the ones voting.
The nns was designed originally such that individuals would have to lock their own tokens to have āskin in the gameā WTN in its mature state will leverage the power of other participants, on a potentially massive scale.
This is true but to what extent do people offload their governance responsibilities by following others in the nns?
With wtn this acts as a form of voter delegation as well. The only difference is the dao itself has multiple people who have to come to consensus vs one follower.
A majority of people who look to invest into icp donāt do so because of the long time commitment to staking for apy. While this is an issue itself, wtn opens up the doors to this sector of investors while ensuring that governance is handled responsibly through a dao.
(As for skin in the game, everyone had to buy into wtn. Outside of team allocations everyone contributed their icp into this and therefore put skin in the game.)
Team put their skin in the game through building and contributing to the protocol on many levels. They are currently working on allowing the minimum dissolve delay to be reduced to 3 months for the entire nns. They build for the entire ecosystem and not just wtn.
I have 0 issues with people locking their tokens in the nns. And following whoever they want to follow.
I agree, this is why the nns allows tokens to be locked for short periods (6 months) or long periods.
The idea of staking on the network, is that the tokens must be locked to ensure voters are incentivized for their commitment, the nns is designed to award individuals with longer commitment with more voting power, this ensures incentives are aligned and it makes sense.
An additional benefit of tokens being locked is it (temporarily) reduces the supply which is beneficial to all holders of icp if there is significant demand.
The issue with liquid staking protocols, is they circumvent this goal. They allow people to āhave their cake and eat it toā by offering a twin token that is simply better.
However it is simply ābetterā at the detriment of all other holders (of icp). As these ātwin tokensā allow yield to be gained while essentially remaining in circulation, at the detriment of people who are not the ones participating.
Ok, im not going to argue about whether increased tvl is better or not. Iām going to come at this from a different angle. And then im gonna go touch grass.
I believe an important aspect of our governance is that the people locking their tokens (and earning yield for doing so) are the ones voting in their own best interest.
I would argue that the DAOs interests are not aligned with the interests of nICP holders. In fact they are opposing. But the DAO is leveraging the voting power of nICP holders. But again the ones being damaged the most are the ones who decide NOT to participate, its a very clever financial instrument.
Financial instruments such as this one allow their owners to wield massive power in the ecosystem and we should be extremely thoughtful about the implications of their use, even if we are the ones who stand to benefit.
First of all let me point out Iāve never been involved with WTN in any way as I have my own reservations about liquid staking in general, the fact I havenāt adopted it doesnāt mean Iām opposed to the expressed concerns, in fact I agree that more time should have been spent validating alternatives to solve the issue before requesting modifications to the governance code and I support pushing for changes if they need to happen.
That being said, the reason Iāve rejected 136299 is that it isnāt actionable, this has always been a requirement for governance proposals and itās likely the reason the foundation also rejected it rather than abstaining as they usually do with motions heavily debated by the community.
For reference I did vote in favor of the original āDrain the swampā proposals as they concisely described the issue at hand and put forward a course of action to solve it, this one on the other hand doesnāt really lead us anywhere regardless of its outcome.
With the nns allowing for users to delegate their votes to people we face the same dilemma. Wtn is just another platform for users to delegate their vp.
The only difference is the nicp allows for defi and liquidity to flow into projects and dexs freely. We all know icp struggles with liquidity on everything and this helps solve that issue.
The main difference is that outside of WTN people who wish to delegate their vote need to reconfirm who they trust to have their voting power every 6 months.
That is very different to having a 6 month unlock that WTN participants have.
In order to change from following WTN, the particpant loses all age bonus and ends with zero voting rights on the NNS.
If you dont renew following someone after 6 months, you still retain your age bonus and can vote for yourself straight away.
I know people are rewarded at a higher rate for participating with WTN, but I wanted to highlight this other difference too. Also are there not diminishing returns for WTN participants as the project grows?
One example where it is true is the financial relationship in which they are engaged with the DAO. The nICP holders would like more yield for them when they cash out. The DAO would like that yield to remain in the neuron, or be paid to the DAO.
I suppose its not fair to say their interests are ALWAYS opposed, but thats the problem here. Interests can be aligned until theyre NOT. And when they are not aligned the scale of the problem is enormous.
Thought experiment:
For purposes of simplicity im going to ignore additional āsmart contract risksā because they arnt relevant to the argument.
From a game theory perspective. Since nICP is always ābetterā than ICP, meaning if youre holding nICP and im not, we both have liquid tokens but im being diluted.
Shouldnt all people holding liquid ICP convert it to nICP? Is this a desirable outcome? It may be desirable for whoever can control the DAO. Its a disastrous consequence for the network. I dont like where the game theory leads.
Normally when two people enter a financial agreement only the ones engaging can be damaged (or benefit). This is quite a special example where the party damaged most is the one NOT participating.
The only thing preventing this terrible outcome is people who know better choosing NOT to participate, at their own expense.
You can figure by yourself. You just need to read any proposal that has been made to upgrade a WaterNeuron canister.
Weāre not trying to hide anything. You had the exact same opportunity as everybody else. But after careful consideration it looks like you decided to invest your valuable ICP in Decide Ai, catalyze and fomowell.
This financial trickery aimed at coalescing power in the hands of the few, at the detriment of all holders of icp has been built in the open and challenged by no one.
Nobody seems to care the damage this project will do to the governance or the massive dilution of ICP that will occur because people can retain liquidity while earning yield.
Everyone is just arguing over how decentralized the control of this thing is and nobody is challenging the premise.
Because as long as you have the keys to the nukes and not adam its fine right?
The premise was challenged long ago and those of us who resisted it originally finally lost when proposal 129727 passed. DFINITY clearly prevented canister controlled neurons in the beginning, then there were a lot of community complaints and requests to lift the restriction. So they changed course and allowed this experiment to get started with limitations and monitoring. Itās what the community at large wanted.
If you havenāt already, you should read that proposal 129727, the forum thread it references, and then other forum discussions prior to that one that discuss canister controlled neurons and self-authenticating principals. Itās quite the history. The decision to allow canister controlled neurons was not taken lightly and it was done with full knowledge that it would lead to applications like WaterNeuron. Everyone in the community had an opportunity to engage in the discussion and let their voices be heard.
The consequences of the decision were predictable back then including the fact that applications like WaterNeuron would some day be challenged on both fundamental principles and the size of its governance influence. You are just resurfacing old arguments, but what is different is that you are looking at it through the lens of experience and as someone who is not invested in or engaged in the WaterNeuron community. Itās an important voice and Iām glad you are raising it.
While Adam has the right to complain, he also has himself to blame. He could have been engaged in this governance discussion back then before canister controlled neurons were ever allowed. He could have invested more in WaterNeuron (itās really odd that he invested so little in WaterNeuron and so much in other SNS projects). He could be acting more professional in all these discussions in order to gain and maintain credibility instead of turning everyone off. As he himself has admitted, he was asleep at the wheel. Itās a shame too because he is such a big investor in this ecosystem. His governance rewards and his large stake should have incentivized him all along to be more active in governance. His power and influence is large enough that he could have paid people to keep tabs on the major issues and vote in his best interests. I guess he is awake now. Better late than never. Itās an expensive mistake for him to make, but he made it all on his own.