There are a number of reasons, existential and practical. Let’s set aside the existential for as we’ve discussed how those can be mitigated.
The project is asking for 70k ICP (> $700,000) from the neuron fund to seed the attractiveness of nICP. This increases scrutiny on a practical level as NF holders need to ask if the investment of that money in this project is ‘worth it’. The NF participation ramps up pretty quickly and can end up being a huge part of the investment(see NNS Dapp).
Perhaps the NNS shouldn’t be voting on the NF participation, but for now, it is and so anyone asking for these funds should expect scrutiny from the community.
Many SNS projects specifically refused NF funds for this specific reason. The NF is probably why there was a rush of not-ready-for-prime-time SNSs and now here it is causing more scrutiny than you would like for a project you are a fan of.
If water neuron were launching without NF participation I likely would not have recommended outright rejection(which I’m pretty close to no longer recommending) and would have focused on the existential issues that we need to monitor and why we need to monitor them.
I do think the bar for rejecting an SNS that doesn’t request NF funds is much lower/almost non-existent (perhaps porn/outright legal activities should still be reject) than one that does.
In Water Neuron’s case I think the large team allocation coupled with the short team lock-up was a red flag for the NF. Extending the lock-up reduces that significantly, which sounds like it is being considered. The NF can’t just hand massive chunks of ICP to Founders and let them run off with the ICP and stay in existence for long. I’m in no way implying that I think WTN team would do that, but they have ways to ensure that they don’t which I’ve recommended.
I’d highly recommend separating the NF vote from the actual SNS vote for everyone, but that is an NNS governance matter. (Even better to let an SNS launch in a disconnected state and then ‘upgrade’ into the SNS. once they’ve demonstrated competence and value. As a bonus this would make the swaps self-run and would alleviate the issues that my lawyers have advised me about where US citizens who vote to launch a token swap could be held liable for any litigation and/or regulatory violations…currently ICDevs has to reject ALL SNSs and I do so as well with my private neurons for (my stupid country’s)regulatory protection). I’ve discussed a good bit of this before(ICDevs Votes on SNS and NNS Proposals). It is a contested topic, but I’ve chosen to be safe until the US further defines it’s rules and regulations.
Upgrading a set of canisters to move from one subnet to another or to be included in a list would have no rational legal consequences, especially if the token had been previously launched and demonstrated utility.