I am 1 of the 12 voting members for the ICPMN Neuron and I wanted to share my thoughts and reasoning for how I voted on this proposal. I admittedly was torn for some time on how to vote on this particular proposal. The spam proposals, although extremely annoying in nature were indeed showcasing the need for a solution that prevents the current incentive to attack the governance mechanism for the Internet Computer. Eventually, I landed on personally rejecting this particular proposal due to the fact that in my opinion this proposal is by no means a long term solution to the problem exposed here. Furthermore, a big part of my decision was an attempt to represent the communities best interest for the future of the eco-system and for many their investments into their futures. My rejection of the proposal was not because I believe the current state is the right state; but rather the proposal lacked the ability to pragmatically solve our current state for the long term in a meaningful way. Although, the vote did not align to my own personal vote to reject the proposal I confidently stand behind the collective decision the ICPMN neuron made. I am privileged to be amongst 11 of the greatest ambassadors and minds who represent various community members within the IC. Our split vote represents our groups ability to operate based on our own personal convictions whilst always keeping the priority on improving and representing the community.
I canât speak for the VCs, but I did a bit of analysis on the seed round investors. About 2/3 of the top 50 investors have set the majority of their 49 neurons to dissolve. Every month you can watch the transfers to Coinbase and the subsequent market sells.
This proposal just means that the latter 30 out of the 49 will have more ICP to dump on the market.
I think the DFinity team overestimated the loyalty of the people who bought in in 2017 sadly. Not saying spam is a good thing but it did have the handy side effect of moving ICP from people who were going to dump it anyway to the long term holders.
Maybe we just need to let these people dissolve all their Neurons for a certain amount of pennies on the dollar and get it over with.
Oh ok I get it ! Because these neurons were not voting you mean. Ok. Yes i definitely agree with you on this.
So lets say youâve got a hypothetical whale with 1 million ICP locked up, and this proposal reduces the APY (roughly) from 40% to 20%. Thatâs 200,000 ICP a year less for that whale.
Thatâs 547 ICP a day in rewards that is redirected from the whale to people who absolutely donât care about the network, and are probably dumping their tokens every month.
I think somebody worked out that one spam proposal per day (at a weighting of 20) would be a 60% or so increase in rewards. If this whale spent 200 ICP a day on spam proposals (10 ICP * 20 proposals), heâd make > 300 ICP.
Now thatâs just one guy (edit: or girl) who owns 0.2% of the overall ICP. Get a few of them together and it starts to make a lot more financial sense to spam the network.
The issue with voting yes on this proposal is that it doesnât fix the problem, it makes it worse.
- It reduces the incentive for people to lock up ICP as the APY is halved, which puts downward pressure on the price.
- It moves ICP from the people holding to the people dumping, also putting downward pressure on the price.
- It doesnât even fix the problem!
EDIT: âPrice go downâ is bad for us all, not just simply due to the greed of an individual, but at some point Dfinity (now 270 people) will sell their ICP to pay salaries.
I agree with you on the principle and I have always been.
So, to explicit my thought when I wrote this : de jure the problem is not solved, because such a situation as the one you describe is still possible, but de facto the problem is solved, because the probability that such a situation occurs is very low ; so much lower than the probability of someone spamming the NNS with a weight of 20 for governance proposals anyway.
So, of course, I never thought that the problem was absolutely solved, cause, again, by principle, we could figure some situation with massive whales or organisations of a lot of little neurons to run a spam campaign.
We have to recognize that such spamming campaigns were not existing before the rewards weight modification. I does not mean they wonât exist anymore once the changing implemented, because now, people have begun spam and it increases the probability that some people continue this effort, but again, the risk is far lower than with the current system.
I just donât think it reduces the chance, itâs just a numbers game and the spam proposals can easily be automated.
Yes, thereâs a chance that the people funding the proposals have 0.01% of the ICP and this will make the spam not cost-effective to carry out. When a group that owns 0.2% of the ICP can collude to make profit (and the more collusion the more profit per individual), thatâs a low bar to entry.
In an automation case, you would be right : we would have done a terrible mistake. But to be honest, only very few people currently make proposals for ability/will reasons, so I have doubts on a sudden emergence of such profiles. But let us be clear, I am agree with you on that risk and on the fact that it would make the NNS look worse.
Maybe the price action made a few people change their minds. Certain individuals dumped all the way down from $500 to $5, and were still being rewarded with bonus ICP for doing nothing other than hurting the platform they invested in.
I just donât want to see 100s of spam proposals per day, so I hope youâre right hah. May have to invest in a new mouse as a hedge.
About this unfairness and willing to reward specifically active voters, I agree with you. I see a lot of people claiming that they are 8 years gang and that this proposal is unfair, but IMO, to reward 8 years stakers, we should use a proper proposal about VP and rewards rather than making it collaterally with a proposal which was only designed ti increase decentralization : the difference of weight.
So, to favorise the 8 years stakers, we just more simply can cast a proposal about this : @wpb, @Kyle_Langham and @ayjayem made a beautiful proposal about this months ago. Wenzel also proposed a new model of rewarding when started a discussion about offering to very short stakers a reward too. So, I deeply agree with you, but we must fight this problem properly rather than drifting it from a proposal whose the aim was different.
About this, you are welcome to follow our neuron : we vote immediately on spam proposals, but we let delay on the other ones to let people vote by themselves if they want. So, feel confortable following us without risking to see your vote âstolenâ : you wonât have to vote on spam but will still be able to vote on other ones until the last day.
Thatâs good to know about your Neuron, didnât realise that.
I shall enter my mind palace and have a think about better solutions!
I think this is a good point that is not discussed very much because itâs difficult to recognize. Most maturity from voting rewards has not been minted by either merging or by spawning. It is still sitting in neurons. All dissolving neurons are earning maturity. For seed investors who donât care about the ecosystem and have never participated in governance, there will be more ICP minted from their dissolving neurons than what is known to be staked in those dissolving neurons. Every month for the next 3 years it will increase each month because of high voting rewards earned by default following. Spam and higher proposal weights did redirect those rewards to active governance participants, which is the intended purpose of the tokenomics. Perhaps it will now become a higher priority to implement proposal 55651 so followees are selected by choice instead of default and everyone who is collecting voting rewards meets a minimum threshold of active participation in governance.
So, could it be that Dfinity insiders who were seed round participants want to roll back the enhanced rewards for governance because it led to active members gaining through spam proposals at the expense of those insiders with dissolving seed neurons? Sounds more plausible than the idea that we need to roll back because new investors looking at the NNS would be put off by spam proposals and conclude that ICP is a joke blockchain. I think it is imperative that governance votes be rewarded better than admin votes. Letâs see how long it takes Dfinity to bring back something the community voted for enthusiastically.
No, donât think thatâs anything to do with it. Every active voter gains from this spam. The people losing out literally have no interest in ICP other than selling it.
I know a guy with 2 million ICP who hasnât done anything with his neurons so far because he doesnât have the time to sit down and work it out.
Letâs just see what % of ICP is staked into long-term Neurons following this change. Iâd expect the amount to be cut in half.
Sadly I only saw this discussion now. My Neuron is following someone who voted Yes and I canât change the vote either now.
One reason I just locked up 2 weeks ago a lot more ICP was the higher APR which will be reduced via this again.
Anyone who thinks it takes too much time to vote on these can just follow some other neurons.
I also didnât see a single calculation if itâs still viable to just submit now 10x more spam proposals. It will reduce the rewards for the spammer due to more costs but not even looking at this possibility and having next month not 5 but 50 spam proposals seems like an oversight.
Looking at the votes it seems a lot of people who are actively participating voting no and the yes votes are mainly blindly following without expressing their real opinion.
If you boil it down you ask people to skip ~20% APR vs not to have to click some more for the few big neurons people are following. The idea in the beginning was to reward active folks more which is happening right now.
I wouldnât be surprised if this results in a lot more spam to get the higher APR never the less.
Quick add:
Having 1M ICP locked for 8y in a neuron getting 20% more APR via this makes it viable to Spam 54 proposals per day.
Guess what, you could have if this proposal had been implemented: Proposal: 38985 - ICP Dashboard
But apparently Dfinity would rather prioritize tax evasion for VCs than basic voting features.
It also didnât help that this proposal has been submitted a couple days after it was initially presented and ICMN voted a bit too soon, they could have waited last minute to make sure nobodyâs vote was âtrappedâ
happy to see I am not the only one seing this tax evasion scheme. This is very bad for all of us.
I donât think there is much to see, the proposal literally lists âHow to avoid incurring a tax burdenâ as one of the issues it is trying to solve. Now do I think merging maturity should be a taxable event? No, but deliberating proposals hoping they might help avoid taxes isnât a good move for a decentralized project and prioritizing said proposal over much more important stuff just seems ridicolous.
Here is what it looks like from an outside prospective: âHey you know ICP, that project that did nothing but dump for months and is commonly accused of being a VC pump and dump? Yeah the foundation proposed to change the protocol because a seed investor had issues with taxes and they are prioritizing this change over critical DAO improvementsâ. People think spam proposals make Dfinity look bad, when they are nothing compared to stuff like this.
I agree but what you, me and Dfinity think as if rewards are taxable or not does not mean anything. What is important is what IRS or other government think and do about rewards. This is why, for a minimum, they should have seeked an advice from a professionnal tax firm.
But beside this, agree 100% that Dfinity has no business in tax management for anyone.
Update: I just merged PR (#1149) to make NNS-dapp UI allow vote regardless if proposal is declined or accepted as long as the duration is valid.
Might be a bit tight to propose a new version this week but, itâs implemented and now it goes to test.