Analysis of the impact of i_rep reduction on the capacity of P-Reps to save 5% of total delegation to pay the IISS 3.0 bond

I hope that we had more data to do a proper simulation, but unfortunately we don’t. So we do not know the exact impact 5% delegation bond will have on the current system. The proposal was submitted when we did not see the effect of i_rep changes. We are now proposing if that should be added into the equation.

I hope that, when I said ‘not sustainable’, it did not appear as if buying ICX was not an option. I could not speak for everyone, but for my team, and myself personally, it has always been ‘in’ and never ‘out’. 100% re-stake + adding more. And this was not because of the bond, it happened well before the IISS 3.0 proposal. It’s there in the chain if anyone wants to have a look.

So, no. ‘Not sustainable’ does not mean not buying from exchanges. Rate of growth needs to be taken into account, from both P-Rep perspective and the total network growth. We want to attract new developers, and having them as P-Reps would be a positive thing. Not all of them would have the financial backings, and if it costs more to just run a node than the actual rewards they receive, what incentives would they have to join as a P-Rep that can bring reputation to the ICON public network? This is assuming that they get grants for their other developmental work.

Can we take a step back, and think why 5% bond was proposed? What is the core reason for this, and are we tackling this the right way to help the ecosystem? Are we somewhat future proofing it, or are we experimenting this on the mainnet without seeing what effects it could have down the road? It just felt a little odd that everyone seemed to have accepted it without further discussion on what it could mean for the future. Maybe it is that we impose more % because that is beneficial in the long run. This thread is not talking about right now, but it’s to look at it a few years down the road.

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well since there is no meaningful demand for the $icx right now, it seems reasonable to create that demand artifically through p-reps. at least for mid-term.

Thank you to @espanicon and @TranscranialSol for taking the time to write this proposal and get this active discussion going.

Just speaking from our own experience as a small sub-P-REP team, we can say that a lot of what’s being discussed here resonates with us, and we can definitely see where some teams like @Brandon_FBM are coming from. To be perfectly honest with everyone, since we started out as P-REP #105, our main focus has been trying to grow first and foremost, with things like worrying about saving for the 5% bond requirement put on the back burner (initially our thinking was that this task would become a lot easier to tackle, should we be able to rise up a lot in the rankings by earning more votes). We’re not saying out strategy was ever the right approach, but nevertheless, this was initially our plan of attack.

While we FULLY SUPPORT the recent move to drastically reduce Irep to decrease ICX inflation (particularly caused by P-REPs), it kind of goes without saying that such a sudden abrupt change that leads to ~2/3 reduction in one’s income in such a short period of time can really make it difficult for smaller teams with limited resources to try and map out and plan for their future.

For awhile, we were very confident and thought it would be entirely possible for us to fund both aggressive growth campaigns (which we had been doing up to now, especially on the marketing side), while also saving for the bond requirement, in conjunction, especially thanks to programs like the Pilot Delegation, which are aimed to give smaller P-REP teams a much needed boost.

However, with the recent drastic drop in Irep, we’re kind of back to the drawing board again, trying to figure out how to best balance and allocate funding of both tasks (even with the Pilot Delegation, we’re now earning less than before the Pilot Delegation was awarded to our team, which we’re sure all recipients are aware of by now). And this doesn’t even get into things like paying core team members salaries, which we basically have no room for anymore (however, for non-core contractor services, this is impossible to defer/halt, for obvious reasons)… With that said, we’re coming from a position of being a team currently ranked as #29, so we can only imagine how tough it must be for other sub-P-REP teams ranked further down the list…

This post is not meant to be a rant/tirade/complaining, but more of presenting the reality of the current situation, which we’re sure many small sub-P-REP teams are going through now (this isn’t exactly an easy subject to be vocal about and put into words). The drastic lowering of Irep, coupled with a static (or declining) ICX price, in a way represents a “worst case” scenario for income/planning, which is what we think is what’s prompting healthy discussions on how to better ease the 5% bond requirement burden for smaller teams (i.e., as suggested, make it more tied to how much income a team is actually earning)?

In any case, we’re going to continue to do the best that we can under the new operating environment, and if this means more of a reliance on programs such as Pilot Delegation, Grant Programs, and eventually in the future, things like CPF (which we believe is the intention all along, as outlined in IISS 3.0), then that’s where we will have to turn to for funding. We just sincerely hope that hard-working teams won’t be turned away from external funding, since being “self sufficient” isn’t quite as easy now as it used to be… Ultimately, we’re just trying to find ways where as a small sub-P-REP team we can aggressively continue spending to promote ICON, while at the same time save aggressively for the bond requirement…

Speaking from the point-of-view of just being ICONists, we would say that it would be a real shame to see up-and-coming and promising sub-P-REP teams having to stall or cut back on their aggressive growth initiatives due to any kind of lack of funding reason… Now is really the time for all P-REP teams to be trying to hyper-accelerate ICON growth, in our own opinion. At Icon Pilipinas, we do genuinely believe in the potential and exceptionally BRIGHT future for ICON, so even though the interim is a little painful now, we have extremely high hopes and belief that a better future awaits for all ICONists.

Thanks for taking the time out to read this post!

Let’s keep pushing forward together.

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Great discussion everyone. @espanicon I am sorry it took so long to make my way over here but I have been extremely busy. The 5% bond requirement is good in my opinion in that it makes P Reps have skin in the game. The lowering of rewards is an issue and perhaps with the lowering of rewards the bond requirement could be lowered as well.

Think of it as a floating bond requirement tied to the i_Rep so when i_Rep is at 50,000 a 5 % bond would be required but when it is is at 14,000 the 5% bond would be fractionally lower since the rewards/earning are lower.

Something simple might suffice like this:

50,000 (i-Rep) / .05 (Bond Requirement)= 1,000,000
14,000 (i_Rep) / .05 (Bond Requirement)= 280,000

1,000,000 / 280,000 = 3.5% reduction in bond requirement so the bond requirement is lowered from 5% to 1.5%.

As soon as the i_Rep increases again then the bond requirement will go up for the next term.

I don’t know. We are fully staked across two wallets and I am adding more ICX into the main P-Rep wallet as our bond anyway although I realize that some may not be able to spend the resources to procure fresh ICX to make their bond.

In any case I’ll follow later and appreciate the great discussion here and hopefully we can add a scale that ties the bond requirements to the i-Rep!

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