With a large increase in demand for CPS funding recently, the team would like to provide two solutions to problems that have arisen within the CPS protocol.
Problem #1 - Fixed Distribution Amount
Currently the “max bnUSD cap” of 200,000 bnUSD serves as the maximum amount that can be proposed for each Application Period. This is flawed because it creates the assumption that there will always be 200,000 bnUSD available for funding. There is no sense of scarcity for funding, causing no incentive to deny a proposal.
Solution #1 - Dynamic Distribution Amount
At the end of each Voting Period a “distribution amount” will be determined based on how much bnUSD is in the CPS Treasury. This calculation will always simply be:
- Distribution amount = bnUSD amount in CPS Treasury
This is important because if lower-quality proposals are submitted during one period, it is in the network’s best interest that P-Reps deny the least valuable proposals. This will allow for additional funding next period, where there may be higher quality proposals.
Problem #2 - First Come, First Served Funding
Currently, we are experiencing projects getting an opportunity for funding on a “first come, first served” basis. Those that are able to submit their projects first during the Application Period are the only ones with a chance to receive funding during the cycle.
Solution #2 - Prioritization Funding
I believe this can be improved by introducing a “prioritization vote” by P-Reps. P-Reps will conduct their voting for each proposal as normal, but they will also need to submit one “prioritization vote” each period. P-Reps will rank the proposals from best->worst based on the value the proposal can provide to the ICON ecosystem.
This will allow for any number of proposals to be submitted during the Application Period, giving all teams a fair shot to receive funding. This also ensures only the highest value projects will receive funding during the cycle.
Prioritization Mechanism Design
In this case - there was 185,000 bnUSD in the CPS Treasury at the end of the Voting Period (making the distribution amount 185,000 bnUSD).
The CPS will be entering “maintenance mode” to start this upcoming Application Period, meaning no proposals can be submitted during this time. This will allow the team adequate time to test and implement the above changes.
I will keep all prospective proposals notified of the maintenance timeline, but there should be plenty of time to submit your proposals before the Application Period is over. Best yet, you will no longer need to race to submit your proposal. As long as you submit before the Voting Period begins, you will have an opportunity to receive funding.
In my opinion, these two changes will ensure only the highest value proposals receive funding each cycle - increasing the benefit that CPS funding provides to the ICON ecosystem.
As always, feedback and suggestions are welcome.