Let’s debate here the latest IISS and the penalty system.
What are the good things and what are the bad things for such a system in ICON Network?
Should we remove this system of penalties?
Who are the creators of IISS? Let’s hear more from them.
Penalty System
ICON’s penalty system now has a token burning component. There are 3 types of penalties outlined in the IISS paper: Validation Penalty, Low Productivity Penalty, and Disqualification Penalty.
If a P-Rep suffers a Low Productivity Penalty or a Disqualification Penalty, 6% of the delegation toward such a P-Rep will be burned. This makes it extremely important for ICONists to delegate towards reliable and quality P-Reps.
We encourage ICONists to delegate across multiple P-Reps to diversify the risk of having their tokens burned.
Good to have methods to keep accountability and performance high, as well as eliminate bad actors. Harsh penalties but since good p reps should never get close to this, I’m good with it as it should help keep icon safe from bad actors as p reps and encourages diversification.
I think P-Reps should be penalised for bad performance and when they are not providing the minimum requirement of services, which they have been agreed to follow with ICON Network for secure and stable Node!
But, with a clear statement of why and what is the reason for the penalties. For example statement of log note and other files shows no respond and no action have been taken of the issues and problems with their node for a specific timeframe. As I hope the reason will not be internal and the IP address of the penalised P-Rep was blocked or out-listed from anyone who can have access to this approved P-Rep IP list file which the nodes are reading from or the same IP address have been blocked from the other P-Reps.
My point is that all penalties have to be a clear statement and proves provided why any P-Rep have been penalised.
I do not agree to have penalties for the people or investors who would like to join the staking process! This will scare most of them to invest at all!
If anybody who would like to give their ICXs to P-Rep of their choice, and they will be penalised for not their fault, but only that their chosen P-Rep fail to keep their node UP and running properly with the reason they don’t know, then maybe they will not invest at all!
I am wondering who will invest their ICXs if instead of receiving rewards they can loose they ICXs?!
Or maybe this is the aim of these penalties to push the people or investors to go to the well-known ICON Team P-Reps only as a most secure place?!
I agree that the penalty will most probably push a lot of the new investors away. It is very difficult at the moment to find a proper explanation of the penalty system (difference between staking and delegation in example) and I dont think that most new investors will get to that point of “deep research” before deciding to simply put their money somewhere else. Imho if something needs to be explained so thoroughly to an investor in order to get their money, than it is not a very good system.
By trying to have an unbiased look at the “diversifying the p-reps that you delegate to, so you could lose less” statement from an investor’s point of view, I think that it doesnt look right to someone currently not involved in Icon.
It could also push away new p-reps as people will most probably not be very eager to invest in them as its easier for a new p-rep to hit the 85% penalty when they are still new. If that happens, that would reduce the influx of new p-reps and it should hurt Icon’s inovation and progress in the long run.
Hopefully I am wrong about this and this turns out to be an amazing system.
