IISS 3.0 Proposal

Team: block42

Decision: Approved

Comments:
Hey, everyone, I’ve just discussed IISS 3.0 with Scott and here is a quick overlook and the explanation why we approve the general direction of the IISS 3.0 that being said we hope to see small changes or adaptions to the proposal

The bond: We generally approve of the bond but we would like to see that the bond requirement should be eased in over a longer period of time to not completely halt the teams of their progress and maybe introduce a gradual increase over time staring with 1% and increasing each month. Also, the possibility of a % bond with a maximum amount was discussed because of the concern of whales delegating for P-reps to stop them from being able to claim the rewards.

CPF: We were on the same page with CPF. We believe that more rewards should go towards actual contribution than just running a node and there is still quite a good incentive for P-reps to run a node and confirm blocks.
Once it would be implemented if being a P-rep would required a lot of extra work of reviewing grant applications we would like to see the rewards for main P-rep to be increased.

Overall we think this is a step in the right direction, we will continue to monitor all the adaptions that are going to be made to the proposal.

7 Likes

Decision: Reject

While the proposed system does have foreseeable benefits, it’s a pretty radical shift from the decentralized nature of democratic voting, with a lot of additional moving parts that could prove to cause more problems than they solve.

Currently, we have a system where anyone has the ability to prove their worth via contributions and earn votes. ICONists are the one’s who have the ultimate say in what’s best for the ecosystem by delegating, and moving their votes (ICX) to the delegates of their choice, as it should be.

The proposed CPF system, on the other hand leans too much on the side of centralization by essentially moving the majority of rewards, and stripping block production rewards from elected block producers to a centralized fund that will be controlled by a few select entities. The top 22 P-Reps.

I think it’s safe to say, being that ICON Foundation holds majority of votes (17% to be exact). More than 10 times of some of the other P-Reps in the Top 22. They alone will have the majority of sway when it comes to approving or rejecting grants. A very centralized system that incentivizes the formation of “cartels”.

Here are some suggestions for adjustments to gain our approval:

CPF: The contribution proposal fund would be an amazing idea if it were to be implemented as a peripheral project funding system.

For example:

  • All P-Reps in the Top 100 would need to contribute a percentage of their rewards to CPF.

  • Reduce the number going to CPF ~20-30% (depending if you’re s Sub P-Rep, Main P-Rep etc.)

  • Block production rewards need to go to block producers. This is important.

That way we would still have an environment that promotes grants without completely neutering the Top 22’s ability to work on their own proposed initiatives and projects i.e Consensus 2020 which was a decentralized group effort by top P-Reps without any assistance from the foundation.

With a little bit of adjustments, I truly believe we can have the best of both worlds.

4 Likes

Decision: Approve

Comment: We believe that Icon Foundation is fully aware of what they are doing since they created the project and they can see full picture of Icon’s future.

With this proposal we take into account suggestions of many Iconists and p-reps who were asking to find some new solutions for i-scoring. That was one of the main topics this year and now we have very smart solution for it. CPF is also great idea because it vastly expands development. With this improvement many developers who are not main p-reps can now contribute more to the ecosystem.

3 Likes

Team: POS Bakerz

Decision: Approve

Comments:

  • We support this proposal which will bring the ICON blockchain closer to decentralization.
  • We believe that the minimum bond of 6% for P-Reps lowers greatly align the interests of P-Reps and voters, we also like the fact that it lowers the benefit of vote-buying and that P-Reps will not be able to claim their I-Score when the bond requirement is not met. Our view is that this bond requirement should be implemented progressively over a 12 to 18 months time frame.
  • We love the CPF, the way it is finance and the fact that Main P-Reps will have to vote on proposals. This is a unique proposition and strongly brings the network closer to decentralisation.
  • On governance slashing, we appreciate the 3-day window to vote vs. 24 hours, but we think that the 20% slashing penalties are a bit harsh. Maybe an iterative approach would make more sense here. E.g. do we manage to get all P-Reps voting with only a 0.1% penalty? If it is the case, then fine.
  • Stopping additional delegations is important since P-Reps with lower bonds may not want to be over-delegated, and others such as the Foundation are getting too many votes and can’t do anything about it.
  • We agree with the idea that some might want to stay out of governance. Having this possibility will attract some exchanges, which is a plus for ICON. However, we believe that if one chooses to stay out of governance, then he should not get a Main P-Rep status or qualify for Main P-Rep rewards.
7 Likes

Team: ReliantNode

Comments:

We’d like to explore the viability of:

  • Exchange nodes producing blocks for ICON, while opting out of governance
  • B1 rewards awarded to teams participating in governance

We’d done a full breakdown here - https://medium.com/@ReliantNode/reliantnodes-thoughts-on-iiss-3-0-b631ff5ab12a

4 Likes

Team : ICX Comics
Decision : Approve

2 Likes

Decision : Approved

The bond requirements is a great idea to lower the benefit of vote buying. would it be possible to have more information about the timeframes we have in order to put this in place?

Overall, IISS 3.0 will reward real builders and slow down the progress of inactive p-rep.

About CPF allocation, we thought it can be a better idea if the P-REP with « Greater than 1% Delegation » is replaced by « the P-rep with Greater than 2% Delegation ». It would encourage smaller teams to become more involved in ICON.

Governance Slashing is a good point.
Agree with the timeframe to vote for Network Proposals (3 days)

Awaiting feedback on our views about the CPF (1% --> 2%)

2 Likes

Hey @Sharpn, thank you for the response. Let me address your questions below:

Time Frame of Bond Requirement: As it currently stands, ICON’s roadmap can accommodate changes to IISS sometime end of Q3 maybe Q4 2020. Nothing is set in stone, but nothing would change prior to end of Q3 / early Q4. That’s the earliest anything would be changed on-chain.

Also, given lots of the feedback, we are looking into ways to ease in the bond requirement.

Changing from a 1% threshold to a 2% Threshold: I’ll take this opportunity to describe more logic of the 1%. 1% was picked because of the function being used to calculate this. Since we are taking a square root (or any root for that matter) this would raise rewards if it were below 1 and start tapering the marginal increase of rewards once it breaches 1.

If we did 2%, it would create a very weird situation where you would start losing money once you breach 2%. People would actually be upset if they received more than 2% of delegation. In the current system, by keeping the threshold at 1%, you always earn more money as you earn more votes. Any deviation from 1% would create weird situations like this. I took some screenshots to show the effect of your specific suggestion - notice how in the 2% threshold section, you actually lose 10k ICX per month (profits go down by 25%) by going from 2% delegation to 2.25% delegation. Happy to discuss over TG (@benny_options) and walk you through the models if there is still any confusion. Hope this helped!

Current situation with threshold at 1%:


Suggested threshold of 2%:


4 Likes

Some of the reasons why we support the IISS 3.0 changes:

2 Likes

A good discussion regarding IISS 3.0 and Consensus 2020. A lot of good ideas and clarifications. It’s a must watch for entire ICON community.

6 Likes

This proposal has been updated. The google doc at the top will work, but for convenience, here it is again:

Hi Scott thank you for publishing the new draft, I’m going to start reading in but before I would like to ask, just to be clear, this is the final one correct? we dont need to revote, any comment we can just publish it here as a note, or is this still in the draft type of mindset?

Again thank you!

Ubik Capital Decision: Accept

Thank you to the ICON team for carefully considering the feedback given and putting a lot of time and effort into this proposal! (previous feedback is quoted below, for comparison) We support the new changes and corresponding IISS 3.0. As previously stated, we believe the bond, CFP (and contributions from P-Reps), and Governance policies all will positively effect ICON.

We are happy to see our suggestions 1 and 3 were added. These changes protect the network from sybil attacks and also provide significant funding to the CPF for development. Additionally, the changes pull more rewards to the CPF from top teams, but also spread the CPF funding more evenly and encourage teams to seek support through more votes. Lastly the changes ensure anyone who runs multiple nodes contributes to CPF. With these changes, we feel Main P-Reps will still have enough rewards to run a solid node infrastructure, and are okay with block production rewards being removed.

We appreciate the bond requirement being a bit more lenient (going along with #5). Being able to receive rewards without a full bond is sufficient to give time to grow the bond. Also, the 5% is reasonable in our opinion, while still ensuring skin in the game and deterring vote buying.

Clarification:
Regarding #4, we would like to still ensure the bond can be posted by different wallets, and not be specific to any kind of wallet : flexible between ledger, myiconwallet, ICONex, etc. Also, we would like the bond to be able to be voted to any team, and earn rewards.

2 Likes

ESPANICON Decision: Approve

@Benny_Options first of all, thank you for considering all the recommendations given by all the teams and congratulations to the team that worked on this updated version of IISS 3.0, we believe that you did an amazing job.

We agree to all the points there is nothing to debate from our perspective, one subject we would like to discuss that wasn’t discussed in the paper is about the technical details of the bond allocation. Our recommendations on that subject are as follow:

  • Be able to use more than one wallet to place the bond, this will reduce the risk of losing private keys and spread the money in each wallet.
  • Be able to stake and vote for any team in those wallets.
  • We recommend that in order for the bond to be accepted by the network the ICX needs to be staked. This might be an unpopular opinion some teams may not agree with it but we believe it will achieve 2 purposes:
    ** It will bring more stability to the network by having more overall ICX staked
    ** it will incentivize teams staking and voting for sub P-Reps to promote inter-team collaborations
2 Likes

I’d say at this point the only reason we wouldn’t move forward with an on-chain Network Proposal vote to solidify IISS 3.0 would be if there was serious pushback and low probability of approval

2 Likes

Is there an estimate regarding the timeline for development of the proposed changes?

Current estimate is September/October 2020

This looks like the original proposal

Edit: Looks good now, when I first opened it, it had older information on it. Thanks for the time and effort working on this proposal and hearing out the community and preps.

Decision: Approved

Thanks to your team @Benny_Options for updating the proposal.

As mentioned in our conversation, we will still support and Approve the updated proposal. The main reason is that whole governance is the dynamic process and it is subject to be re-evaluated and adjusted at any time. For this reason, we see the new proposal as the first step in the right direction. Once deployed and re-evaluated, we can talk about further adjustments.

Here are the points we would like to mention:

  1. The newly updated proposal significantly slashes the monthly flow of ICX rewards to the CPF (from 1.26 million to 850 000 ICX). We still believe more significance needs to be given to the CPF as the major development instrument. Cutting down the funds is a de-stimulation measure. While it may be good as an initial deployment value, we all hope that general development on the ICON will exceed the initial numbers.

  2. The unused CPF funds (over the CPF limit of 1m ICX) were subject to burn in the previous proposal, meaning a higher probability of the addition inflation reduction. Reduced income means less chance of the token burn and no inflation reduction. In the previous proposal, CPF would reach its 1 million ICX mark in 24 days. In the new system, it will take 35 days to fill the fund. This is a clear example of how a chance for the possible token burns is significantly reduced. No burn - bigger inflation - increased supply - higher sell pressure - lower price.

  3. The dynamic bond change is a good thing, the reward should be dynamic and relate to the % of the accomplished bond. The bond should be submitted on the separate wallet for security reasons and be restaked/revoted.

  4. We don’t mind a general CPF fee for all the P-Reps. However, an exception should be made to try to keep afloat a small community P-Reps. In other words, 10% CPF fee should not be applied for the P-Reps with 0.2% or less delegation.

Midos Decision: Approve

The proposed system successfully counters a lot of the potential issues on the chain. I only have some minor enquiries/suggestions but they are by no means integral and would not affect the Midos decision.

  1. Would there be no bond for sub-preps? The sub preps are more than 3/4 of the overall prep amount and its kinda odd that such a significant part of the preps would have only benefits and absolutely no obligations aside from the one-time registration. Maybe the bond for the sub-preps (sub 1%) could be smaller and tied up to running a node?

  2. I remember you mentioning (not sure if I remember correctly) that in this update the preps that fail to post their bonds would receive a smaller amount of rewards, but I cannot see that anywhere in the proposal text. Have I missed it somehow? Do you mind giving some more info on that part or guiding me to the text where I can find it?

  3. Should there be a grace period before the bond postage penalty takes place so the respective prep has the time to react and increase their bond instead of losing rewards or is the concern that there could be a ‘pinball’-ing abuse of such grace period greater?

  4. Am I correct to assume that there is no slashing for the bond of the preps that have more than 1% delegations as long as they stay outside of the top 22?

  5. There could easily be periods in time, in which the top 22 are mostly consisting of a specific type of teams (marketing, tech etc). In order to slightly remove the bias from the top 22 (as tech oriented teams will be more inclined to fund tech projects, marketing oriented ones - marketing projects etc), do you think that there could be several grant sections set up, each with their separate funding pool (and the option for main preps to add/remove sections if needed)? This should also promote healthy ballance in the types of projects funded as teams would start considering aiming for the unclaimed pools and would have to compete for funding in their own sphere only (also the top 22 would not have to decide whether one sphere is more important than another one)