IISS 3.0 Proposal

Governance
#44

ICONast make great points. The system wasn’t designed to make a few at the top rich. I’m also not surprised that your entire contribution to the network for the past 6 months is reducing your I-rep score. IISS 3.0 is attempting to fix some of these issues in my opinion. ICON was designed with contribution in mind to benefit the ENTIRE network. Its absurd to say that the current system should be maintained even though we know that it will fail eventually just so we can allow a few at the top to continue to reap rewards from the system.

Reach out to EOS, Steemit, Ark and all the other platforms which run on the pure dpos model and you will understand how terrible a system it is.

5 Likes
#45

@thelionshire I agree that sounds like a better approach than just completely scrapping a working and stable system for something brand new.

@detoxx Skipping over some of your assumptions about our contributions… Changes can be made in order to better balance things without completely scrapping a stable and proven network. What are some of your opinions on the actual nuts and bolts of this proposal? And what are your concerns that you would like addressed?

One of your stated concerns (along with everyone else’s) is the benefit of the entire network. Would you not say that the network has been benefiting in the past 6 months or so since decentralization? Do you think the current system that is keeping the network stable is hindering rather than helping this growth?

You seem to want all top p-reps to get smaller rewards. The way this is addressed in IISS 3.0 is cutting all p-rep rewards and forcing contribution to the CPF, which may lower creative uses of these funds and gives p-reps less freedom to enact their plans. This is on top of forcing teams to hold a bond of a certain percentage of their total number of votes- which also makes sure p-reps have some “skin in the game”. In my opinion the bond seems like a weird approach. The system already highly incentivizes p-reps to stake and hold as much ICX as possible. If the point of this is to put a cap on the percentage of votes a p-rep can receive, why not just keep it simple and… cap the percentage of votes? The bond requirement has the negative effect of possibly pricing out smaller p-reps if they start to grow and it does nothing to address community concerns about Velic staking/voting with other people’s funds, or with ICON Foundation getting too many votes.

If voter apathy is an issue that we want to address, let’s just try to address that. If ICON or the community thinks p-rep’s are getting too much money and not using it effectively (which this whole discussion seems to point to), let’s address that. Just remember that no one was complaining about this as ICON was shooting up the rankings and there is more going on than you may see. Just because certain p-reps are more vocal than others doesn’t mean their contribution is necessarily having as big an effect. Do we want ICON to grow or do we want to make sure no one else is making more money than we think they should?

We are wide open to making changes in order to better balance things and make sure the system keeps running smoothly. However we think broad sweeping changes are going to scare away a lot of investors who may have been looking at ICON as a place to store and grow some wealth (and therefore grow all of ours).

8 Likes
#46

By minting new coins every day we are currently creating inflation in our ICON Economy, simple as that.

What we need to decide is, how do we want to use that inflation.

We are a very young project with plenty of teams, what we should do is to use these newly minted tokens to inject back into the ecosystem and create projects and solutions that will expand ICON overall.

IISS 2.0 makes it easier for teams backed up by companies to simply create a node, self delegate a lot of tokens and cash out every month without giving back any type of contribution to the ICON Ecosystem overall besides the initial investment of buying the ICX tokens, there is simply no incentive to create meaningful projects that truly helps expand the network, we need to be honest with this, I’m not saying that all the teams are acting like this, but is clear that if you have enough icx and you self delegate those to your node, there is simply no reason to do anything more than that and just keep cashing out.

IISS 3.0 is solving this with the bond and the CPF, maybe the numbers need to be changed a little bit to still allow teams to create projects without the need to apply for the CPF and create bottlenecks of too many teams applying, but the idea behind it surely solves those problems.

@minhx said in the last meeting, this is not a 2 or 3 years project, this is a project with the goal of still being here long before we are all gone (hopefully), so the main goal is to expand the ICON Ecosystem.

3 Likes
#47

First, I think buying a large amount of icx is a great contribution. I also think those who buy a lot of icx will have a vested interest in the project to succeed, and want to grow it. I think self staking is more of a problem with exchanges who stake others tokens and don’t contribute to the project. The changes in IISS 3.0 allow this as well- they just incentivize exchanges to not govern by making more money as sub p-reps. 3.0 as it stands just incentivizes a large node to split and settle as multiple nodes at 1% to gain maximum rewards and require no contribution to the ecosystem. Then those who are earning votes have less flexibility and are the ones being taxed for the CPF, while the self staked nodes are 1% (which can also be exchanges who have not contributed in buying) earn full rewards. I’d guess that those who bought a lot of icx and self stake might want to have a say in the governance of the project they invested in - but this makes them choose between earning more + doing less work by splitting to multiple passive sub p rep nodes and running a large node, having a say in governance but earning less.

The growth in the nodes that split will likely force out smaller sub p-reps. I didn’t see this as healthy competition if large exchanges take over 50 of the sub p rep spots with other people’s tokens, and don’t do anything to contribute to the ecosystem

3 Likes
#48

First, I think buying a large amount of icx is a great contribution. I also think those who buy a lot of icx will have a vested interest in the project to succeed and want to grow it.

Surely they would and should have a vested interest in the project to succeed but there is no incentive on using the rewards to create projects that expand the Ecosystem.

This is something that we can clearly see right now, besides your team and a handful of others how many teams not only in the top 22 but top 50 are currently working on projects for the growth of the Ecosystem and how many are getting rewards for simply running a node?

We are all here and in the channels and we all know which teams are working and which teams are not.

And again, if the goal of a company is to create a node self delegate and earn 18% as voter plus 14% as P-Rep, that’s OK, but I think that our goal should be to improve the Ecosystem, protect the teams that are creating meaningful contributions and to make it easier for the teams that are actually creating projects to keep working and have enough funds.

I completely agree with this, there is a big chance that an exchange or a company would simply create 20 sub P-rep nodes and push away other teams or make it difficult for new teams to rise in the ranks.

3 Likes
#49

Agree that this should be the goal and I think the IISS 3.0 has the right idea and the ICON team did excellent work in coming up with the analysis and suggestions. However, in my opinion the specifics are too abrupt to take on all at once, and also the numbers and distributions are too extreme for what I believe to be a healthy ecosystem. I understand many might disagree with the suggestions I have made, but those are ones that I believe should be considered and required for Ubik Capital to approve.

6 Likes
#50

I honestly didn’t realize it until you first pointed it out in your first comment, but you are right, the numbers should be re analyzed and reconsider because the impact on the main P-Reps is indeed quite large.

I first voted as request more info because there are also things that I believe should be modified in order to improve, but generally this seems like an improvement on IISS 2.0 at least to me.

3 Likes
#51

Decision: Reject

Bond Requirement: We think a bond requirement is a good idea, but the 6% figure is too high. At the current ICX price, some P-Reps need to offload a significant amount of earnings to continue their projects. Like @Tomas.Blockmove stated earlier, there are some security implications for this as well. Perhaps the 6% figure can be revisited.

Contribution Proposal Fund: Reject for two reasons. Having P-Reps review and keep up with proposals is not scalable over the long term, especially if grant activity picks up. According to Bong, the current rate is about 5 grants per month. Presumably, that number will scale up over time, and I’m not confident that P-Reps will be interested in spending a lot of time on reviewing grant proposals. If governance slashing comes into play, I can see a groupthink situation where teams simply vote “yes” or “no” depending on the community bias for a specific proposal.

Furthermore, we believe routing proposals through CPF effectively centralizes the process as ICON and ICON-affiliated teams control a significant amount of delegation at the moment. The current grant process is more decentralized and flexible by design. Someone with a proposal can approach teams directly to pitch their idea and get funding. We’ve already seen this work for multiple projects.

Secondly, we do not agree with block production rewards going to the CPF. Block production rewards are rewards for block production. Since main P-Reps have to produce blocks for the network, we do not agree with any percentage of the block production reward going to CPF. This model encourages block producers to minimize infrastructure specs because there is no extra reward for not doing so.

Stop Delegation: We are in support of this and hope teams such as the ICON Foundation utilize it to improve vote distribution. This will also allow teams to exercise greater financial stability (e.g. not having to constantly increase their bond as more delegations are received).

Governance Slashing: We are in support of governance slashing. The primary duties of a main P-Rep are to engage in block production and also governance. If teams are unwilling to participate in governance, there should be a monetary burden to deter passive governance. However, 20% of a team’s bond is quite high, and we would like to see this figure lower at the first offense and upscale as certain behaviors are repeated.

11 Likes
#52

InterBlockTech
Reject

Reason 1. CPF pulls funds from p reps building their own project. P reps should be encouraged to assist and partner with other P-Reps. We need to find a way to give P-reps incentive to voluntarily work together on projects. But we also believe each P-Rep team should have 100% control over who they decide to work with and help finance.
Reason 2.
The bond issue is a great. However, it needs adjustments to help with volatile changes in votes and new p reps. My suggestion is use a lagging qualification for the bond requirement. We would support the bond to not be due until one month after rewards are received.
The other option is to make the bond requirement a 3 to 6 month rolling average. That way the bond requirement would not be so volatile, and would give reps a chance to ease in to their requirement.
We agree with the thought behind the change, but believe changes are needed before making an official IISS adjustment.

2 Likes
#53

Request for more information

Governance Slashing

  1. The governance slashing is proposed from the bond amount. Not having the bond amount by any team just prevents the team from claiming I-Score(or let me know if there are any other). What would happen if some P-Reps get slashing but have no bond?

  2. As we have seen with current mechanism for slashing, it is hardly possible to get slashing for any P-Rep and its voters by going below 85% productivity. With the proposed governance slashing, the proposed penalties will hardly affect any P-Rep if they apply scripts to avoid the penalty. So how does the penalties try to avoid the negligence of P-Reps? As the P-Reps are expected to act accordingly with these penalties to avoid slashing, they can simply do basic tasks just to avoid slashing.

#54

ICONation

Decision : Approve

Comments : Sorry for the delay in our vote. While we do approve of the proposal in general, there are a few areas we’d love to see some iteration, especially after reading some of the great feedback from the other teams. Overall, we support the direction, understand the reason for the changes, and are looking forward to continued discussions that could lead to some adjustments prior to implementation.

8 Likes
#55

Team Name: DSNC

Decision: “Request for more information”

Comments:

Regarding “Bond Requirement” - Could you please specify more in details what exactly is this 6% bond requirement? Is this 6% that should be our (P-Rep) self-voting/investing own ICXs from the total of the delegation of the votes we received? Also, where we (P-Reps) should “posting the full 6% bond”? Do we only need to show how many are our own ICXs as a stake we are holding? It is not clear where we need to keep or send this 6% bond requirement fund.

Regarding “Contribution Proposal Fund” – It is a very interesting proposal, which will cut one of the main benefits and the purpose to be the Main P-Rep, as it will remove the block production reward (B1) from all Main P-Reps and allocate those funds to CPF.

  • Does all block production reward (B1) will be cut from Main P-Reps and allocated to CFP or just a percentage of all B1 received?
  • Does this proposal encourage one entity to have multiple Sub P-Reps?
2 Likes
#56

Decision: Approve

Comments:

if the foundation thinks this will improve DPoC, I am all for it.

some argue this complicate things - and yes we want things to be simple (that is, contribute to the project = get rewards). but sometimes getting there requires tweaking the system.

some say buying ICX is already a contribution and could be “skin in the game”. I have to respectfully disagree. some just buy in a bull market and then sell it later. i believe we want long term builders who will be loyal to this project to the end. sounds unreasonable, but that’s the behavior we should reward because that’s how we win. havent we learned enough from the ICO mania?

rewarding “contributions” is a difficult task as most dapp projects are a shot in the dark - we won’t know what the world needs until the world truly needs it. we will get there through repeated trial and error (or “tinkering” as Nassim Taleb puts it) - this is why DPoC is superior to DPoS (where the whales just park their money and dont do anything)

DPoC is hyper-evolution

-marvi(ICON4Education)

8 Likes
#57

APPROVE

weBloc Asia is supporting the IISS 3.0 Proposal in general except the quite heavy “6% of delegation received” minimum bond requirement. In order to meet the requirement, the team would need to run the node without claiming I-rep incentives more than several months. For a team concentrating all resources into dApp service development, the 6% figure would be quite a burden. I’d love to suggest mitigation on the minimum bond requirements.

But we do agree with the direction and the goal of the suggestions stipulated on the IISS 3.0 - creating healthy and strong ecosystem with various tools such as CFP initiative.

9 Likes
#58

The IIS 3.0 proposal comes with some good ideas. As we mentioned in the call we would like to add the following:

  • Identities that don’t run a node shouldn’t earn rewards. The solution we suggested: set identities that don’t run a node as inactive if the node isn’t up for a certain period of time (x days). These identities can be set again as active with a certain transaction. If one identity goes inactive multiple times, after a certain number of cases (y times) they should get a slash. Monitoring of the P-Reps can be made by using the latest block height of every node.

  • Exchanges can potentially harm the definition of Delegated Proof of Contribution. If they only participate for rewards, we don’t see their added contribution. Even worse, if users won’t have the tokens locked, they do not respect the rules every other P-Rep has.

8 Likes
#59

Team: ICON DAO

Decision: Approve

Comments: Our team supports the bond requirement proposal and the possible ‘filtering’ it may cause for P-Reps looking to receive benefits from the network but aren’t committed to being active participants. We are fine with the 6% but also flexible if other teams believe it is too high. Our team is also in support of the CPF. We see the potential of it being a collaborative effort amongst P-Reps.

Overall, while we believe in the current IISS model, there is always room for improvement and we welcome the opportunity to try new approaches if the aim is the betterment of our network.

8 Likes
#60

Decision : Approve

I like the overall changes and the push to mitigate exchanges and non active p reps to involved in governance. I do feel there was some very good points that were brought up by some of the P reps that should be taken into consideration. But over all it’s a good move and not to say there’s not room for more improvement after the next implementation gets agreed upon.

6 Likes
#61

@DSNC I can answer your questions:

Bond Requirement: The details are not yet decided. All this means is that you need to prove to the network that you hold ICX equal to 6% of your delegation. If you have 100k ICX delegated to you, you would need to stake 6k ICX in order to claim i-score. There would be no requirement of who to delegate toward. The plan would be to allow this to be done from a cold-storage wallet - it must be safe and secure.

CPF: As it is currently written, 100% of B1 goes to the CPF.

For your question about one entity having multiple sub p-reps: right now, in IISS 2.0 (the current incentive design), B1 incentivizes teams to have multiple main p-reps. Self-delegated teams should be running multiple main p-reps in order to maximize ROI. Right now I assume they don’t do this for altruistic reasons, but this is not something we should rely on in the long term to keep the network safe. In IISS 3.0, it shifts this incentive to have multiple sub p-reps. Neither are optimal, but multiple sub p-reps is far safer for the network than multiple main p-reps. There should be a cost associated with taking over multiple main p-reps - IISS 2.0 rewards this behavior, while IISS 3.0 punishes this behavior through opportunity cost.

2 Likes
#62

Thanks a lot for answering my questions Scott.

I left with the impression before that officially there is an option which allows one entity to run multiple sub p-reps!
I hope we still do not allow this kind of behaviour or encourage some main P-Reps to move out from mail p-rep and have the option to run multiply sub p-reps as a better option for their investment!?

1 Like
#63

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