Yes, that way large owners would have a bigger impact. I am not sure if it is a problem.
In a PoS tokenomics bigger players take majority of the risks and if small holders vote them out easily in decisions that impact them the most, then they will just not take risk anymore and dump their stack, causing damage.
What we face is a massive economic game and democracy is not an option. Democracy is great for a government, but its not a coincidence that huge companies have a board of directors instead of a poll of employees and company owners have the most impact on strategic decisions.
Your idea is not really possible and I think it would be much more complicated.
1 node = 1 vote is simple to implement, easy to understand, impossible to fake and makes a great utility for PRV holders.
I think a combination of raising the fee and introducing auction system for prv “gas” so that people can pay for priority listing
Although the argument was made about other networks having a small amount of revenue from fees, this revenue is actually an important part of the security and sustainability budget for the blockchain.
Fees for the Eth network (and btc) are much higher than what you propose, so if fees were increased and people could have a choice of speed, this would do a lot.
I haven’t seen the team chime in more on this, but I hope to see them evolve the token economics so that it is not only dependent on market demand/speculation.
These suggestions were not meant to be the answer. My intention was to discuss other possibilities.
This is true although in the same right if the little guys are pushed out with lack of incentives the network becomes more centralized by the larger node holders which is not a good answer to me.
Maybe it’s possible to write into the contract that these scenarios I listed above cannot be voted on(in the same way that no one can access Uniswap’s contract). So as you said 1 node will equal 1 vote and that one node will always earn on avg the same as any other node in the network. As a result these 2 characteristics cannot be changed through a vote.
We are free to start the conversation and they will join. The founder team has worked a lot in the last 2 years to build what we use today, but the future is already depends on us too, as we are here at the foundation of this community.
Auction system is cool, but I think it has less relevance when the fees are really low all times.
Its a fascinating mission to finetune PRV tokenomics. We need to collaborate on this before its too late.
Yes thats the other side of the coin. We need them as the majority provides true decentralization to the network.
One reason for them to leave the network would be if running one vNode isnt profitable while farmers still turn a profit with dozens of nodes.
Incognito was designed to counter this with low staking cap (1750) and I believe running 1 node is no different in terms of return than running 10 nodes in the long-term.
Ah i understand now what you meant with 5 nodes etc. I strongly agree, we should not be able to vote on things like that. The DAO will be mostly about ecosystem developments, not changing the underlying protocol.
Yes, this is applicable. Besides, it will encourage dapp developers to implement their ideas on Incognito ecosystem, which will lead Incognito to the fast-growing number of transactions.
On the other hand, imho to create profit for the node owners, we should focus on the number of transactions instead of the transaction fees. In fact, this (low fees) was the one of the main advantages of what the blockchain technology promises to us. We should think as if Incognito will succeed in the mass adoption (in its context). This means that Incognito will have many dapps (huge number of transactions). Besides, many dapps will create their own tokens and the developers ( like me ) of some of them will want PRV-free transactions. To be able to do that, they have to lock at least 10k PRV for their tokens’ pairs in pDEX.
As you said, Incognito is a ecosystem and we should try to grow it. For example, Incognito had a campaign with Autonomous. Similarly, PRV can be a payment coin in the privacy-requiring sectors. Maybe you know that there are some entities like Unstoppabledomains which try to realize the decentralized web. The main users of such entities will be the people who want themselves to hide from prying-eyes of autocrats which are troubles of our age. As a side note, in my opinion, this was one of the main goals of Telegram’s chain.
In the end, I have a rough calculation, too Let x be the cost of operating my node. I set PRV to $0.40 (very conservative price considering the current price ~$0.60). My monthly gross revenue is 15x but I assume 10x by a conservative approach. Assuming the price will not decrease below $0.40, to reach the break-even point, the number of nodes should be at least 15,000. To reach this number of the nodes, the node owners (except beacon nodes) must stake 26,250,000 PRV (~25% of total supply). The circulating supply will be ~34million PRV (including the premined amount) up to the end of 2023. So at least ~77% of the circulating supply will be locked. This hypothetical environment is valid even if a decent use case does not exist. So, I do not foresee an important risk for the node owners within the near future. Furthermore, I have economics psychology in my hand. To my observation/research, the people (especially ones with some technical knowledge) in the crypto use their spare funds (which are not required to meet the basic needs) in such investments. That’s why I do not expect strong sell pressure within the near future. So we have enough time to grow our ecosystem without increasing the transaction fees.
I am still soaking everything up about Incognito and learning. Happy to hear that the DAO will be focused on ecosystem developments and not the protocol. I probably could have clarified my thoughts more clearly.
In your model, with $0.4 price and mass adoption, the network needs 50,000,000,000,000 transactions / month and its still not profitable.
100% unrealistic. With even 10 billion users, everyone needs to do 5000 transactions / month or the network collapses.
I think your hypotethical environment is not valid:
The price of PRV will be much higher probably.
Problem is not with this stage, but when PRV compensations are no longer exist or very low. (A 3 years period is not long-term in investments)
My point is: Node operators will stop staking once it turns unprofitable and they could destroy the network overnight. One big sell rally and all you have built for decades could be gone.
Plus: I personally make my transactions in the banking world for free or very cheap atm. This is clearly not a feature we should compete with. Decentralized systems have usually higher maintenance costs than centralized services. What we need to focus on is trust. If people could trust Incognito that it will be a thing even after 100 years, then they will use it. Otherwise it remains a speculative asset. Bitcoin has the value because people strongly believe it will exist in the space era too. Your local bank will probably go bankrupt twice until that point.
I like the idea of burning some of the supply. The amount burned per transaction could go down over time like the % of PRV of a block designated to the DAO goes down over time. Once it hits 40 years the burn rate could either disappear or be set to a sustainable rate voted on by the community DAO.
I’ve heard burning coins can define the coin as a security in certain jurisdictions–not sure if this would be an issue or not.
Currently this discussion stucked with the lack of core team responses.
It seems like most of them don’t see the point of stronger tokenomics. They believe if they focus on the product only, everything will work out naturally.
I understand their point of view, still raising awereness of the currently weak long-term economic model of Incognito is important.
I don’t think any complex math model would be necessary to see the extensive need for higher transaction fees.
One could easily pick a mature cryptocurrency and check how much transactions it has per month, then multiply that with current Incognito fees and you will still get nothing, which means current rate of fees are just illusions. Don’t have any real purpose.
Next you could examine how other privacy coins with high inflation loosing value over the years (zcash, monero)
And finally you could realize we have a network secured by staking. Staking provided by investors. Investors pull out if loosing or not earning money: the network will remain vulnerable without further incentives to strengthen the utility of PRV
Proof of Stake is highly experimental. No one knows if it will even work. Ethereum 2.0 is not delayed so much because Vitalik is a lazy ruler, but because the reality of sharded PoS is a gamble.
hey @davoice321,
To be honest I hoped you would find time to join the monthly call with prv holders. It was the best place with for such a discussion, as there were devs who work on consensus model, chain layer, app layer.
I saw that you tagged me several times, saying that I am working on the model right now. To be clear and so we do not confuse anyone, I said let’s play with the numbers to find the best TX model. Quote is here:
Sorry for any confusion. I didn’t mean to imply that I would put aside several weeks to fully research this topic, and commit to finding a model that would see increased tx fees. I have quite high target for this month in terms of growing Incognito DEX, and I would really rather not fail to deliver it. Note: this is not to say that there aren’t other people on the team who have been working on this for months already.
Anyone is welcome to conduct their own research and build their own model.
I also mentioned several times that, personally I do not have problems with making improvements on any aspect of Incognito. I would even say that continuous improvements is must. I think you will find that the entire core team feels similarly.
The only thing I have a strong position on is that all changes on the chain level have to be researched carefully and shouldn’t be based on individual assumptions, or a kneejerk response influenced by the loudest voices.
