UBIK Capital is a team of dedicated ICONists working to be a voice for the community, further ICON ecosystem development, and increase the value of the ICON network. Our strategy is to increase value through technical contributions, community and business outreach, and also a focus on proper Governance. This article outlines five areas that we are considering to enhance ICON through Governance. We present these draft ideas in order to facilitate conversation and solicit feedback. We believe all ICONists should have the avenue to let their voice be heard. As such, we will create a forum topic for each of these proposals, carefully consider the feedback with regard to each topic, and then determine the best way to move forward.
1. Long-term staking incentives
We strongly believe that the price of ICX matters, both in the short and long-term. Higher price draws more positive attention, attracts more people (developers, users, investors, etc.), and enables P-Reps to do more with less ICX (e.g. at $2 ICX value, you can accomplish the same monetary efforts with only 10% of the ICX required than at $0.20 ICX value).
We are working hard on ways to help restore investor confidence, while also building for the long-term with technical development, community engagement, and content creation/marketing. In traditional finance, it is common to incentivize investments for longer periods of time and we believe ICON should offer this as well. Long-term incentives will help to stabilize both ICON price and network (more ICX staked = less ICX on exchanges to sell).
The support for this idea continues to grow, and we thank everyone who has shown support for this concept. Long-term rewards will be most beneficial if applied to all ICONists. To do this, we need to work with all P-Reps and ICONists to add long-term staking incentives to IISS at the protocol level.
The incentives we have in mind to IISS would be along the lines of a growing reward % as ICX is staked for longer periods of time. An example distribution could be as follows (based on 15% rewards). This rate would be based on staking time, allowing moving votes from a P-Rep team to another without penalty.
Less than 1 Month = 0.5 * reward rate (7.5%)
1–2 Months = 0.75 * reward rate (11.25%)
3–4 Months = 0.9 * reward rate (13.5%)
5 Months = 1 * reward rate (15 %)
6 Months = 1.1 * reward rate (16.5%)
7–8 Months = 1.25 * reward rate (18.75%)
9–10 Months = 1.4 * reward rate (21.0 %)
11+ Months = 1.5 * reward rate (22.5%)
Current staking annual rewards are roughly 20%. The system needs to be variable to encompass a growing reward for long-term staking, but still work within the intent of the current IISS system, which sets rewards based on the amount of ICX staked on the entire network.
We believe adding a mechanism for increasing rewards over time, at the expense of lower up-front rewards, will result in higher stability and price growth for ICON.
We have opened a topic on ICON Forum where every ICONist can share their feedback and ideas on this topic: https://forum.icon.community/t/rewarding-loyalty-longer-staking/48/6
We look forward to your feedback. After feedback and discussion, if there is enough support then the next step would be to put forth a proposal on the topic, for voting by the P-Reps. If this proposal passes, then it would open the door to start the development and implementation of the long term staking system.
2. Anti vote-buying
ICON Network differs from a Proof of Stake Network in that it aims to reward contribution, appropriately named “Proof of Contribution.” In order to receive rewards, ICONist performs proper due diligence and vote for productive P-Reps and P-Reps then fulfill their duties in running nodes and contributing to the ICON ecosystem.
In the real world, vote-buying happens when a political party or candidate in an upcoming election tries to purchase a voter’s vote. Vote buying can take different forms, such as monetary exchange, as well as an exchange for goods or services that are required. Vote buying is illegal in many countries and is punished by law.
P-Rep should convince ICONists to vote for them using their proposals, their contribution to ICON Network, their community involvement, their team make-up, and their value proposition and plans to grow the ICON Network.
At this moment in time, there is no formal vote-buying definition or any system of punishment for vote-buying in any ICON documentation.
We would like to further discuss and hope to come to an agreement regarding appropriate definitions and scope for vote-buying, and then discuss ways we can prevent it in the ICON Network. We have opened a topic on ICON Forum where every ICONist, P-Rep can share their ideas: https://forum.icon.community/t/anti-vote-buying/196
3. Increase the number of block producing P-Reps
The current structure of the ICON Network relies on 22 P-Reps to validate transactions and produce blocks. While this is a good starting point, we believe a higher number of block producers enhances the resiliency and decentralization of the network. Our proposal is to increase this number over time in order to increase the security and stability of the network.
The current structure appoints P-Reps outside the top 22 as “Sub P-Reps.” There are many good teams outside of the top 22 who we believe can and should contribute to block production. Block producers receive a higher amount of ICX rewards and many of the Sub P-Rep teams are contributing to the development of ICON Network and are not receiving enough rewards for their future development. If we can expand the number of Main P-Reps, we can enhance the security and stability of the network, as well as provide rewards across a greater number of P-Rep teams.
We have opened a topic on ICON Forum where every ICONist can share their ideas and discuss this topic: https://forum.icon.community/t/increase-over-time-the-number-of-p-reps/58
4. Addition of a 3-month report requirement for P-Reps
On Aug 26, 2019, ICON Foundation Published Version 1.0 of Contribution Proposal System Paper. This paper outlines the goals and intent of the ICON Network, and explains what Proof of Contribution means, and why it is important for the success of the network.
Proof of Stake is used in many networks with the intent to reward the supporters of the network and to secure the network.
Proof of Contribution expands upon Proof of Stake in order to reward everyone who contributes to the network, by providing rewards based on contribution.
P-Reps are responsible to run a node, but also are expected to go beyond and contribute to the network. It is important for P-Reps to state their plans for contribution and also follow-up with status on their contributions so that ICONists can quickly get a status of the state of each P-Rep. We don’t want to turn this into a bureaucratic status drill, but feel it is important to provide regular updates. As such, we propose a 3-month report requirement for each P-Rep, to ensure the information for ICONists is up to date, and not stale.
Our proposal idea is for a brief standardized 3-month report that gives a proper overview of the status of each P-Rep team. We think that 3-month is enough time for every P-Rep to show a strong contribution to ICON space but at distant enough intervals to not get in the way of regular production.
We have opened a topic on ICON Forum where every ICONist can share their ideas: https://forum.icon.community/t/addition-of-a-3-month-report-requirement-for-p-reps/197
5. Addition of a requirement for all P-Reps to run nodes, and process for removal of P-Reps who do not run nodes
To secure properly the ICON Network all the P-Reps should run a node (not just Main P-Reps). ICON Network is built in such a way if that all 22 P-Reps are down then the next 22 Sub P-Reps can replace the P-Reps and run and secure the ICON Network properly. Additionally, Sub P-Reps run citizen nodes, which provide a copy of the ledger and enhance the decentralization and availability of the network. As a minimum contribution, all P-Reps should have their node properly configured and running. Since Sub P-Reps receive fewer rewards, we would expect their nodes to be scaled down into configurations that can run on a $50-$100 estimated monthly cost.
Our proposal is to add a node uptime indicator to the tracker for all the P-Reps and Sub P-Reps. All the P-Reps and Sub P-Reps will be expected to maintain an uptime of 85% for their node, with an initial grace period to get their node up and running. If, after the grace period, a P-Rep does not comply with the 85% uptime requirement, then the P-Rep will be automatically removed from ICON Network.
We would like to further discuss this topic with the community. We have opened a topic on ICON Forum where every ICONist can share their ideas: https://forum.icon.community/t/addition-of-a-requirement-for-all-p-reps-to-run-nodes-and-process-for-removal-of-p-reps-who-do-not-run-nodes/198