Hyun Oh from Deblock here.
Lately ICON has announced its Yellow Paper offering various benefits for DApps.
I’d like to introduce the incentive system of ICON as it is well reflecting current market circumstances and focusing on developers’ needs.
Yellow Paper: IISS (ICON Incentive Scoring System)
- Rewards on P-rep (a similar concept of BP of EOS, currently accepting pre-registration — I’ll talk about this later),
- Rewards on EEP (Ecosystem Expansion Project),
- Rewards on DApps are described in a very detailed manner.
I’d like to explain the Rewards on DApps simply so that those developing DApps can have a better understanding of the system.
ICON is aiming DPoC(Delegated Proof of Contribution).
The central philosophy of the ICON Network reward distribution is fair compensation based on relative contribution. Each participant can demonstrate their contribution through the ICON Network’s unique contribution evaluation system. In the end, contribution is the most important value shared within the ICON Network, and therefore will be the sole standard in the network. Delegated Proof of Contribution (DPoC), as described herein, is the sole justification for electing representatives.
The expressions may sound new.
The model incentivizes various players with a rational amount of rewards when their actions have positive impacts on the Network, causing the growth of the Network.
Accordingly, the incentive system encourages more of actions benefiting the Network as much as possible.
The system defines the benefiting players in four different ways.
- Representative: Creation and verification of blocks
- DApp: Services utilizing the blockchain platform
- Ecosystem Expansion Project: Online/Offline services supporting the ecosystem without utilizing blockchain technologies
- Holders: Ordinary users supporting and evaluating the other three players by delegating ICX
The incentive system encourages the growth of Network by providing proper rewards to the four groups.
The first and fourth groups may not have much of difference in terms of Network but the second and third groups are targeting developers in the real term.
So, would the “proper rewards” on DApps be meaningful amount?
Take the BP election of EOS last summer. All holders were staking and delegating their EOS to BPs they supported — strong candidates were elected as BPs.
ICON will select Representatives similar to that.
However, it is possible to vote on DApps in ICON.
Users can vote on DApps they like or use the most. Based on the result of this election, each DApps can receive the rewards every month. Having meaningful DApps would be the most influential thing for the Network.
So, with the assumptions as described below, if you calculate the monthly rewards,
- ICX: $0.25
- Expected monthly rewards per 1% of the entire delegated volume of DApps: $4,000
- If a DApp team gets votings from about 5% of the entire participants of the election: $20,000
$20,000 — It is about 20 million KRW for a month.
The figure would be rather high for some and low for others.
Rather than 5%, if a team gets 1%, the rewards are not small at all for individuals.
In other words, such rewards and incentive system benefit both projects with a big scale and family size.
Big projects would be able to develop higher quality DApps to get more votings and this can be a pipeline of funds creating good cash flows until the projects start seeing net profits.
In the conventional mobile market, if a company develops an application and gets Google AdSense to make such amount of profits, it is required to have at least 5 million DAU.
This means you need much higher DAU than that of www.baemin.com.
Such rewards are meant to be enhancing the usability of the platform while establishing an environment where more and more developers are willing to participate.
At the moment, the market has not seen a Killer DApp yet — I believe such generous incentives are based on the hope of having more interesting and attractive DApps on the ICON platform by supporting developers.
In the current Crypto Industry
As the formula that has worked in the mobile and Internet industry, all players are struggling now.
But a new successful formula would come up with relentless challenges and more failures in an unexpected way.
This is why the crypto market would not necessarily favor conventional services.
I believe everyone is still standing on the start line — the new start line.
I think such policies of ICON put developers at top to help them reduce risks by having the right notion on market circumstances.
This is why I support ICON and its announcement of launching the DPoC.
Unexpected services on blockchain that can be applied to the real world do not have to go through ICO.
When the smartphone was first introduced, many people developed applications for just fun and uploaded on the App Store. so many apps including utility apps, simple function apps, advertising apps, and gaming apps have been introduced to the market in the course.
These small fun factors actually made shifts in the market from Web to Mobile First, and from Mobile First to Mobile Only.
There is no equation of success in the crypto market yet.
Policies of many platforms would keep changing and developing.
I firmly believe that this would be one and few moments in life when everyone is on the same start line having a chance to take a full swing.
Deblock wants to hold hands with those preparing projects and ready for the chance.
This article is based on my knowledge obtained from reading the IISS document — the content may have differences from the official position of ICON Foundation.