ICON Network Public Representative (“P-Rep”) Governance

Hello, this is Bong from ICON Team. The ICON Network is continuously evolving with new features implemented. This article is written to inform you about the upcoming Public Representative election and the decentralized community growing within the ICON Network.

1. P-Rep Election Campaign is on-going

The ICON Network is planning for Public Representative (“P-Rep”) election, a significant milestone happening on upcoming September. As a representative of the ICON Network, a P-Rep produces and verifies the blocks of the ICON Network and makes decisions on the network governance. The P-Reps are elected by the ICON community members and ICON network users, so called “ICONists” through delegation.

Holding a certain amount of stake of the ICON Network, ICONists aspire for the growth of the network. Electing qualified representatives is a crucial factor for the long-term growth of the network as well as the community; P-Rep election is the most meaningful and important event. Thus, all ICONists are anticipating their future representative, which in other words, this is a great time for the P-Rep candidate to gain attention from the community. Any individual or team can join as a group and apply for a P-Rep. The registration process is simple — Visit icon.community website and submit the profile and proposal. (icon.community: https://icon.community/iconsensus/)

The ICON team is constructing a secure and stable system where P-Reps will operate upon. The ICON P-Rep TestNet is already opened, running by 20+ teams. The IISS feature will be launched in August 2019. Staking will also be available on August during the “Pre-voting” season for on-chain registration and vote counting. Exciting moments are coming soon!

2. What is a Public Representative?

The P-Reps are elected delegations by the stakeholders of the ICON Network and they are responsible for block production & verification. The ICON Network follows the principle of DPoC (Delegated Proof of Contribution); Network stake is distributed based on the contribution level measured by IISS and the P-Reps are elected accordingly. The elected P-Reps will be delegated the privilege to operate the ICON Network and to determine the key decisions about the governance.

The genesis P-Reps will be composed of 22 Main P-Reps, and the other 78 Sub P-Reps who will standby and backup for the Main P-Reps. The 100 P-Reps will ensure the stability and non-disruptive environment of the ICON Network.

The responsibilities of a P-Rep not only include block production & verification on the ICON Network but also include the building of backbone and ecosystem of the network by submitting the governance variables; ‘Governance Variable’, which determines the monetary policy and system and ‘Network Proposal’, decides the on-chain network features.

In order to successfully perform as a P-Rep, professional knowledge and in-depth understanding of the blockchain infrastructure are essential. Each P-Rep needs to operate the network protects from unforeseen hacking and obstacles, and decides the ICON Network governance such as the monetary reward policy, network update, and network governance variable. By contributing to both computing power and expansion of the ecosystem, the P-Reps will be the essential member for the growth of ICON Network.

3. Representative Governance and Incentive

The ICON Network is an early-stage community on decentralized protocol constructed by the supporters of ICON based on their self-interests. The community needs a governance system that reconciles different interests among the community members. In order to fulfill such demand, the ICON Network supports diverse on-chain & off-chain features that enable the ICONists and P-Reps to communicate effectively for reasonable consensus. This is a new approach to solving the problems of a centralized community as well as a powerful technical tool for discussing various issues within the community in a transparent manner.

The On-chain Governance of the ICON Network is the system that allows ICONists to participate in decision making of the governance variables and network proposals. This has a significant meaning in that ICONists can bring momentous changes to the network and ecosystem.

Until now, ICONists could only participate in network governance indirectly by delegating their stakes to an eligible P-Rep who can represent their voice. Thus, precise evaluation of the P-Rep candidates is a crucial step for the current system. A system that allows ICONists to directly engage in governance will be developed in the near future. For more information on the delegation incentives and rewards, please refer to the following link. (https://m.icon.foundation/download/Introduction_for_Public_Representative_of_ICON_Network_EN_V1.0.pdf)

1) Governance Variable Submission

A governance variable is a parameter that decides the amount of reward based on the level of contribution measured by IISS. Each P-Rep can submit a governance variable called “i_rep”. The final value of the “i_rep” is calculated as the stake-weighted average of the submission of the top-ranked 22 Main P-Reps based on the amount of delegation.

Basically, i_rep is the representative reward. P-Reps need to submit the ICX amount they think that the top 22 Main P-Reps and the other 78 Sub P-Reps deserve to receive. Each P-Rep should take the Operation Cost (node software, human resources) and Profit Rate into account and submit an i_rep variable so that the profit is greater than the cost involved. The i_rep variable is updated on a daily basis and such fluctuation is limited to within 20% of the value submitted in the previous cycle. The i_rep value itself also has a certain range so that an extreme value cannot be submitted.

The i_rep variable determines the representative reward as well as the reward amount for other network participants such as Ecosystem Expansion Project (EEP), DApp Booster Program (DBP), which are allocated from the Public Treasury. i_eep, i_dapp values are dependent on the i_rep value so it is directly affected by the submission of the P-Reps. Having said that, the P-Reps are required to be cautious when changing the i_rep value. If the i_rep variable is set extremely high, the value of i_eep and i_dapp will also increase, which may lead to ICX inflation. Similarly, if the i_rep variable is set too low, the number of rewards in the Public Treasury will decrease and the community contributors will face deficits.

2) Network Proposal Submission

A Network Proposal is on-chain governance where P-Reps can submit various proposals and discuss various topics about the network. There are four different types of Network Proposals that greatly affect the system; ‘Malicious SCORE Proposal’, ‘P-Rep Disqualification Proposal’, ‘Step Price Proposal’ and ‘Text Proposal’.

Throughout the history of the public blockchain, we have learned how malicious smart contracts negatively influence the protocol. The P-Reps can keep the network safe from such phenomenon by submitting a ‘Malicious SCORE Proposal’ that can freeze the SCORE (Smart Contract on Reliable Environment) to prevent improper implementation or adverse effect to the network. Each SCORE can be frozen up to three days.

The ‘P-Rep Disqualification Proposal’ is a decision-making process that can be used to dismiss inappropriate representatives in the network. This is a powerful tool that allows P-Reps to penalize disqualified representatives who are hard to be identified.

The ‘Step Price Proposal’ is a decision-making process that can be used to determine the Step Price of ICON Network. Step is the metric to measure a single unit of transaction fees on the ICON Network. Each transaction on the ICON Network will cost a certain amount of Step. P-Rep can make a proposal to determine the price of the step.

Lastly, the ‘Text Proposal’ is designed to derive consensus among P-Reps over the ambiguous topics on-chain. Such topics may include software upgrade or adjusting different opinions about representatives.

These network proposals will be executed only when 1) a certain number of representatives agrees on, and 2) a certain number of ICX is staked to agree on. Further information will be released through IISS Yellow paper 2.0.

4. The new horizon of the ICON Community

In upcoming September, the ICON Network will face a brand new era. The P-Reps, the core of the network, will be elected and start producing & verifying the blocks, and several on-chain governances will finally begin to operate.

At the same time, the IISS-based incentive system will start to measure the contribution of the community and rewards will be distributed accordingly. All the active transactions will take place on the completely decentralized protocol, and the ICON Network will be truly run by the community.

The ICON Network is the autonomous community that connects multiple networks over the decentralized protocol.

Please join us together in our first step, starting from the on-chain Pre-voting upcoming August.