nebliodev
commented
2 years ago Opening up for public discussion and feedback. The Neblio Team does not take a stance for or against proposals before they are voted on, we simply provide information and guidance from a technical perspective.
Several points, risks, and other technical information around this proposal:
- The tokenomics of Neblio have never been changed in its history, this would be a first.
- This change would require a hard fork and a mandatory upgrade for Neblio Core.
- Even if this NIP passes the governance vote with support of stakers, there is no guarantee everyone will upgrade. Stakers that vote 'No' could refuse to upgrade Neblio Core, causing a fork in the chain and creating 2 blockchains, Neblio & Neblio Classic, for example.
- In the event of a contentious fork like mentioned above, exchanges may or may not support the new chain, the choice would be up to each exchange.
- This would affect every single Neblio staker on the network, cutting the staking rewards they earn in exchange for validating network transactions in half.
- We estimate this change would require a few weeks of development work and testing, plus 1 month to schedule the hard fork and give users enough time to upgrade Neblio Core.
Due to this being an unprecedented change that would affect every single user on the network, we suggest that there be a detailed and lengthy discussion around this NIP, from many participants.
If you support this NIP, do not support it, have questions, or have suggestions to improve it make your voice heard below before the proposal is locked in and a governance vote is scheduled👇
adamkhalil1
ghost
IWantMoreDecred
Proposal Description
The Background
Unlike most other projects, the Neblio development team did not allocate tokens for themselves in the ICO, but bought into it like every other investor at that time. The whole development of the platform is funded solely by the team’s personal money.
Everyone who has been with Neblio over the years knows the team has always thought deeply on how to spend money on the development, marketing or other activities to not only generate the best ROI, but keep running costs low.
Even with these constraints the team was able to build a platform that rivals and even trumps competitors spending tens of millions, not to mention there is already a growing ecosystem of 3rd party developers using Neblio to build their and their client’s projects.
We are entering the phase of real world adoption here but unfortunately, this all is in danger.
The Problem
Even with the restraint shown by the team in spending money, they weren’t able to sustain themselves from the staking rewards of their wallet alone when prices started declining and had to take additional tokens out at an ever increasing rate to cover bills .
In May alone the team had to liquidate Neblio in four transactions totaling about 110.000 tokens (30.000 on the 1st/2nd and 80.000 on the 12th of may).
Even if we assume in the very best case that the amount on the 1st and 2nd of May was for the previous month, this would mean the team at these prices currently needs at least an average of 55.000 tokens monthly to sustain development and cover costs, most likely more than that. With 140.000 Neblios left in the team wallet it also becomes painfully clear how long this can continue if nothing is done to address the situation.
The Solution
To secure ongoing development of the platform, I propose an even 50/50 split of the staking rewards between the people staking and the team. This would lower the staking rewards from 10% to 5% yearly with the other 5% going directly to the team.
To make it clear from the beginning, this would only be a temporary emergency measure to make sure the development team has enough funds to continue and last only until the team is able to build funds up again to previous levels.
When this goal is achieved, the staking rewards should be changed again by a NIP vote, but this time to a ratio of 9% stakers and 1% team, making such a drastic change like the one proposed here unnecessary in the future, even if we encounter similarly harsh market conditions.
Having a reliable stream of 1% staking rewards available especially when the price improves would enable the additional funding of special projects like e.g. the UI overhaul of the Neblio wallet, the creation of specific content for the target audience of business customers/developers as well as retail investors and the financing of a marketing campaign offering onboarding or consulting and services packages (https://nebl.io/services) for free or at a reduced price to all qualifying enterprise customers.
The beautiful thing about this is that the implementation of the voting mechanism by the team last year makes this all possible in the first place. We as a community are now able to decide together and shape the future of this project.
The Percentage
Without knowing exactly how much of the 19M Neblios are being staked, we can at least estimate. The easiest way is to assume that all of the Top 100 wallets stake their tokens and look at the volume they represent. (a quick check seems to verify this assumption with the exception of the 2nd largest wallet).
Adding up all Top 100 Wallets (except the 2nd largest) shows that they represent about 81% of the total supply.
19M total supply of tokens with 80% tokens being staked = 15.2M of all tokens used for staking 15.2M tokens staked at 10% yearly = 1.520.000 tokens as a reward generated yearly 50% of the rewards for the team = 760.000 tokens yearly = 63.000 monthly
Circling back to the problem paragraph above and the assumptions made in it, the 63.000 tokens seem to cover the monthly costs at the current price levels and with these rising allow the team to build up their war chest again until the community decides to implement the permanent change to a different ratio.
Final Words
The solution proposed here is not mine, it is grown out of a discussion on the Neblio telegram channel between multiple community members trying to address the current situation and find the best long-term solution for the benefit of all involved.
The Neblio team is very much part of this community and an important one at that. They have achieved incredible things already with even more exciting developments on the horizon (e.g. NeblioX) and we should make sure they are able to make the platform the best it can be.
Proposal Voting Details
Voting details to be added after the discussion
Other Information
This proposal should not be viewed as set in stone, but as an open invitation for debate to not only hear everyone in the community out, but to find the best possible solution together.