Nimiq Supply Curve AMA

Hello @Rob thank you for your thoughtful questions.

If voting will be held, what would be the window to ensure the majority has had time to give their vote?

We plan 10 days per round of votes. That way we keep the process moving but give it enough time for people to make up their mind. Also we would like top work towards releasing the much awaited staking calculator which becomes meaningful only after a curve decision has been made.

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Hello!

I’d like to ask one simple question. How many NIM should be staked to earn reward optimally? Thank you. :slightly_smiling_face:

Hi, @Rob. Appreciate the questions.

Has team nimiq decided how a voting should be held to be fair and minimize manipulation?

To make it fair, and give the decision to the community, we decided to not allow the participation of Nimiq Foundation and Nimiq’s ImpactX Charity in the voting. The plan is for coinholders to vote with their balance (1 NIM = 1 vote) based on a snapshot of the blockchain at the beginning of the voting period.

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Yeah, a great! Thank you

Summary

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The age of the accounts voting won’t be factored in? How do we prevent a new group of whales from using newly-purchased bags and swaying the vote?

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Hi WyoAndy! Thanks for your question, even if it’s a bit out of scope for this supply curve AMA :wink: But to answer it quickly and give you some resources you can check, you can have a look at our “Strategy 2020” blog post (https://www.nimiq.com/blog/nimiq-2020/) or watch this interview about what my business development plans are for 2020 (https://www.youtube.com/watch?v=VApbXorN40w&t=7s) We are also working on some other ideas and potential partnerhips which we will publish as they get to a more concrete state! Stay tuned! :nerd_face:

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Hi again,

Regarding the question Should voting be on-chain (NIM or ETH?), or off-chain?

We think it should be on-chain (for keeping a public record) and in NIM (because that’s what Nimiq stakeholders who are voting are holding).

Replying to the following question:

So far voting with balance and voting with account age have been proposed - with both having pros and cons. There’s also an option to have balance x age, which might be more fair to early OG holders vs newcomers, but is harder to balance.

Bringing age into play is tricky, especially as funds may have been moved which is a valid and normal thing to do. We have reviewed various angles and the safest, most straightforward is majority voting via balance. We saw @rraallvv ask a related question and @Bruno is working on an answer for that as well!

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The more the merrier :wink: We are considering a low min. staking amount to keep the barrier of entry low. That being said, you are going to be able to stake as much NIM as you want by using a staking pool or by doing solo staking. Solo staking might be more efficient but a staking pool might be optimal for non-techies who are not familiar with maintaining a server infrastructure and keeping it online at all times. Something cool about Nimiq staking pools is that we plan them to be non-custodial, so the pool only has control of the rewards and not of your funds.
Also, we plan to make it super easy to stake, directly from your wallet, so everybody will be able to participate!

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Hey @Rob, I’m going to answer the next two questions of you. :wink:

Is curve change planned together with the transition to albatross?

Yes, it is planned to come into effect with the change to Albatross. One reason for this is changing the supply curve requires a hard fork (as does the change to Albatross). Conducting a hard fork is a non-trivial task that requires a lot of preparation (contacting exchanges etc.). Thus, minimizing the number of hard forks is a sensible approach. Moreover, it simplifies the analysis of the new supply curve to the PoS setting and avoids any effects on PoW miners.

If the curve change is planned before 2.0 (which might be a good idea in terms of not changing too much of protocol at once) - have you considered the impact on the network security? Majority is looking forward to reduce the inflation, thous flatten the curve. This will lead to less mining rewards and potentially miners exiting.

As stated above, we won’t change the curve before 2.0, so this doesn’t apply.

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Have you considered a dynamic reward mechanism (supply) where majority stakers vote on the reward? (I’m against)

Yes, we did considered it. But in the end we thought that it is unnecessarily complex and outweighed by the advantages of having a predictable supply curve. For stakers to be able to plan their operations and for investors to be able to analyze the possible return of the coin, the knowledge of emission (“inflation”) not being an uncertainty is a big advantage.
And there is always the (drastic) option of doing a hard fork. As this blockchain-intrinsic measure is always an option, we will always keep open channels to discuss and decide together.

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Hi Rob,

The idea would be to have a specific block height where the voting ends and the balance of each voter is counted, that way moving funds couldn’t be used to manipulate the results.

Hopefully this addresses your concerns, but if not, let me know and I can go more in-depth about it.

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Thanks for the reply @jeff
@Bruno gave the reply I was looking for on Nimiq Supply Curve AMA

A Simple question that no one has asked (which is difficult to estimate though):
When do you plan to hold the voting?

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Hi,

Regarding the question If a part of the community will be strictly against a change, does the community have an option to veto the change for an additional round of re-evaluation?

The reason we have the first round of voting (in favor or against changing the supply curve) is to accommodate the case where the community feels that they are strictly against the possible options that would be presented in the second round of voting.

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Thank you @Big_Mac for this question:

Did the valuation expert provide a ‘preferred’ supply curve or did they only provide a range of curves to decide from?

In the process we realized that setting parameters is not something with a particular “optimum”. Too many unknowns play into the bigger picture and over-parametrization needs to be weighed against reducing complexity (see the blog that discusses this in some length). To some good degree the settings become arbitrary and depend on individual preferences, given someones expectations for the future. But we were able to at least close in on suggested “bounds” from which we can work forward. Identifying where the stakeholders majority sentiment is, supports the voting-from-choices process, so I believe we are on the right track with this overall conversation and making sure voting takes place.

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Hey,

Our plan is to keep the supply cap in place and leave it for a future decision. Given the ~100 years ahead, the decision should be deferred to the future when more relevant information is available.

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Thank you very much for answering, @Tammo
Can’t wait for the new wallet of #Nimiq :muscle:

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And here’s my answer related to the following answer:

In PoW the rewards are constants and the difficulty is adjusted using timestamps. In Albatross, the rewards will be adjusted for each epoch based on timestamps. So, different epochs might have different rewards, but rewards effectively remain time-unit based.

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Hi Rob! That’s indeed a very good question. As stated in the supply curve blog post - https://www.nimiq.com/blog/nimiq-20-supply-curve-considerations/, we “want to hear and discuss all your opinions throughout March and, based on that, share more information regarding the next steps”. We will stick to this plan and collect all feedback until end of March and then come up with a timeline-proposal for the voting within the next couple of weeks. After that, we want to kick-off the actual voting process as soon as possible (getting and auditing the voting tool will enter that equation).

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How does the team expect the reduced emission rate to affect liquidity?

Since we are also changing to PoS at the same time, we don’t expect the emission rate to affect the liquidity. It could affect liquidity in PoW (because miners would have less coins to sell) but in PoS there are no miners that need to constantly sell coins.
The stakers have a greater incentive to hold their coins which could decrease liquidity, but if that happens we can also expect it to affect the value of NIM (less selling supply -> more scarcity -> upwards trend at equal demand).

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